Volume 14 Number 3 (July to September 2003) - University of the ...

July - September 2003 National Administrative Register 1105 

AIR TRANSPORTATION OFFICE 

Date Filed: 11 July 2003 

Adopted: 24 June 2003 

Memorandum Circular No. 08-03 

Approval of Flight Plan To and From the Province of Palawan 

Text Available at Office of the National Administrative Register, 

U.P. Law Complex, Diliman, Quezon City 

Date Filed: 29 August 2003 

--o0o-- 

Administrative Order No. FSS-1.02, s. 2002 

Civil Air Regulations Governing Pilot Schools 

Pursuant to the pertinent provisions of R.A. No. 776, the following rules and regulations 

are hereby promulgated for the observance of all concerned. 

This Administrative Order shall be known as Civil Air Regulations Part I-B, governing 

Pilot Schools. 

CHAPTER I 

GENERAL PROVISIONS 

1.1 Applicability and Definition of Terms 

This CAR Part I-B applies to and prescribes the requirements for issuing airman agency 

certificates and associated ratings to pilot schools and the general operating rules for the 

holders of those certificates and ratings. This Part also provides for the approval of pilot 

training courses given by certificated pilot schools. 

a. AO - means this Administrative Order 1.02 entitled ìCivil Air Regulationî governing Pilot 

Schools. 

b. ATO -means Air Transportation Office 

c. Certificate - refers to the Air Agency Certificate (ACC) of a certified pilot school. 

d. Certificate of Holder - refers to an individual or company that has complied all the 

requirements of this AO thereby AAC has been issued under his/their name. 

1.2 Application: Issue and Renewal

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National Administrative Register Volume 14/3 

a) An application for an original certificate and rating, for an additional rating, or for the 

renewal of such a certificate, under this Part, is made on a form and in a manner prescribed 

by the Assistant Secretary. The applicant must file two copies of the proposed 

curriculum of the school with his application or certify that he will follow the curriculum in 

Appendix A, B, C, or D or in 2.4 or 2.5 of this Part and for application for renewal be shall 

submit any changes or addendum to his curriculum. 

b) An applicant who meets the requirements of this Part for one or more school ratings is 

entitled to an appropriate certificate and ratings. 

1.3 Duration of Certificates 

a) Unless sooner surrendered, suspended or revoked by the Assistant Secretary, an Air 

Agency Certificate and its rating is valid only for one (1) year from the date it was issued, 

or renewed or on the date of any change in the ownership of the school for which it was 

issued, whichever is earlier. 

b) The Certificate holder may surrender the Certificate any time to the Assistant Secretary if 

he opted to cease operating the pilot school. 

c) A change in the name of a pilot school, without a change in ownership, does not affect the 

effectivity of the certificate and rating. However, the owner of the school shall, within 15 

days after any change in its name notify the Assistant Secretary of the change. He may 

be issued certificate and is then entitled to a new certificate and rating with the new name 

for the unexpired period. 

1.4 Display of Certificates 

Certificate holder shall display the same in a conspicuous place within the school 

premise for the notice of all concerned. 

1.5 School Ratings 

The following ratings are issued under this Part: 

a) Private Pilot School (Ground and Flight Training) 

1) Airplanes; 

2) Rotorcraft, or 

3) Gliders, 

b) Commercial Pilot School 

1) Airplanes; 

2) Rotorcraft, or 

3) Gliders 

c) Instrument flying school 

d) Flight Instructor school


1.6 Quality of Instruction 

a) Each certificated pilot school shall provide instruction of such quality that - 

1. Graduates of each pilot school curriculum or approved pilot training course who apply 

for pilot license or pilot rating within 60 days after they are graduated, at least eight out of 

ten most recent graduates examined by the ATO qualify for the particular license or rating 

on their first test; and 

2. Spot evaluation checkrides will be conducted by the ATO on all pilot school students 

and (of the enrolled students) at least 8 out of 10 of the students who underwent spot/ 

progress checkrides must pass the test based on the lessons covered as shown in the 

school records. 

b) A pilot school shall not graduate a student unless he has completed all requirements of his 

course. A student with previous pilot experience and knowledge may be accredited, but 

not more than 50 percent of the curriculum requirements based upon an appropriate flight 

check or test by the school. 

Course credits may be transferred from one certificated school or another, however, it 

shall be the responsibility of the receiving school to determine the amount of credit to be 

transferred based on flight evaluation checkride, written examination or both of the student. 

In no case shall the transferred credit be more than what the student has been 

credited in the school he transferred from. 

c) It shall be the responsibility of the school concerned to notify the Assistant Secretary in 

writing within fifteen (15) days before the date of graduation, the name of the students it 

expects to graduate. 

d) All evaluations on the quality of instructions of pilot school whether in a flight, ground 

operations of aircraft or academic in nature shall be based on the approved curriculum 

standards in this Part. All evaluation checkrides will be in accordance with the applicable 

CAR. 

e) Certificate holderís quality of instructions shall be determined by the Airmen Examination 

Board of the Air Transportation Office. This will be the basis of the Assistant Secretary to 

close or suspend any school operating which cannot meet the required quality of instruction 

as mentioned in this section. 

1.7 Student Evaluation 

a) All certificated pilot schools shall give appropriate written evaluation in every subject to all 

students to complete that particular subject in the approved curriculum. 

b) Written evaluation must cover the necessary items in the curriculum so that the student 

will be able to pass the required ATO examination for the rating he seeks. 

1.8 Curriculum Changes

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a) A Certificate holder shall not change its approved curriculum unless that change is submitted 

in writing setting forth the parts that are to be changed and the proposed changes 

and approved by the Assistant Secretary. 

b) Unless the school is notified of the curriculum disapproval, within 45 days after submitting 

the proposed change, the same is considered approved. 

1.9 Graduation Certificates 

Each graduate of certified pilot school is entitled to a graduation certificate in a form 

prescribed by the school and approved by the Assistant Secretary. 

1.10 Authority to Conduct Pre-Solo Examination 

a) The Assistant Secretary or his authorized representative/s may authorize a certificated 

pilot school to conduct pre-solo examination. 

b) The flight instructor and ground instructor of a school that applies under this section must 

pass a standardization test given by the ATO before the school begins training. 

c) Schools which are authorized to give pre-solo examination shall send the studentís examination 

result to the ATO for reference in the issuance of appropriate pilot licenses. 

1.11 Records 

All certificated pilot schools shall keep a current, accurate individual record of each 

student. These records include the following: 

a) Chronological log of his instruction; 

b) Attendance; 

c) Subject covered; 

d) Examination; and 

e) Grades acquired 

1.12 Change of Location 

a) Certificate holder shall not change the schoolís location without the prior approval from 

the Assistant Secretary. 

b) The Assistant Secretary or his authorized representative shall conduct an inspection of 

the proposed location to determine whether the facilities are satisfactory and meet the 

certification requirement for a new location. 

1.13 Inspections 

a) The Assistant Secretary or his authorized representative shall inspect Certificate holder 

on its staffing, facilities and equipment, training syllabi and records to determine its compliance 

with this AO.


b) Spot inspection check shall be conducted at least once a year or during the validity of the 

certificate other than the renewal inspection. 

1.14 Maintenance of Personnel, Facilities, and Equipment 

All Certificate holders shall maintain personnel, facilities, and equipment at least equal in 

quality and quantity to the standards required in the issuance of the certificate and ratings 

obtained for pilot training. 

1.15 Advertising Limitations 

a) A Certificate holder shall not advertise or make any statement that is false or designed to 

mislead any person contemplating enrollment in the school. 

b) Any advertisement that is made by the school must clearly differentiate the courses that 

are approved by the Assistant Secretary and those that are not. 

2.1 Classroom Requirements 

CHAPTER 2 

GROUND COURSE REQUIREMENTS 

An applicant for a Private or Commercial pilot school rating must meet the following 

classroom facility requirements: 

a) At least 30 square meters of floor area, plus at least 5 square meters for each additional 

student over five; 

b) A maximum of 15 students per classroom; 

c) Ventilation in accordance with public health laws; and 

d) Enough light to allow a person with normal eyesight to study or read without eyestrain. 

2.2 Equipment Requirements 

An applicant for a Private Pilot or Commercial Pilot School rating must have at least the 

following classroom requirement: 

a) Private or Commercial Pilot School ground course: 

1) For each student, a desk-chair, chair and desk, or chair and table space (but not tablearm 

chairs) for work such as laying out course on aeronautical charts. 

2) A whiteboard with at least 12 square feet of usable surface. 

b) Private Pilot School ground course: 

1) Textbook and related materials on the regulations in this Part, meteorology, aerial 

navigation, radio (as used for airport traffic control, flight assistance services, general

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services and the operation of aircraft engine and the pertinent operational data on the 

private pilot level. 

2) Illustrative, explanatory, and demonstration aids and materials representative of those 

that a private pilot needs in actual piloting operations such as radio facility charts, aeronautical 

charts, computers, and the Airmanís Guide. 

c) Commercial Pilot School ground course: 

1) Textbooks, and related source materials covering the subject named in paragraph (b) 

of this section and navigation of aircraft by radio aids. 

2) Models, mockups, cutaways, and classroom-size or lecture-size blueprints and diagram 

covering the operation and function of instruments and equipment required related 

to the course being taught. 

2.3 Instructor Requirements 

a) An applicant for a Private or Commercial Pilot School rating must have: 

1) A principal instructor who is employed by the school on a full time basis to instruct/ 

supervise scheduled subjects. 

2) Instructors competent enough to teach subjects in the approved school curriculum. 

b) All instructors must have ground instructor licenses and appropriate ratings on all subject 

they teach. 

2.4 Curriculum Requirements - Private Pilot School Ground Course 

Private Pilot School rating applicant must adopt the following as minimum curriculum 

for classroom instruction: 

a) The regulations that are pertinent to student and pilot licenses. 

b) Meteorological subjects covering the following: 

1) Weather recognition 

2) Icing 

3) Fog 

4) Frontal characteristics, with emphasis on thunderstorms 

5) General cloud formations and their relationship to weather characteristics 

6) Weather maps and symbols 

7) Teletype sequence and symbols


8) Elementary weather forecasting 

9) Pressure areas and their characteristics including motion of air masses (wind system) 

10) Significance of isobaric patterns. 

11) Wind aloft 

12) Humidity-temperature-dewpoint relationship significance to the pilot 

13) Precipitation 

14) Practical application of meteorological knowledge to safe flying practices 

15) Services and assistance available from the Philippine Astronomical and Geophysical 

and Services Administration or through satellite weather information 

c) Radio navigation subjects covering but not limited to the following: 

1) Navigation methods including pilotage, dead reckoning, radio aids to navigation including 

elementary radio orientation. 

2) Navigation instruments commonly used. 

3) Basic use of computers. 

4) Proper use of flight plans. 

5) Proper use of published aids such as the Flight Information Manual, the Airmanís 

Guide, and Notams. 

6) Explanation of radio aids to flight. 

7) Proper use of radio, including voice procedure and phraseology. 

8) Flight assistance services. 

d) General Services and safety practices: 

1) Care of aircraft, including preflight inspection procedures, general safety precautions, 

and explanation of preventive maintenance, repair and required inspection. 

2) Care of engine, including preflight inspection procedures, fuel requirements, proper 

starting, warm-up and shutdown procedures; explanation of preventive maintenance, repair, 

required inspection, and use of operating manuals; and the functions, limitations, 

characteristics and errors of instruments required under the pertinent provisions of the 

CAR. 

3) Flight safety practices, including operation at high altitudes, extreme temperatures, 

gross weight, icing (wing ice, propeller ice and carburetor ice); adverse surface condi-

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tions (rough, soft, and slippery); air turbulence and surface obstruction and thermal effects); 

day and night minimum visibility; radio communications failure; low fuel supply; 

aerodynamic effect of front or ice on airfoils; maximum range versus maximum endurance 

operation; proper tie-down or securing of aircraft; emergency assistance and lost 

procedures; use of landing lights and flares; obstructions to flight, such as antennas, 

poles, and birds. 

e) At least 50 hours should be allocated for all the subjects mentioned and all students must 

pass the written examinations required in each subject. 

2.5 Curriculum Requirements - Commercial Pilot School ground course 

Commercial Pilot School rating applicant must adopt the following as minimum curriculum 

for classroom instructions: 

a) CAR instruction required in basic ground schools. 

b) Information needed by commercial pilots with unrestricted certificate. 

c) CAR and airports and air traffic control procedures. 

d) Instructions in meteorology as required in basic ground schools. 

e) Effects of weather on flight operations. 

f) Pilotage and dead reckoning techniques. 

g) Radio aids to navigation including familiarization with LMF and VOR/VHF techniques. 

h) Flight planning (CHF & IFR) uses and preparation. 

i) Instructions required in basic ground school regarding servicing and safety practices. 

And in addition the following will be included: 

1) Other servicing and safety practices theory of flight, lift-gravity-thrust-drag forces, 

characteristics of air as a fluid mass, and performance characteristics of aircraft including 

ground effects, design, gust load safety factors, and operating limitations; and 

2) Care and maintenance of equipment, including pressure, quantity, and rate instruments; 

radio and electronics equipment; flotation devices; fire extinguishers, safety belts, 

windshields, windows, and canopies, emergency exits, and parachutes. 

j) At least 150 hours should be allocated for all the subjects mentioned and all students must 

pass the written examination required in each subject. 

3.1 Aerodrome requirements 

CHAPTER 3 - FLIGHT TRAINING REQUIREMENTS 

a) An applicant for Private or Commercial Pilot School rating must operate in an aerodrome


with at least one runway or take-off area that allow its training aircraft to make a normal 

take-off at full gross weight. 

1) Under calm wind (not more than five miles per hour) conditions temperatures equal to 

the mean high temperature for the hottest month of the year in the operating area; 

2) Clearing all obstacles in the take-off flight path by at least 50 feet; 

3) With the powerplant in operation and landing gear and flap in operation, if applicable, 

and recommended by the manufacturer; and 

4) With smooth transition from lift-off to the best rate of climb speed without exceptional 

piloting skills or technique. 

5) With an Air Traffic Service facility and a Crash Fire Rescue capability. 

b) The standards listed in paragraph (a) of this section apply to outlying fields used for 

training in the principles and procedures for coping with critical situations. 

3.2 Office and Room Facilities Requirements 

a) An applicant for a Private or Commercial pilot school rating under this Part must have a 

permanent office, rest room and ready room facilities at the aerodrome or base of operations. 

b) Facilities provided under this section must conform to local building, fire, sanitation and 

health codes. 

c) Ready rooms provided under this section must have chairs, clothesracks, lockers, and 

bulletin boards. 

3.3 Flight Equipment Requirements 

a) An applicant for a Private or Commercial Pilot School rating under this Part must own at 

least one of the aircrafts being used for flight training. 

b) Each aircraft used for flight instruction of students enrolled in a Private or Commercial 

Pilot School must; 

1) Have an airworthiness certificate appropriate for the flight instruction given; 

2) Be maintained in accordance with the requirements of the Air Transportation Office; 

3) Have approach procedures; 

4) Be registered under the name of the school; 

5) Be operated only by the school under which it is registered.

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6) Have the school name and logo painted on the aircraft. 

7) Have the equipment and performance characteristics appropriate to its curriculum. 

8) If an aircraft is used for Instrument Flight Rules it must be properly rated for IFR 

operations by the Air Transportation Office. 

c) All applicants must have at least one airplane for every 10 students (or fraction thereof) 

enrolled in the flight course and enough airworthy airplanes available at the training location 

for the flight training periods. 

d) Each applicant for a Commercial Pilot School must have at least two types of airplanes 

that significantly differ in performance, flight characteristics and operating requirements. 

One of them at least must have a demonstrated cruising speed of not less than 120 miles 

per hour using METO power. Airplanes used in the radio navigation or instrument part of 

the curriculum must have the minimum instruments and radio equipment required by 

applicable regulations and gyroscopically operated pitch indicator. 

e) Each training aircraft must have in the aircraft: 

1. An appropriate pilotís training checklist containing essential data on pre-starting and 

starting procedures; warm-up procedures; shutdown procedures; emergency procedures 

on the ground and on flight; flight configurations and operational speeds for severe turbulence; 

and single -engine operation, if appropriate. 

f) A school applying for an instrument ratings shall have a simulator or a simulated flight 

training device available that is acceptable to the Assistant Secretary or his authorized 

representatives. The simulator must have a performance and characteristics similar to the 

flight training aircraft the school is operating. 

3.4 Maintenance Facility Requirements 

a) An applicant for a Private or Commercial Pilot School rating must provide facilities necessary 

to maintain, in a continuously airworthy condition, the minimum flight equipment 

required in this AO. It may provide the facilities by ownership, rental, lease, or other 

approved arrangements. 

b) In addition, such a school must have enough licensed mechanic readily available to 

maintain its aircraft used for flight instruction. 

3.5 Chief Flight Instructor Requirements 

a) Each flight course must be under the direct supervision of a chief flight instructor designated 

by the school. A person may serve as chief flight instructor for each course for 

which he is qualified. 

b) A chief flight instructor must: 

1) be at least 21 years of age;


2) have a good record as a pilot and flight instructor; and 

3) meet the applicable requirements under paragraphs (b) and (c), or (d) of this section. 

c) Chief flight instructor of a flight course for gliders is only required to have 40 percent of 

the hours in paragraphs (d) and (e) of this section 

d) For a primary Private Pilot School rating, a chief flight instructor must have: 

1) At least a current commercial pilot license and a current flight instructor license each 

with a rating for the category of aircraft used in the course; 

2) At least 1,000 hours as pilot in command; 

3) Primary flight instruction experience, acquired either as a licensed flight instructor or 

an instructor in a military pilot primary flight training program or a more advanced military 

flying training or a combination thereof, consisting of at least - 

i) two years and a total of 500 flight hours; or 

ii) 1,000 flight hours and 

4) Within the year preceding designation, at least 100 hours of primary flight instruction 

as a licensed flight instructor in the category of aircraft used in the course, or its equivalent 

as military pilot instructor. 

e) For a commercial flying school or a flight instructor flying school, a chief flight instructor 

must have: 


with a rating for the category of aircraft used in the course and, an instrument rating on 

his commercial pilot license; 

2) At least 2,000 hours as pilot-in-command; 

3) Flight instruction experience, acquired either as a licensed flight instructor or as instructor 

in a military pilot primary or basic flight training program or a combination thereof 

consisting of at least: 

i) Three years and a total of 1,000 flight hours; and 

ii) 1,500 flight hours; and 

4) Within the year preceding designation, at least - 

i) 100 hours of pilot instruction as a licensed flight instructor in the category of 

aircraft used in the course; 

ii) One year of active service as chief flight instructor of an approved primary 

flight course; or

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iii) One year of active service as a regular or designated ATO Check Pilot. 

f) For an instrument flying school, a chief flight instructor must have: 


with an instrument rating; 

2) At least 100 hours of flight time under actual or simulated instrument conditions; 

3) At least 1,000 hours as pilot-in-command; 

4) Instrument flight instructor experience, acquired either as a licensed flight instructor or 

an instructor flight training in a military pilot basic or instrument flight training program, or 

as an all-weather fighter pilot or a military pilot with experience in teaching instrument 

flying in PAF aircraft used for pilot training, or a combination thereof, consisting of at least 

- 

i) two years and a total of 250 flight hours; or 

ii) 400 flight hours. 

5) Within the year preceding designation, at least - 

i) 100 hours of instrument flight instruction as licensed instrument flight instructor; 

or 

ii) One year of active service as a regular or designated ATO instrument check 

examiner. 

g) The school shall notify the ATO in writing prior to any change in designating his chief flight 

instructor. 

3.6 Chief Flight Instructor Duties 

a) A chief flight instructor shall perform the following duties: 

1) Certify training reports, graduation certificates, and official recommendations of the 

school. 

2) Maintain adequate instructional standards. 

3) Assure effective scheduling of aircraft, instructors, and students. 

4) Assure the maintenance of student progress and accomplishment records. 

5) Conduct competency and standardization/evaluation of instructors. 

6) Assure the proper conduct of student proficiency checkrides.


7) Maintain liaison with the ATO in applying the techniques, procedures, and standards of 

the school. 

b) Each flying school shall assign these duties in writing and the chief flight instructor shall 

accept them in writing. 

3.7 Flight Instructor Requirements 

a) All flight instructors must have current flight instructor license with appropriate ratings. 

b) There should be one flight instructor for every five students. 

3.8 Curriculum Requirement: Private Pilot School Flight Training 

a) An applicant for a Private Pilot School rating must provide the following requirements: 

1) Flight time in airplane must be at least forty (40) hours based from an approved instruction. 

2) Student must be able to demonstrate their knowledge and proficiency on the prescribed 

training as listed in Appendix A. 

3) Flight time in rotorcraft must be at least forty (40) hours. Training will be in accordance 

with the current policies and training directives/manuals for rotorcraft pilots. 

4) Flight time in gliders must be at least twenty five (25) hours. Training will be in accordance 

with available training manuals for glider pilots. 

b) Student progress checkrides shall be given toward completion of the course hour requirements. 

3.9 Curriculum Requirements: Commercial Pilot School Flight Training 

a) An applicant for a commercial flying school rating must meet the following requirements: 

1) Flight time in airplane must be at least One hundred fifty (150) hours. However, One 

hundred (100) hours of the total time must be solo flight time and thirty (30) hours of which 

must be cross-country flight. 

2) Students must be able to demonstrate their knowledge and proficiency on the prescribed 

training as listed in Appendix B. 

3) Flight time in rotorcraft must be at least One hundred (100) hours. Training will be in 

accordance with current policies and training directives/manuals for rotorcraft pilots. 

4) Flight time in gliders must be at least twenty five (25) hours. Training will be in accordance 

with available training manuals for glider pilots. 

b) Student progress checkrides shall be given toward completion of the course hour requirements

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3.10 Curriculum Requirements: Instrument Flying School 

a) An applicant for an instrument flying school rating must provide the following requirements: 

1) At least thirty (30) hours of ground instructions on pertinent regulations, navigation, 

meteorology, radio orientation and procedures applicable to instrument flying. 

2) At least thirty (30) hours of instrument flying instruction, twenty (20) hours of which 

shall be in actual instrument flight under instrument flying conditions. 

3) Students must be able to demonstrate their knowledge and proficiency on the prescribed 

training as listed in Appendix C. 

b) Student progress checkrides shall be given toward completion of the course hour requirement. 

3.11 Curriculum Requirements: Flight Instructor School 

a) An applicant for a flight instructor school rating must provide the following requirements: 

1) At least forty (40) hours of theoretical instructions in the principles of learning and 

methods of teaching, and fundamentals of teaching flight instructions. 

2) At least twenty five (25) hours of practice teaching on flight with necessary demonstrations. 

3) Analysis of flight and techniques. 

b) All instructions must be in accordance with the prescribed instructorís training listed in 

Appendix D and students must be able to demonstrate their knowledge and proficiency. 

c) Students shall be given evaluation checkrides upon completion of the course. 

4.1 Courses Approved 

CHAPTER 4 - PILOT TRAINING COURSES 

In addition to the issuance of the school ratings listed in section 1.5, other pilots courses 

or Equipment Qualification Courses (EQC) providing instruction for the following purposes 

are approved under this Administrative Order. 

a) The addition of an aircraft rating on a pilot license. 

b) The addition of a rating on a flight instructor license. 

c) The proficiency required of an applicant for an airline transport pilot license. 

d) The proficiency required of an applicant for a rotorcraft external - load operator certificate 

or his designated chief supervisor.


4.2 Application 

a) The Assistant Secretary may, upon application of a Certificate holder, approve a pilot 

training course or EQC given under, and appropriate to, that school rating under this AO. 

b) All applications for approval of an EQC must be made in writing to the Assistant Secretary. 

c) All applications must show that the proposed course provides the instruction required in 

para. 4.3 and accompanied by two copies of the proposed course curriculum required by 

para. 4.4 hereof. 

4.3 Course Instruction 

The EQC must provide instruction to train students (holding at least a pilot certificate 

and at least a third-class medical certificate) as follows: 

a) For the addition of a rating in accordance with CAR Part I, EQC must provide adequate 

instruction for a graduate of the course to perform the required procedures and maneuvers 

for the appropriate evaluation under CAR Part I. 

b) For the addition of a rating on a flight instructorís license in accordance with the applicable 

CAR, the EQC must provide adequate instruction for a graduate of the course to 

pass the required evaluation under that part. 

c) For the proficiency required of applicants for airline transport pilot licenses, the course 

must provide adequate ground and flight instruction for a graduate of the course to pass 

the required evaluation under Appendix A of Part I. 

d) For the proficiency required of applicants for rotorcraft external-load operator certificates 

or their designated chief pilot, the course must provide adequate instruction for a graduate 

of the course to show the required knowledge and skill regarding rotorcraft externalload 

operations under the provisions of the pertinent regulations. 

e) For the proficiency required of applicants for agricultural aircraft operator certificates of 

their designated chief supervisors, the course must provide adequate instruction for a 

graduate of the course to show the required knowledge and skill regarding agricultural 

aircraft operations under the provisions of the pertinent regulations. 

4.4 Equipment Certificates and Notifications to the ATO 

a) Each course curriculum must include: 

1) The hours of ground and flight instructions and actual flights; 

2) The contents of each lesson, and the coverage of all progress checkrides; 

3) The facilities and equipment to be used, including aircraft rating or operating proficiency 

involved; and

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4) The qualifications of all flight and ground instructions given by them. 

b) Any change in an approved course curriculum must be approved by the Assistant Secretary 

prior to implementation. 

4.5 Enrollment Certificates and Notifications to the ATO 

The school shall issue: 

a) To each student upon enrollment a course approved under this Part a certificate showing 

the date of enrollment and the course entered, accompanied by a copy of the approved 

course curriculum; and 

b) To the ATO: 

1) A copy of total number of enrollees each year, a notice of graduation from, or 

of termination of training in, the course by each enrolled student, prior to renewal 

of his AAC. 

CHAPTER 5 - PENALTIES 

5.1 Any person who shall violate any provisions of this Administrative Order shall be dealt 

with in accordance with the provisions of Chapter VII, Republic Act No. 776. 

CHAPTER 6 - REPEALING PROVISION 

6.1 This Administrative Order repeals Administrative Order No. FSS-1.02, series of 1973. 

CHAPTER 7 - EFFECTIVITY 

7.1 This Administrative Order shall take effect at the beginning of the 15th day after completion 

of its publication in the Official Gazette. 

(SGD.) M/GEN. ADELBERTO F. YAP (RET.) 

Assistant Secretary 

Air Transportation Office 

(SGD.) HON. D/GEN. LEANDRO MENDOZA 

Secretary 

Department of Transportation and Communications 

FLIGHT TRAINING - PRIVATE PILOT SCHOOL 

APPENDIX A 

The training that must be included in the required hours of flight under Sec. 3.8 of this 

Administrative Order are as follows: 

A. PHASE I - BASIC FLYING


1) Airplane Equipment Familiarization 

a) Use of cockpit controls. 

b) Fuel system operation, octane required. 

c) Fire extinguisher, first aid kit, and other similar equipment. 

2) Preflight Preparatory Procedures 

a) Use of checklist. 

b) Safety principles for engine. 

c) Hand signals for ground operations. 

d) Equipment checks. 

e) Local taxiing and traffic rules. 

3) Taxing and Parking 

a) Principles of and safety practices in taxiing and parking, including engine 

operation and speed control under typical wind and surface conditions. 

b) Taxiing and parking operations, including airplane response to engine and 

flight controls under typical wind and surface conditions. 

c) (If seaplane training) Principles, procedures, and operations on water bodies 

(calm and choppy), involving taxiing, sailing, beaching, docking and mooring. 

4) Take-offs and Landings 

a) Principles and procedures for obtaining ground path control; take-off and climbouts at 

the best angle of climb speed, approaches at recommended speed, and flared landings, 

transition to touchdown without gear side loads. 

b) Operations on hard surfaced runways. 

c) Operations on sod surfaced areas. 

d) Operations at controlled airports. 

e) Operations at uncontrolled airports. 

f) Operations in heavy local traffic. 

g) Operations in crosswinds.

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h) Operations in gusty winds. 

i) Landings using power-on approaches, and slips. 

j) (If seaplane training) Principles, procedures, and operations involving takeoffs and 

landings. 

5) Straight and Level Fights 

a) Principles for altitude control in gusty air, momentary deviations, etc. 

b) Maintenance of airplane altitude by visual reference (wing tips to horizon, etc.) 

c) Maintenance of flight path over ground. 

6) Turns 

a) Flight control functions. 

b) Principles in overbanking tendencies. 

c) Principles for obtaining and maintaining a desired bank (ref. to wing tips), and a desired 

altitude (angle of attack), power, etc. 

d) Transition to and maintenance of desired banks and altitudes. 

7) Climbs and Glides 

a) Principles of attaining and maintaining a normal angle in climbs and descents. 

b) 10 0 - 30 0 banked turns. 

c) 30 0 - 60 0 banked turns. 

d) Spirals with bank at least 45 0 , through 720 0 - 1030 0 . 

8) Stalls 

a) Principles for detection of incipient stalls and effecting recovery to straight and level 

flight with minimum loss of altitude. 

b) Stalls and recoveries from take-off and departure configurations. 

c) Stalls and recoveries from approach and landing configurations. 

d) Stalls recoveries from accelerated maneuvering. 

e) Fully developed stalls and recoveries, including correct power usage to level flight. 

9) Flight At Minimum Controllable Airspeed (Slow Flight)


a) Principles for establishing and maintaining slow flight. 

b) Stabilized slow flight in turns at constant altitude 

c) Stabilized slow flight in turning climbs and descent. 

d) Effects of power usage during slow flight. 

10) Integrated Instrument Instruction 

Dual instruction in altitude control of airplanes solely by reference to instruments, integrated 

with the primary dual instruction prescribed in subdivisions 5, 6, 7, 8, and 9, of this 

subparagraph. 

B. PHASE II - NAVIGATION AND CRITICAL SITUATIONS 

1) Pattern and Track Flying 

a) Principles for establishing and maintaining a track over the ground. 

b) Constant radius turns about a point. 

c) ì8ísî around pylons. 

d) ìSî turns across a road. 

e) Making good a desired track for a prolonged period (traffic patterns, rectangular areas, 

etc.). 

2) Emergencies and Critical Situations 

a) Principles and safe flying practices involved, when encountering items below: 

1. Being lost. 

2. Low on fuel. 

3. Turbulent Air. 

4. Adverse flight visibility conditions. 

5. Radio station shutdown. 

6. Engine failures (partial or total). 

7. High altitude flying difficulties, high temperatures, downdrafts in mountainous 

terrain. 

8. Instrument/communication/navigational equipment failures.

1124 


9. Icing conditions (carburetor, wings, propeller). 

3) Short Field, Soft, and High Altitude/Temperature Field Operations 

a) Principles and safe flying practices for effecting takeoffs and landings, climbout and 

approach flight plans. 

b) Takeoffs and landings at short fields (including operations over obstacles). 

c) Takeoffs and landings under conditions of high operational altitudes. 

4) Cross-Country Flying (3 Hours Solo Minimum) 

a) Principles and safe flying practices, for preflight preparations, operations within airplaneís 

operational limitations, use ATO facilities, and compliance with this chapter. 

b) Loading of airplane. 

c) Weather information. 

d) Facilities to be used. 

e) Operations at strange aerodromes of varying size, altitudes, traffic conditions, and 

other similar conditions. 

5) Radio 

a) Airport traffic control procedures. 

b) Preparing, filling, and closing flight plans. 

c) Use of radio aids to navigation. 

B. MINIMUM TOTAL COURSE TIMES 

1) Flight time, 40 hours. 

2) Ground instruction time, 8 hours, 45 minutes. 

C. PROGRESS CHECKS 

1) Solo. 

2) Basic flying phase. 

3) Navigational and critical situations phase. 

4) Final (for graduation certificate).


FLIGHT TRAINING - COMMERCIAL PILOT SCHOOL 

APPENDIX B 

The training that must be included in the required hours of flight time under Sec. 3.9 

this Administrative Order are as follows: 

A. PHASE I - BASIC FLYING 

1) Aircraft equipment familiarization and procedures for control and use. 

a) Principles and procedures for control and use of flight force(s) effect on wing tail 

surface, flight controls and for control and use of power effect through mixture, carburetor 

heat and other similar conditions. 

b) Use of cockpit controls. 

c) Fuel system operation, octane required. 

d) Fire extinguisher, first aid and other similar equipment. 

2) Preparatory preflight procedures 

a) Principles involved in each preparatory procedure. 

b) Use of checklist. 

c) Safety principles for engine. 

d) Hand signals for ground operations. 

e) Equipment check. 

f) Local taxiing and traffic rules. 

3) Taxing and Parking 

a) Principles and safety practices in taxiing and parking, including engine operation and 

speed control under typical wind and surface conditions. 

b) Taxiing and parking operations, including airplane response to engine and flight controls 

under typical wind and surface conditions. 

c) (If seaplane training) Principles, procedures, and operations on water bodies (calm 

and choppy), involving taxiing, sailing, beaching, docking and mooring. 

d) (If seaplane training) Principles, procedures, and operations on water subject to tidal 

or current action involving sailing and beaching, docking, and mooring.

1126 


4) Takeoffs and Landing 

a) Principles and procedures for obtaining ground path control; takeoff and climbouts at 

the best angle of climb speed, and flared landings, transition to touchdown without gear 

side loads. 

b) Operations on hard surfaced runways. 

c) Operations on soft surfaced areas. 

d) Operations at controlled aerodromes. 

e) Operations at uncontrolled aerodromes. 

f) Operations in heavy local traffic. 

g) Operations in crosswind. 

h) Operations in gusty winds. 

i) Landings using power-on approaches and ships. 

j) (If seaplane training) Principles and procedures and operations involving takeoffs and 

landings. 

k) (If seaplane training) Operations from water affected by the tide and current. 

5) Straight and Level Flight 

a) Principles for altitudes control in gusty air, momentary deviations, and other similar 

conditions. 

b) Maintenance of airplane altitude by visual reference (wing tip to horizon, and other 

similar conditions). 

c) Maintenance of flight path over ground. 

6) Turns 

a) Principles of and familiarization with aerodynamic forces involved and available for 

turning purposes under full load and varying power conditions. 

b) Flight control functions. 

c) Principles in overbanking tendencies. 

d) Principles for establishing and maintaining a desired bank (ref. to wing tips), and a 

desired altitude (angle of attack, power, and other similar conditions). 

e) Transition and maintenance of desired banks and altitudes.


7) Climb and Gliders 

a) Principles of establishing and maintaining a normal angle in climbs and descents. 

b) 10 0 - 30 0 banked turns. 

c) 30 0 - 60 0 banked turns 

d) Spirals with bank at least 45 0 through 720 0 - 1080 0 . 

e) Use of power and speed control to maintain pre-assigned rates of descent and ascent. 

8) Stalls 

a) Principles for detection of incipient stalls and affecting recovery to straight and level 

flight with minimum loss of altitude. 

b) Stalls and recoveries from takeoff and departure configurations. 

c) Stalls and recoveries from approach and landing configurations. 

d) Stalls and recoveries from accelerated maneuvering. 

e) Fully developed stalls and recoveries, including correct power usage, to level flight. 

9) Flight at Minimum Controllable Airspeed (Slow Flight) 

a) Principles for establishing and maintaining slow flight. 

b) Stabilized slow flight in turns as constant altitude. 

c) Stabilized slow flight in turning climbs and descent. 

d) Effects of power usage during slow flight. 

B. PHASE II - NAVIGATIONAL AND CRITICAL SITUATIONS 

1) Pattern and Track Flying 

a) Principles for establishing and maintaining a track over the ground. 

b) Constant radius turns about a point. 

c) ì8ísî around pylons. 

d) ìSî turns across a road. 

e) Making good a desired track for a prolonged period (traffic patterns, rectangular 

areas, and other similar conditions).

1128 


2) Emergencies and Critical Situations 

a) Principles and safe flying practices involved when encountering items below: 

1) Being lost. 

2) Low on fuel. 

3) Turbulent air. 

4) Adverse flight visibility conditions. 

5) Radio station shutdown. 

6) Motor trouble. 

7) Loss of performance due to high altitudes, high temperatures, downdrafts in 

mountainous terrain. 

8) Instrument/communication/navigational equipment trouble. 

9) Icing conditions (carburetor, wings, propeller). 

b) Principles and procedures for determining and executing a course of action for forced 

landings that, if carried through, would most likely result in a safe landing with minimum (if 

any) damage to the airplane or injury to occupants. 

3) Short, Soft, and High Altitude/Temperature Field Operations 

a) Principles and safe flying practices for effecting takeoffs and landings, climbouts and 

approach flight plans. 

b) Takeoffs and landings at small fields (including operation over obstacles) 

c) Takeoffs and landings on soft surfaces. 

d) Takeoffs and landings under conditions of high density/operational altitudes. 

4) Cross-Country Flying and Radio Navigation (20 hours) 

a) Loading of airplane. 

b) Weather information. 

c) Facilities to be used. 

d) Operations at strange airports of varying size, altitudes, traffic conditions, 350 miles 

distant, and other similar conditions.


e) Operations at airports in which flight plans are filed, followed, and closed, one or more 

radio aids to navigation are used; and dead reckoning navigation employed. Procedures 

for operation in Air Defense Identification Zones or when intercepted by military aircraft. 

5) Basic Instrument Flying (Minimum 10 hours, 5 hours Instrument Instruction) 

a) The specified 10 hours of instrument training shall be given in an airplane in flight. 

b) At least five hours shall be given by a rated instrument flight instructor; the remaining 

five hours may be given by the holder of a flight instructor certificate with an airplane 

rating. 

c) Principles and procedures for maintaining and controlling airplane flight altitudes and 

speeds (solely by reference to instruments), and maintaining flight within the airplaneís 

operational limitations. 

d) Operations using a gyroscopically operated bank and direction indicator, a gyroscopically 

operated pitch indicator, a sensitive altimeter, and a sweep second clock. 

e) Principles and procedures for coping with turbulent air conditions, including recommended 

airspeed, airplane configuration and power settings. 

f) Operations (solely by reference to instruments) in turbulent air. 

6) Night Flying (Minimum 5 hours, 10 takeoffs and landings) 

a) Principles and procedures for conduct of night flights from takeoff to destination and 

landings, including procedures from coping with critical and emergency situations. 

b) Operations at night (during the period from one hour after sunset to one hour before 

sunrise) must include at least 10 takeoffs and landings to complete stops with student as 

pilot in command and sole manipulator of the controls. 

7. Transition to and Operation of Representative Current Type Transportation Airplane (5) 

Hours Solo Minimum 

a) Principles and procedures to be followed in making a transition from a familiar type 

airplane to one with significantly different flight performance and operating characteristics. 

Includes determination of the correct fuel consumption and use of fuel system tanks, 

selector(s) and indicator(s), use of flaps for take off and landing under various configurations 

and conditions of loading, loading to be within c.g. limits, operational recommended 

speeds and limitations for the engine and airplane, procedures for use of communication 

equipment, and procedures to be used under the emergency situations and for normal 

gear extension (if applicable). 

b) Operation of different type transportational airplanes at gross weight, which will include 

preflight procedures, takeoffs and departures, inflight maneuvers at minimum controllable 

airspeed, the design maximum structural cruising speed, best angle and rate of climb 

airspeed(s) and configuration(s); approaches and landing using recommended approach 

speed and configuration and post-flight procedures.

1130 


C. MINIMUM TOTAL COURSE HOURS 

1) Flight time one hundred fifty (150) hours. 

a) Solo flight, 100 hours. 

b) Cross-country solo, 30 hours 

2) Ground instruction, 40 hours 

D. PROGRESS CHECKRIDES 

1) Solo 

2) Basic flying phase 

3) Navigation and critical situation phase: 

a) VFR operations 

b) Basic instrument flying 

c) Night flying 

4) Final (for graduation certificate). 

APPENDIX C 

FLIGHT TRAINING - INSTRUMENT FLYING SCHOOL 

The training that must be included in the required hours of instruction under Sec. 3.10 

of this Administrative Order are as follows. 

A. PHASE I - BASIC INSTRUMENT FLYING 

1) Straight and level flight 

a) Principles, procedures, operating limitations for all flight instruments for control of altitude, 

direction, speed and altitude. 

b) Smooth air operation at cruising speed. 

c) Turbulent air operation at recommended rough air speed. 

2) Turns 

a) Principles, procedures, and operating limitations for control of rate of turn to predetermined 

headings (including timed turns).


b) Smooth air operation at cruising speed. 

c) Turbulent air operation at recommended rough air speed. 

3) Climbs, descents and spirals. 

a) Principles, procedures, and operating limitations for control of rate of climb and descent 

to predetermined altitudes. 

b) Smooth air operation at recommended best rate of climb and glide speeds and airplane 

configurations. 

c) Same as b) of this subdivision, but in rough air. 

4) Stalls 

a) Principles and procedures for detection of and recovery from partial and full stalls. 

b) Stall detection and recoveries. 

c) Full stall recoveries. 

5) Recovery from unusual altitudes 

a) Principles and procedures for coping with unusual altitudes and for critical engine 

inoperative situations on multi-engine airplanes which include effecting recoveries within 

operating and structural limitations. 

b) Recoveries to level flight altitudes and speeds. 

c) Operating with critical engine inoperative (multi-engine airplanes only). 

B. PHASE II - IFR COMMUNICATION, NAVIGATION AND APPROACHES 

1) Estimation of arrival times 

a) Principles and procedures for preparing a complete flight plan and the correct computation 

of estimated arrival times over check points, at destination, and at an alternate 

airport 

b) Flight planning. (Weather data, navigational procedures, airplane performance data, 

flight charts, approach procedures, and other similar data). 

c) Flight from point to point. 

2) Turning Radio Equipment 

a) Principles and procedures for selection of frequencies, use of volume control, use of 

voice and range filters, use of dual equipment - when installed.

1132 


b) Use of equipment in flight. 

3) Orientation 

a) Principles and procedures for orientating on a range leg, or radial, and identification of 

position. 

b) Range orientation and identification from an unknown position. 

4) Following a range leg or radial 

a) Principles and procedures for aligning with and maintaining flight path and altitude 

along range leg or radial. 

b) Range leg or radial alignment and following. 

5) Locating range stations 

a) Principles and procedures for locating and identifying arrival over station. 

b) Location and identification of station 

6) Instrument approach procedures 

a) Principles and procedures for execution of the correct approach procedure for the 

station and aerodrome involved. (Includes familiarization with radio facility charts, radio 

range charts, and terminal charts). 

b) Execution of approaches to standard munimums for aerodrome involved. (Also to 500 

feet and one mile at some other airport if local aerodrome has higher minimums). 

7) Missed approach procedures 

a) Principles and procedures for execution of the correct approach procedures. 

b) Execution of missed approach procedures for aerodrome involved. 

8) Air Traffic Control Procedures 

a) Familiarization with and procedures for compliance with ATC clearance and/or instructions, 

including holding and emergency procedures. 

b) Receipt and execution of ATC clearance and/or instruction. 

C. MINIMUM TOTAL COURSE HOURS 

1) Ground instruction, 30 hours. 

2) Flying time (20 hours in actual instrument flight in IFR conditions), 30 hours.


D. PROGRESS CHECKS 

1) Phase I - Basic instrument flying. 

2) Phase II - IFR communications, navigation, and approaches. 

3) Final for Graduation Certificate. 

FLIGHT TRAINING - FLIGHT INSTRUCTOR SCHOOL 

APPENDIX D 

The training that must be included in the required hours of instruction under Sec. 3.11 

of this Administrative Order are as follows: 

A. FLIGHT PORTION, 25 HOURS OF FLYING 

1) Phase I - Performance skills 

All items and maneuvers listed in Part I for private, commercial, and flight instructor, 

flight test; all items and maneuvers listed in Appendix A and B to this Part; lazy ì8ísî and 

pylons. 

2) Phase II - Instructional skills 

Development of methods, skills, and techniques of imparting knowledge, skills, etc., to 

students in all of the items and maneuvers of Phase I. 

B. GROUND INSTRUCTION PORTION, 40 HOURS 

1) Fundamentals of flight instruction 

a) Basic learning characteristics. 

b) Determination of objectives, or aims. 

c) Instructional management (preparation and execution). 

d) Teaching methods and techniques. 

e) Evaluation techniques. 

2) Analysis of flight maneuvers and flight techniques 

a) Theory of flight. 

b) Control functions and effects. 

c) Common student error - causes and remedies.

1134 


d) Common flight instructor deficiencies - cause and remedies. 

e) Principles of safety. 

BANGKO SENTRAL NG PILIPINAS 


Circular No. 389 

Loans and Accommodations 

Pursuant to the Monetary Board Resolution No. 811 dated June 12, 2003, the following 

rules and regulations are hereby issued to implement Sections 40 and 41 of Republic Act 

No. 8791, the General Banking Law of 2000. 

The provisions of Section X319 of the Manual of Regulations for Banks and its Subsections 

are hereby amended, to read as follows: 

SECTION X319. REQUIREMENT FOR GRANT OF LOANS AND OTHER CREDIT AC- 

COMMODATIONS. 

The following regulations shall govern loans and other credit accommodations, except 

those granted to microfinance and small and medium enterprises. 

SUBSEC. X319.1. GENERAL GUIDELINES 

Before granting a loan or other credit accommodation, a bank must ascertain that the 

borrowers, co-makers, endorsers, sureties and/or guarantors are financially capable of 

fulfilling their commitments to the bank. For this purpose, banks shall obtain adequate information 

on their credit standings and financial capacities. 

SUBSEC. X319.2. PROOF OF FINANCIAL CAPACITY OF BORROWER. 

In addition to the usual information sheet about the borrower, banks may require submission 

of a statement of the borrowerís assets and liabilities. Banks shall, however, require 

the following: 

1. A copy of the latest Income Tax Return of the borrower and his co-borrower, if 

applicable, duly stamped as received by the Bureau of Internal Revenue (BIR); and 

2. Except as otherwise provided in other regulations, if the borrower is engaged in 

business, a copy of the borrowerís latest Financial Statements as submitted for taxation 

purposes to the BIR.


Should the document(s) submitted prove to be spurious or incorrect in any material 

detail, the bank may terminate any loan or other credit accommodation granted on the basis 

of said document(s) and shall have the right to demand immediate repayment or liquidation 

of the obligation. Moreover, the bank may seek redress from the court for any harm done by 

the borrowerís submission of spurious documents. 

SUBSEC. X319.3. SIGNATORIES 

Banks shall require that loans and other credit accommodations be made under the 

signature of the principal borrower and in the case of unsecured loans and other credit 

accommodations to an individual borrower, at least one co-maker, except when the principal 

borrower has the financial capacity and a good track record of paying his obligations. 

SUBSEC. X319.4 SANCTIONS. 

Any violation of the provisions of this Section shall be subject to the sanctions provided 

under Sections 36 and 37 of R.A. No. 7653 (The New Central Bank Act). 

This Circular shall take effect fifteen (15) days after publication in the Official Gazette 

or in a national newspaper of general circulation. 



(SGD.) RAFAEL B. BUENAVENTURA 

Governor 

--o0o-- 

Circular Letter 

Sale of Foreign Exchange (FX) for OA Importations 

by Banks Other than the Registering Bank 

A bank selling FX to an importer for payment of an Open Account (OA) importation, 

may remit said FX directly to the foreign supplier, even if such FX selling bank is not the bank 

that applied for the BSP registration of the OA importation (the registering bank), subject to 

the following conditions: 

a. Submission of the required documents under Item II.a of Circular-Letter dated January 

24, 2002 and copy of the BSP registration letter for the OA importation certified as true copy 

by the registering bankís authorized officer with a rank of at least Assistant Vice President; 

b. Submission of certification from the registering bank that no foreign exchange sale has 

been made on the subject OA importation duly signed by the registering bankís authorized 

officer with a rank of at least Assistant Vice President; 

c. The FX selling and remitting bank shall stamp ìFX SOLDî on the original shipping documents 

at hand and indicate thereon the amount of FX sold. The stamped information shall be

1136 


duly signed by the FX selling and remitting bankís authorized signatory with a rank of at least 

Assistant Vice President; and 

d. The FX selling and remitting bank shall, within 24 hours from sale of FX, transmit to the 

registering bank a copy of the shipping documents stamped ìFX SOLDî under a covering 

letter advising of such sale and simultaneous outward remittance to foreign supplier. 

This amends Items II.b.2 and II.d of BSP Circular-Letter dated January 24, 2002 and 

other provisions of BSP issuances inconsistent herewith. 

This Circular-Letter shall take effect immediately. 






Governor 

--o0o-- 


Outsourcing of Certain Front/Back Office 

Functions by Parent to a Subsidiary 



--o0o-- 


Renumbering/Amendments of Certain Provisions of the 

Manual of Regulations for Banks and Non-bank Financial Institutions 

Pursuant to Monetary Board Resolution No. 769 dated June 5, 2003, Subsecs. X141- 

1, X141.4, X143.3, X143.4, X143.5, X143.6 of the Manual of Regulations for Banks and 

Subsecs. 4141Q.1, 4141Q.4, 4141Q.3, 4143Q.4, 4143Q.5, and 4143Q.6 of the Manual of 

Regulations for Non-bank Financial Institutions are hereby renumbered and/or amended as 

follows: 

SECTION 1. Subsec. X141.1 and Subsecs. 4141Q.1 Limits on the Number of Members 

of the Board of Directors are hereby amended further to read as follows:


Pursuant to Sections 15 and 17 of the General Banking Law of 2000 (R.A. No. 

8791), there shall be at least five (5), and a maximum of fifteen (15) members of 

the board of directors of a bank/quasi-bank/trust entity two (2) of whom shall be 

independent directors: Provided, that in case of a bank/quasi-bank/trust entity 

merger or consolidation, the number of directors may be increased up to twentyone 

(21). 

An independent director shall mean a person who -- 

1. Is not or has not been an officer or employee of the bank/quasi-bank/trust 

entity, its subsidiaries or affiliates or related interests during the past three (3) 

years counted from the date of his election; 

2. Is not a director or officer of the related companies of the Institutionís majority 

stockholder; 

3. Is not a majority stockholder of the institution, any of its related companies, or 

its majority shareholders; 

4. Is not a relative within the fourth degree of consanguinity or affinity, legitimate 

or common-law of any director, officer or majority shareholder of the bank/quasibank/trust 

entity or any of its related companies; 

5. Is not acting as a nominee or representative of any director or substantial 

sharesholder of the bank/quasi-bank/trust entity, any of its related companies or 

any of its substantial shareholders; and 

6. Is not retained as professional adviser, consultant, agent or counsel of the 

institution, any of its related companies or any of its substantial shareholders, 

either in his personal capacity or through his firm; is independent of management 

and free from any business or other relationship, has not engaged and does not 

engage in any transaction with the institution or with any of its related companies 

or with any of its substantial shareholders, whether by himself or with other persons 

or through a firm of which he is a partner or a company of which he is a 

director or substantial shareholder, other than transactions which are conducted 

at arms length and could not materially interfere or influence the exercise of his 

judgment. 

The foregoing terms and phrases used in Items 1 to 6 of Section 1 shall have the 

following meaning: 

1. Parent is a corporation who has control over another corporation directly or indirectly 

through one or more intermediaries. 

2. Subsidiary means a corporation more than fifty percent (50%) of the voting stock of 

which is owned or controlled directly or indirectly through one or more intermediaries by a 

bank/quasi-bank/trust entity. 

3. Affiliate is a juridical person that directly or indirectly, through one or more intermediaries, 

is controlled by, or is under common control with the bank/quasi-bank/trust entity or 

its affiliates.

1138 


4. Related Interests as defined under Sections 12 and 13 of R.A. No. 8791 (GBL 

2000) shall mean individuals related to each other within the fourth degree of consanguinity 

or affinity, legitimate or common law, and two or more corporations owned or controlled by a 

single individual or by the same family group or the same group of persons. 

5. Control exists when the parent owns directly or indirectly through subsidiaries more 

than one half of the voting power of an enterprise unless, in exceptional circumstances, it 

can be clearly demonstrated that such ownership does not constitute control. Control may 

also exist even when ownership is one half or less of the voting power of an enterprise when 

there is: 

a. power over more than one half of the voting rights by virtue of an agreement with other 

stockholders; or 

b. power to govern the financial and operating policies of the enterprise under a statute or an 

agreement; or 

c. power to appoint or remove the majority of the members of the board of directors or 

equivalent governing body; or 

d. power to cast the majority votes at meetings of the board of directors or equivalent governing 

body; or 

e. any other arrangement similar to any of the above. 

6. Related Company means another company which is (a) its parent or holding company; 

b) its subsidiary or affiliate; or (c) a corporation where a bank/quasi-bank/trust entity 

or its majority stockholder own such number of shares that will allow/enable him to elect at 

least one (1) member of the board of directors or a partnership where such majority stockholder 

is a partner. 

7. Substantial or major shareholder shall mean a person, whether natural or juridical, 

owning such number of shares that will allow him to elect at least one (1) member of the 

board of directors of a bank/quasi-bank/trust entity or who is directly or indirectly the registered 

or beneficial owner of more than ten percent (10%) of any class of its equity security. 

8. Majority stockholder or Majority shareholder means a person, whether natural 

or juridical, owning more than fifty percent (50%) of the voting stock of a bank/quasi-bank/ 

trust entity. 

Non-Filipino citizens may become members of the board of directors of a bank/quasibank/trust 

entity to the extent of the foreign participation in the equity of said bank/quasibank/trust 

entity: Provided, That pursuant to Section 23 of the Corporation Code of the 

Philippines (BP Blg. 68), a majority of the directors must be residents of the Philippines. 

The meetings of the board of directors may be conducted through modern technologies 

such as, but not limited to teleconferencing and video-conferencing as long as the 

director who is taking part in said meetings can actively participate in the deliberations on 

matters taken up therein: Provided, That every member of the board shall participate in at


least fifty percent (50%) and shall physically attend at least twenty-five percent (25%) of all 

board meetings every year. 

SECTION 2. Subsecs. X143.3 and 4143Q.3 Disqualification procedures are hereby 

renumbered as Subsecs. X143.4 and 4143Q.4 and amended to read as follows: 

1. Upon establishment of any of the grounds for disqualification mentioned in Subsecs. 

X143.1/4143Q.1 and X143.2/4143Q.2, the office of the disqualified director or officer shall 

immediately become vacant, except in the case of delinquency in the payment of obligations 

wherein the director or officer concerned shall be given a grace period of thirty (30) days 

after such ground for disqualification has been established. 

2. All cases of disqualification shall be immediately reported to the Board of Directors of the 

institution concerned. If the ground for disqualification is delinquency in the payment of 

obligations, the report shall be made at the expiry of the thirty-day grace period mentioned in 

item ì1î above. 

The board of directors shall act on the report not later than the following board meeting. 

Within seventy-two (72) hours thereafter, the corporate secretary shall report to the Governor 

of the BSP through the appropriate supervising and examining department the name of 

the director or officer involved, the ground for his disqualification and the action taken by the 

board. 

3. All cases of disqualification shall be elevated to the Monetary Board for approval. Upon 

approval by the Monetary Board, the concerned director/officer or employee shall be informed 

by the appropriate SES department through registered mail with registry return receipt 

card, at his/her last known address of his/her disqualification from being elected/ 

appointed as director/officer in any financial institution under the supervision of the Bangko 

Sentral ng Pilipinas and of his inclusion in the master list of watchlisted persons so disqualified. 

4. The director/officer concerned shall, however, be afforded an opportunity to defend/clear 

himself in a hearing before the Monetary Board or any committee created for the purpose 

chaired by any Monetary Board member of those directors/officers who are subject to 

confirmation by the Monetary Board or a Committee chaired by any member of the SES 

Committee mentioned in Subsecs. X141.4 and 4141Q.4 hereof for those directors/officers 

who are not subject to confirmation by the Monetary Board, upon his/her request. In such 

hearing, the concerned director/officer shall be allowed to present evidence/witnesses in 

his/her favor. 

5. If the director/officer were cleared in such hearing or when the ground for disqualification 

ceases to exist, he/she would be eligible to become director or officer of any bank, quasibank 

or trust entity upon prior approval by the Monetary Board. It shall be the responsibility 

of the concerned supervising and examining department of the BSP to elevate to the Monetary 

Board the lifting of the disqualifcation of the concerned director/officer and his/her 

delisting from the master list of watchlisted persons. 

SECTION 3. Subsecs. X143.4 and 4143Q.4 Effect of non-possession of qualification 

or possession of disqualifications are hereby renumbered as Subsecs. X143.3 and 

4143Q.3 and amended to read as follows:

1140 


Directors/officers elected or appointed without possessing the qualifications mentioned 

under Subsecs. X141.2 and X142.2 of the Manual of Regulations for Banks 

and Subsec. 4141Q.2 and the last paragraph of Sec. 4142Q of the Manual of 

Regulations for Non-Bank Financial Insitutions shall not be confirmed by the 

confirming authority provided under Subsecs. X141.4 and 4141Q.4 and may be 

removed from office even if he/she has assumed the position to which he/she 

was elected or appointed. Directors/officers possessing any of the disqualifications 

as enumerated herein shall be subject to the disqualification procedures 

provided under Subsecs. X143.4 and 4143Q.4 hereof. 

SECTION 4. Subsecs. X143.5 and 4143Q.5 Confirmation of the election/appointments 

of directors and officers are hereby renumbered as Subsecs. X141.4 and 4141Q.4 

and amended to read as follows: 

The election/appointment of directors and officers of banks/quasi-banks shall be subject 

to confirmation by the: 

Confirming Authority Position Level 

a. Monetary Board Directors, Senior Vice President and above of universal 

banks and commercial banks, as well as Directors, President, 

Chief Executive Officer, Chief Operating Officer or 

equivalent rank of thrift banks, Islamic banks, rural banks, 

cooperative banks, quasi-banks and trust entities with total 

assets of at least P1 billion. 

b. A Committee to be Directors, Senior Vice President and above or equivalent 

composed of: rank of thrift banks, Islamic banks, rural banks, cooperative 

banks, quasi-banks and trust entities whose election/ 

- The Deputy Governor appointment is not subject to confirmation by the Monetary 

SES Board. 

- Managing Directors of 

SE I and II 

-Directors of the concerned 

supervising and examining 

department of SES 

The election/appointment of all incumbent directors and officers of all types of banks 

and quasi-banks as of September 17, 2001 not previously approved/confirmed by the Monetary 

Board shall be submitted to the BSP through the appropriate supervising and examining 

departments for confirmation. 

SECTION 5. Subsecs. X143.6 and 4143Q.6 Watchlisting are hereby renumbered as 

Subsecs. X143.5 and 4143Q.5. 

SECTION 6. Subsec. 4143Q.7 of the Manual of Regulations for Non-Bank Financial 

Institutions is hereby renumbered as Subsec. 4143Q.6. 

This Circular shall take effect after fifteen (15) days following its publication either in 

the Official Gazette or in a newspaper of general circulation.

July - September 2003 National Administrative Register 1141 

Adopted: 15 July 2003 



Governor 

--o0o-- 


Monthly Report of Purchases/Sales and Daily 

Position of Foreign Exchange of Forex Corporation 

This is a re-issuance of Circular Letter dated March 8, 2000. 

Pursuant to Section 80 of Republic Act No. 7653 (The New Central Bank Act) and 

Monetary Board Resolution No. 1379 dated October 1, 1999, all forex corporations/corporations 

engaged in foreign exchange trading activities that are not subsidiaries/affiliates of 

banks, quasi-banks and/or non-bank financial intermediaries shall submit a monthly report of 

their purchases/sales and daily position of foreign exchange to the Supervision and Examination 

Department II of the Bangko Sentral ng Pilipinas in the prescribed form hereto attached. 

The Chief Executive Officer (CEO) or President of the Corporation shall certify under 

oath the accuracy of the data contained in the report. 

The report submitted may be subject to inspection, as may be appropriate by authorized 

representatives of the Bangko Sentral ng Pilipinas to verify the accuracy of the reported 

data/information. Accordingly, forex corporations shall make available their books of 

accounts/records and related documents for inspection and cooperate with the inspectors 

as necessary to facilitate the verification of their reports. 

Non-compliance hereof or any false reporting or misrepresentation of reported data/ 

information shall be subject to the penal provision under Section 36 of Republic Act No. 7653 

(The New Central Bank Act). 

This Circular-Letter supersedes BSP Circular-Letter dated October 27, 2000 and shall 

take effect immediately. 




Governor 

--o0o--




Delivery of Securities 

Pursuant to Monetary Board Resolution No. 931 dated July 2, 2003, the provisions of 

the Manual of Regulations for Banks (MORB) are hereby amended as follows: 

SECTION 1. Subsection X235.5 of the MORB is hereby amended to read as follows: 

X235.5 Delivery of securities - Securities, warehouse receipts, quedans and 

other documents of title which are the subject of quasi-banking functions, such 

as repurchase agreements, shall be physically delivered, if certificated, to a BSP 

accredited custodian that is mutually acceptable to the lender/purchaser and 

borrower/seller, or by means of book-entry transfer to the appropriate securities 

account of the BSP accredited custodian in a registry for said securities, if 

immobilized or dematerialized while the overlying principal borrowing instrument 

shall be physically delivered to the lender/purchaser. The custodian shall hold the 

securities in the name of the borrower/seller, but shall keep said securities segregated 

from the regular securities account of the borrower/seller if the borrower/ 

seller has an existing securities account with the custodian: Provided, that a 

bank/other entity authorized by the BSP to perform custodianship function may 

not be allowed to be custodian of securities issued or owned by said bank/entity, 

its subsidiaries or affiliates, or of securities in bearer form. 

The delivery shall be effected upon payment and shall be evidenced by a 

securities delivery receipt duly signed by authorized officers of the custodian and 

delivered to both the lender/purchaser and seller/borrower. 

SECTION 2. The provisions of Subsection X238.1 are hereby transferred to Subsection 

X238.2 and new provisions are hereby provided under Subsection X238.1 of the MORB 

to read as follows: 

X238.1 Delivery of Securities - Securities sold on a without recourse basis 

allowed under Section X238 shall be delivered physically to the purchaser, or to 

his designated custodian duly accredited by the BSP, if certificated, or by means 

of book-entry transfer to the appropriate securities account of the purchaser or 

his designated custodian in a registry for said securities, if immobilized or 

dematerialized, while the confirmation of sale or document of conveyance by the 

seller shall be physically delivered to the purchaser. The custodian shall hold the 

securities in the name of the buyer: Provided, That a bank/other entity authorized 

by the BSP to perform custodianship function may not be allowed to be custodian 

of securities issued or sold on a without recourse basis by said bank/entity, its 

subsidiaries or affiliates, or of securities in bearer form. 

The delivery shall be effected upon payment and shall be evidenced by a 

securities delivery receipt duly signed by the authorized officer of the custodian 

and delivered to the purchaser.


SECTION 3. Sanctions - Violation of any provision of this Circular shall be subject to 

the following sanctions/penalties. 

a. Monetary Penalties - 

First Offense - Fine of P10,000 a day for each violation reckoned from the 

date the violation was committed up to the date it was corrected. 

Subsequent Offenses - Fine of P20,000 a day for each violation reckoned 

from the date the violation was committed up to the date it was corrected. 

b. Other Sanctions 

First Offense - Reprimand for the directors/officers responsible for the violation. 

Subsequent Offense - 

1. Suspension for ninety (90) days without pay of directors/officers responsible 

for the violation; 

2. Suspension or revocation of the accreditation to perform custodianship function; 

3. Suspension or revocation of the authority to engage in quasi-banking function; 

and/or 

4. Suspension or revocation of the authority to engage in trust and other fiduciary 

business. 

SECTION 4. Effectivity - This Circular shall take effect after fifteen (15) days following 

its publication in the Official Gazette or in a newspaper of general circulation. 




Governor 

--o0o-- 


Computation of the US$ Equivalent of Dollar Linked Peso Notes 

(DLPNs) Issued by ROP in Tranches and the Amount of DLPNs 

to be Excluded in the Bankís Daily Consolidated Foreign 

Exchange Position Report (CFXPR)



This is to clarify Circular-Letter dated March 4, 2002 requiring universal and commercial 

banks to include in their Daily FX Position Reports the US$ equivalent of the DLPNs held 

by them, as a manual adjustment to the FX positions amount in the Bankís daily CFXPR. 

which provides the following guidelines in the computation: 

ìThe US dollar equivalent of the bankís holdings on the Notes shall be included in 

the computation of the bankís FX position after the initial 90 calendar days from 

issue date, to wit: 

a. For the banks that will be designated as market makers, exclude amount to 

the extent of 1 divided by the number of market makers multiplied by 50% outstanding 

issue or 5% of total outstanding issue, whichever is lower; and 

b. For the other banks, exclude amount to the extent of 50% of the regulatory 

limit.î 

For item (a), the limit is a percentage of the outstanding issue and therefore, the 

amount of DLPN holdings to be excluded in the bankís FX position shall be calculated on a 

per tranche basis. On the other hand, the amount DLPN holdings to be excluded in the 

bankís FX position for item (b) shall be determined on an aggregate basis, since the maximum 

exclusion is a percentage of the bankís regulatory limit. 

Banks designated by the Bureau of Treasury and the joint financial advisors as market 

makers in one tranche shall be considered market makers for all tranches for the purpose of 

reporting DLPNs in the Bankís daily CFXPR. 

Notwithstanding the bankís booking of its DLPN holdings, the US$ equivalent of the 

bankís DLPN holdings for each tranche shall be the face amount or notional amount (even if 

the DLPN was revalued at marked-to-market price) divided by the applicable spot Peso/US$ 

exchange rate determined on the issue dates. 

Effective immediately, universal and commercial banks are required to submit their 

daily adjusted FX position using the attached Revised Bankís Daily CFXPR form with the 

corresponding Annexes A* and B*. Sanctions provided under Circular Letter dated August 

29, 2001 shall apply for non-submission, delayed, erroneous or incomplete reporting of the 

daily CFXPR. 




Governor 

--o0o-- 

Memorandum 

Unsecured Subordinated Debt 

*Text Available at Office of the National Administrative Register, U.P. Law Complex, 

Diliman, Quezon City


Pursuant to Monetary Board Resolution No. 912 dated 26 June 2003, Item D of the 

Memorandum to All Banks and Non-Bank Financial Institutions concerned dated 17 February 

2003 prescribing the guidelines for the issuance of unsecured subordinated debt (USD) 

eligible as Tier 2 (supplementary) capital under b.b.1(8) and b.b.2(1), Subsection X116.1 of 

the Manual of Regulations for Banks (MOR) is hereby amended to read, as follows: 

ìD. Public Issuance of Unsecured Subordinated Debt 

ì1. xxx xxx xxx 

ì3. Requirements for Other Parties Involved 

ìa. xxx xxx xxx 

ìe. Public Trustee 

ì1) xxx xxx xxx 

ì3) It must have adequate risk management and must be well capitalized 

as evidenced by compliance with the risk based capital adequacy ratio (CAR) 

prescribed under Sec. X116 of the MOR for the past sixty (60) days immediately 

preceding the date of application where applicable. The 60-day compliance period 

with the risk based CAR shall be waived in evaluating a bankís eligibility to act 

as Public Trustee for another bankís Unsecured Subordinated Debt Tier 2 Offering, 

if the former bank has instituted remedial measure to its CAR deficiency by 

issuing Tier 2 capital. 

xxxx xxx xxx 

This Memorandum shall take effect after fifteen (15) days following the completion of its 

publication either in the Official Gazette or in a newspaper of general circulation. 




Governor 

--o0o-- 


Loan Limit to a Single Borrower 

Pursuant to Monetary Board Resolution No. 890 dated June 26, 2003, the first paragraph 

of Section X303 of the Manual of Regulations for Banks and for Non-Bank Financial 

Institutions is hereby amended as follows: 

Sec. X303 Loan Limit to a Single Borrower - The total liabilities of any person, 

company, corporation or firm, to a bank for money borrowed, excluding (a) loans



secured by obligations of the BSP or of the Philippine Government; (b) loans fully 

guaranteed by the government as to the payment of principal and interest; (c) 

loans fully secured by US Treasury Notes and other securities issued by central 

government and central banks of foreign countries with the highest credit quality 

given by any two internationally accepted rating agencies; (d) loans to the extent 

covered by the hold-out on or assignment of, deposits maintained in the lending 

bank and held in the Philippines; (e) loans and acceptances under letters of 

credit to the extent covered by margin deposits; and (f) other loans or credits 

which the Monetary Board may, from time to time, specify as non-risk assets, 

shall at no time exceed twenty five percent (25%) of the unimpaired capital and 

surplus of the bank. 

This Circular shall take effect immediately. 




Governor 

--o0o-- 

Memorandum 

Guidelines for the Issuance of Unsecured Subordinated 

Debt (USD) Eligible as Tier 2 Capital of Banks 

Memorandum to All Banks and Non-Bank Financial Institutions Concerned dated 17 

February 2003, as amended, on the guidelines for the issuance of unsecured subordinated 

debt (USD) eligible as Tier 2 capital of banks, specifically the first paragraph of Section 1 

(Accounting Treatment) thereof is hereby amended, to read as follows: 

ìObligations arising from the issuance of USD shall be booked under a new 

General Ledger account title ìUnsecured Subordinated Debtî, which shall be 

presented as a last item in the Liability Accounts Section of the Statement of 

Condition. However, only the net proceeds actually received from the debt 

issues shall be considered as Tier 2 capital. Moreover, if the debt is issued at 

a premium, the premium shall not be counted as part of Tier 2 capital.î 

To implement the aforesaid Section I (Accounting Treatment) of the Memorandum, the 

Manual of Accounts and reportorial requirements for universal banks and commercial banks 

prescribed under Circular No. 108 dated 9 May 1996, as amended, are accordingly amended 

to incorporate the following: 

I. Creation of new general and subsidiary ledger accounts, as follows: 

Liability Accounts


44.a Unsecured Subordinated Debt (2-4-00-00) 

Premium on Unsecured Subordinated Debt (2-4-00-01) 

Discount on Unsecured Subordinated Debt (2-4-00-02) 

Unsecured Subordinated Debt -Local Currency 

This represents obligations arising from the issuance of unsecured subordinated 

debt denominated in local currency eligible as Tier 2 (supplementary) 

capital of the bank, subject to certain terms and conditions. 

Premium on Unsecured Subordinated Debt - Local Currency 

Discount on Unsecured Subordinated Debt - Local Currency 

This represents unamortized premium/discount on issuance of unsecured 

subordinated debt denominated in local currency eligible as Tier 2 (supplementary) 

capital of the bank, subject to certain terms and conditions. The amortization 

of the premium/discount shall be made monthly by a debit/credit, respectively, 

to this account with the corresponding credit/debit to ìInterest Expense 

on Unsecured Subordinated Debt - Local Currencyî account. 

Unsecured Subordinated Debt - Foreign Regular 1/ 


debt denominated in foreign currency eligible as Tier 2 (supplementary) 

capital of the bank, subject to certain terms and conditions. These debts shall 

be recorded at their foreign currency amounts and at their local currency equivalent 

at the applicable rate of exchange on transaction dates. 

Premium on Unsecured Subordinated Debt - Foreign Regular 1/ 

Discount on Unsecured Subordinated Debt - Foreign Regular 1/ 

This represents unamortized premium/discount on issuance of unsecured 

subordinated debt denominated in foreign currency eligible as Tier 1 (supplementary) 

capital of the bank, subject to certain terms and conditions. The 

amortization of the premium./discount shall be made monthly by a debit/credit, 

respectively, to this account with the corresponding credit/debit to ìInterest 

Expense on Unsecured Subordinated Debt - Foreign Regularî account. These 

debts shall be recorded at their foreign currency amounts and at their local 

currency equivalent at the applicable rate of exchange on transaction dates. 

Unsecured Subordinated Debt - FCDU/EFCDU 


debt denominated in foreign currency eligible as Tier 2 (supplementary) 

capital of the bank, subject to certain terms and conditions, and which the bank 

may record in the FCDU/EFCDU book, provided among others that they are 

issued only to non-residents and offshore banking units in accordance with 

Section 72.2e of CB Circular No. 1389 dated 13 April 1993, as amended. These 

debts shall be recorded at their foreign currency amounts.



Premium on Unsecured Subordinated Debt - FCDU/EFCDU 

Discount on Unsecured Subordinated Debt - FCDU/EFCDU 

This represents unamortized premium/discount on issuance on unsecured 

subordinated debt denominated in foreign currency eligible as Tier 2 (supplementary) 

capital of the bank subject to certain terms and conditions, and which 

the bank may record in the FCDU/EFCDU book, provided among others that 

they are issued only to non-residents and offshore banking units in accordance 

with Section 72.2e of CB Circular No. 1389 dated 13 April 1993, as amended. 

The amortization of the premium/discount shall be made monthly by a debit/ 

credit, respectively, to this account with the corresponding credit/debit to ìInterest 

Expense on Unsecured Subordinated Debt - FCDU/EFCDUî account. 

These debts shall be recorded at their foreign currency amounts. 

Expense Accounts 

85.c.1 Interest Expense on Unsecured Subordinated Debt (6-0-02-07) 

Interest Expense on Unsecured Subordinated Debt - Local Currency 

This represents payments and/or monthly accruals of interest on issued and 

outstanding unsecured subordinated debt denominated in local currency eligible 

as Tier 2 (supplementary) capital of the bank, subject to certain terms and 

conditions. 

Interest Expense on Unsecured Subordinated Debt - Foreign Regular 


outstanding unsecured subordinated debt denominated in foreign currency eligible 


conditions. These debts shall be recorded at their foreign currency amounts 

and at their local currency equivalent at the applicable rate of exchange on 

transaction dates. 

Interest Expense on Unsecured Subordinated Debt - FCDU/-EFCDU 


outstanding unsecured subordinated debt denominated in foreign currency eligible 


conditions, and which the bank may record in the FCDU/EFCDU book, provided 

among others that they are issued only to non-residents and offshore 

banking units in accordance with Section 72.2e of CB Circular No. 1389 dated 

13 April 1993, as amended. These debts shall be recorded at their foreign 

currency amounts. 

1/ Shall be revalued in accordance with the prescribed guidelines. 

II. Redefinition of the following general and subsidiary ledger accounts:


22.r Deferred Charges (1-4-40-00) 

Deferred Charges 

Asset Accounts 

This represents expense prepayments expected to benefit the bank 

for a future period exceeding one (1) year such as organizational expense, 

goodwill, rent paid in advances, capitalized cost incurred related to the issuance 

of unsecured subordinated debt. Organizational expense and capitalized 

cost incurred related to the issuance of unsecured subordinated debt 

shall be amortized monthly over a period not exceeding five (5) years. Rent aid in 

advance and the like shall be amortized monthly in accordance with the covering 

agreement, if any. 

Deferred Charges - FCDU/EFCDU 

This represents expense prepayments in connection with transactions 

of FCDUs/EFCDUs under Circular No. 1389, as amended, expected to 

benefit the bank for a future period exceeding one (1) year, including capitalized 

cost incurred related to the issuance of unsecured subordinated debt 

which the bank may record in the FCDU/EFCDU book, provided among others 

that they are issued only to non-residents and offshore banking units in 

accordance with Section 72.2e of CB Circular No. 1389 dated 13 April 1993, 

as amended. These charges shall be recorded at their respective foreign currency 

amounts and shall be amortized monthly or in accordance with the covering 

agreement, if any. 

Liability Accounts 

37.a Accrued Interest Payable (2-3-20-02) 

Accrued Interest Payable - Domestic 

This represents the estimated liability for interest incurred/due but 

not yet paid on demand, savings, and time deposits and on domestic borrowings, 

including issuance of unsecured subordinated debt denominated in 

local currency, which shall be set up monthly against current operations. 

Accrued Interest Payable - Foreign Regular 1/ 


not yet paid on foreign borrowings, including issuance of unsecured subordinated 

debt denominated in foreign currency, which shall be set up monthly 

against current operations. This account shall be recorded at their foreign currency 

amounts and at their local currency equivalent at the applicable rate of 

exchange prevailing at the end of the month. 

Accrued Interest Payable - FCDU/EFCDU

1150 



not yet paid on demand, savings, time deposits and on foreign borrowings, 

including issuance of unsecured subordinated debt denominated in foreign 

currency which the bank may record in the FCDU/EFCDU book, provided 

among others that they are issued only to non-residents and offshore banking 

units in accordance with Section 72.2e of CB Circular No. 1389 dated 13 

April 1993, as amended, which shall be set up monthly against current operations. 

This account shall be recorded at their foreign currency amounts. Subcontrol 

accounts shall be maintained for interest due foreign banks not yet paid 

but covered with forward contract with the Bangko Sentral. 

1/ Shall be revalued in accordance with the prescribed guidelines. 

III. Revision in the BSP reports, with target dates of implementation as follows: 

1. GL Report 

Title of the Report Frequency Target date of 

Implementation 

a. Consolidated Statement of 

Condition Monthly 08/31/03 

b. Consolidated Statement of Income 

and Expenses Quarterly 09/30/03 

2. Consolidated Daily Report 

of Condition Weekly 08/29/03 to 09/04/03 

3. Published Statement of Condition 

(Form 2B) Quarterly 09/30/03 

4. Published Consolidated Statement 

of Condition (Form 2B.1) Quarterly 09/30/03 

The pertinent pages of the above listed revised BSP reports are attached as Annex A*. 

For compliance. 

Adopted: 6 Aug. 2003 

(SGD.) ALBERTO V. REYES 

Deputy Governor 

--o0o-- 

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

Quezon City




Guidelines on the Adoption of the Risk-Based 

Capital Adequacy Framework 

Pursuant to Monetary Board Resolution No. 1029 dated 24 July 2003, Circular No. 280 

dated 29 March 2001, as amended, on the guidelines on the adoption of the risk-based 

capital adequacy framework is hereby further amended to include among the on-balance 

sheet assets which are assigned fifty percent (50%) risk weight the following: 

ì(3) Securities issued by special purpose vehicles against assignment of receivables 

arising from future payments of the Philippine national government (NG) in 

connection with projects undertaken in pursuance of R.A. No. 6957, as amended: 

Provided, that such securities obtain and maintain credit ratings of at least one 

notch below the credit rating of the NG from a Bangko Sentral ng Pilipinas recognized 

rating agency. 

This Circular shall take effect fifteen (15) days after its publication either in the Official 

Gazette or in a newspaper of general circulation. 




Governor 

--o0o-- 


Securities Lending 

Pursuant to Monetary Board Resolution No. 1060 dated 31 July 2003, the provisions 

of BSP Circular No. 1389 dated 13 April 1993, The Manual of Accounts for Expanded 

Commercial Banks and Commercial Banks, and the Manual of Accounts for Thrift Banks are 

hereby amended as follows: 

SECTION 1. Items 1 and 2 of Section 72 of BSP Circular No. 1389 are hereby 

amended by adding the following provisions: 

ìEngage in securities lending activities as lender subject to the following conditions: 

a. The securities to be lent shall be limited to securities lodged under the account ìTrading 

Account Securities (TAS) - Investmentsî (for universal banks and commercial banks only) 

and ìAvailable for Sale Securities (ASS) - Foreignî;

1152 


b. The lending activity shall have prior approval of the bankís board of directors and shall be 

governed by adequate written policies and procedures duly approved by the board of directors; 

c. The securities lending shall be done through reputable internationally recognized and 

experienced third-party lending agent/intermediary which must be a regulated entity in its 

country of operation; 

d. The securities lending transaction shall be subject to a written legal agreement betweem 

the lending bank and the lending agent which must clearly specify the --- 

1. relationship as well as the respective duties and responsibilities of each 

counterparty; 

2. obligation of the borrower to redeliver a like quantity of the same issue or 

series as the loaned securities; 

3. guidelines for selecting investments for cash collateral, which shall include a 

provision that cash collateral will not be reinvested in liabilities of the lender, its 

subsidiaries or affiliates; 

4. lending fee or compensation; 

e. The loaned securities must be fully secured by debt securities of countries or entities with 

highest credit quality, cash in currencies acceptable as part of international reserves, letters 

of credit and certificates of deposits issued by banks with highest credit quality. For this 

purpose, a foreign country and a bank with highest credit quality refer to a foreign country 

and a bank given the highest credit rating by any two (2) of the following internationally 

accepted rating agencies; 

Rating Agencies Highest Rating 

Moodyís ìAa3î and above 

Standard and Poorís ìAAî and above 

Fitch IBCA ìAAî and above 

Others as may be approved by the 

Monetary Board 

Collateral value shall initially be at least 102% of the current market value of the loaned 

securities and maintained at 100% of the value of the loaned securities plus accrued interest 

thereon during the course of the loan; 

f. The lender shall do daily mark-to-market on the loaned securities and on the securities 

where cash collateral is invested/reinvested; 

g. The lender shall require from the lending agent/intermediary timely and comprehensive 

reports on the lending activity; 

h. For proper identification and monitoring, the outstanding book balance on the loaned 

securities shall be reclassified to ìGovernment Securities Lent Under Securities Lending 

Agreementsì;


i. The bank has in place a risk management system commensurate to the nature, volume 

and complexity of its operations and characterized by clear delineation of responsibility for 

risk management, adequate risk measurement systems, appropriately structured risk limits, 

effective internal controls and complete, timely and efficient risk reporting system: Provided, 

That this requirement automatically considered complied with by banks with derivatives license; 

and 

j. The bankís CAMELS composite rating in the last Bangko Sentral ng Pilipinas regular 

examination is at least ì3î, with a minimum score of ì3î on management.î 

SECTION 2. Items 1 and 2 of Section 73 of Circular No. 1389 are hereby amended by 

adding the following as eligible asset cover for FCDU/EFCDU liabilities: 

ìc. Government Securities lend under a securities lending agreement.î 

SECTION 3. The Manual of Accounts for Expanded Commercial Banks and Commercial 

Banks is hereby amended so as to create subsidiary ledger accounts under the general 

ledger accounts ìTrading Accounts Securities (TAS) - Investmentsî and ìAvailable for Sale 

Securities (ASS),î as follows: 

a. Under ìTRADING ACCOUNTS SECURITIES (TAS) - INVESTMENTSî 

1. ìGovernment Securities Lent under Securities Lending Agreement - Foreign 

Regular 

This represents the carrying amount of foreign currency denominated government 

securities lent under securities lending agreement whereby the borrower is 

under obligation to redeliver a like quantity of the same issue or series as the 

loaned security at the agreed future date.î 

2. ìGovernment Securities Purchased Lent Under Securities Lending Agreement 

- FCDU/EFCDU 

This represents the carrying amount of foreign currency denominated securities 

purchased by the FCDU/EFCDU for its trading activities which were lent 

under securities lending agreement whereby the borrower is under obligation to 

redeliver a like quantity of the same issue or series as the loaned security at the 

agreed future date.î 

b. Under ìAVAILABLE FOR SALE SECURITIES (ASS)î 

1. ìAvailable for Sale Securities Lent Under Securities Lending Agreement - 

Foreign Regular 

This represents the cost of foreign currency-denominated bonds and other debt 

instruments, such as US Treasury Notes and Bonds lent under securities lending 

agreement whereby the borrower is under obligation to redeliver a like quantity of 

the same issue or series as the loaned security at the agreed future date. Subcontrol 

accounts shall be maintained for: (a) ASS issued by residents; and (b) 

ASS issued by non-residents.î

1154 


2. ìAvailable for Sale Securities Lent Under Securities Lending Agreement - 

FCDU/EFCDU 

This represents the cost of investments in foreign currency denominated bonds 

and other debt instruments lent under securities lending agreement whereby the 

borrower is under obligation to redeliver a like quantity of the same issue or 

series as the loaned security at the agreed future date. Sub-control accounts 

shall be maintained for: (a) ASS issued by residents; and (b) ASS issued by nonresidents.î 

SECTION 4. The Manual of Accounts for Thrift Banks is hereby amended so as to 

create subsidiary accounts under the general ledger accounts ìAvailable for Sale Securities 

(ASS)î, as follows: 

a. ìAvailable for Sale Securities Lent Under Securities Lending Agreement - FCDU 

This represents the cost of short term, readily marketable, foreign currency denominated 

debt instruments lent under securities lending agreement whereby the 

borrower is under obligation to redeliver a like quantity of the same issue or 

series as the loaned security at the agreed future date. Sub-control accounts 

shall be maintained for: (a) ASS issued by residents; and (b) ASS issued by nonresidents.î 

This Circular shall take effect after fiften (15) days following its publication in the 

Official Gazette or in a newspaper of general circulation. 



(SGD.) ARMANDO L. SURATOS 

Officer-in-Charge 

--o0o-- 


Trustees 

Pursuant to Monetary Bord Resolution Nos. 630 and 996 dated May 8, 2003 and July 

18, 2003, respectively, the provisions of the Manual of Regulations for Non-Bank Financial 

Institutions are hereby amended as follows: 

SECTION 1. Section 4141S and its subsections are hereby amended to read as 

follows: 

Sec. 4141S. Definition; Qualifications; Responsibilities and Duties of Trustees


For purposes of this Section, the following shall be the definition, qualifications, 

responsibilities and duties of trustees. 

Subsec. 4141S.1 Definition of Terms 

Trustees shall include (1) those who are named as such in the articles of 

incorporations; (2) those duly elected in subsequent meetings of the NSSLAís 

members; and (3) those elected to fill vacancies in the board of trustees. 

Subsec. 4141S.2 Qualifications of Trustees 

No person shall be eligible as trustee of an NSSLA unless he is a member of 

good standing of such NSSLA. 

In addition, such person shall have the qualifications and none of the disqualifications 

as provided in pertinent laws and BSP rules. 

A trustee shall have the following minimum qualifications: 

a. He shall be at least 25 years of age at the time of his election/appointment; 

b. He shall be at least a COLLEGE graduate OR have at least FIVE (5) years 

experience in business, OR shall have undergone any BSP training in NSSLA or 

banking operations; provided, however, that undergraduates eligible to be 

elected as trustees in the NSSLAís by-laws may be allowed as may be 

approved by the Monetary Board: 

c. He must have attended a special seminar on corporate governance for 

board of trustees conducted or accredited by the BSP; and 

d. He must be fit and proper for the position of a trustee of the NSSLA. In 

determining whether a person is fit and proper for the position of a trustee, 

the following matters must be considered: 

- integrity/probity; 

- competence; 

- education; 

- diligence; and 

- experience/training. 

The foregoing qualifications for trustees shall be in addition to those already 

required or prescribed by R.A. No. 8367, as amended, and other 

existing applicable laws and regulations. 

Subsec. 4141S.3 Powers and Authority of the Board of Trustees 

The corporate powers of an NSSLA shall be exercised, its business conducted, 

and all its property shall be controlled and held by its board of trustees. The 

powers of the board of trustees as conferred by law are original and cannot be 

revoked by the members. The trustees hold their office charged with the duty to 

act for the NSSLA in accordance with their best judgment.

1156 


Subsec. 4141S.4 General Responsibility of the Board of Trustees 

The position of an NSSLA trustee is a position of trust. A trustee assumes certain 

responsibilities to different constituencies or stakeholders (e.g. the NSSLA itself, 

its member-depositors and other creditors, its management and employees and 

the public at large). These constituencies or stakeholders have the right to expect 

that the institution is being run in a prudent and sound manner. 

The board of trustees is primarily responsible for the corporate governance of the 

NSSLA. To ensure good governance of the NSSLA, the board of trustees should 

establish strategic objectives, policies and procedures that will guide and direct 

the activities of the NSSLA and the means to attain the same as well as the 

mechanism for monitoring managementís performance. While the management 

of the day-to-day affairs of the institution is the responsibility of the management 

team, the board of trustees is, however, responsible for monitoring and overseeing 

management action. 

Subsec. 4141S.5 Duties and Responsibilities of the Board of Trustees 

To ensure prudent and efficient administration of NSSLAs, the following guidelines 

shall govern the responsibilities and duties of the board of trustees of NSSLAs: 

a. Specific Duties and Responsibilities of the Board of Trustees 

1. To select and appoint officers who are qualified to administer the NSSLA 

affairs effectively and soundly and to establish adequate selection process 

for all personnel. 

It is the primary responsibility of the board of trustees to appoint competent 

management team at all times. The board of trustees should apply fit and proper 

standards on key personnel. Integrity, technical, expertise and experience in the 

institutionís business, either current or planned, should be the key considerations 

in the selection process. And because mutual trust and a close working relationship 

are important, the board of trusteesí choice should share its general operating 

philosophy and vision for the institution. The board of trustees shall establish 

an appropriate compensation package for all personnel which shall be consistent 

with the interest of all stakeholders. 

2. To establish objectives and draw up a business strategy for achieving 

them. 

Consistent with the institutionís objectives, business plans should be established 

to direct its on-going activities. The board of trustees should ensure that 

performance against plan is regularly reviewed, with corrective action taken as 

needed. 

3. To conduct the affairs of the institutions with high degree of integrity 

Since reputation is a very valuable asset, it is in the institutionís best interest 

that in dealings with its members, it observes a high standard of integrity. The


board of trustees should prescribe corporate values, codes of conduct and other 

standards of appropriate behavior for itself, the senior management and other 

employees. Among other matters, activities and transactions that could result or 

potentially result in unethical conduct shall be strictly prohibited. It shall provide 

policies that will prevent the use of the facilities of the NSSLA in furtherance of 

criminal and other illegal activities. 

4. To prescribe a clear assignment of responsibilities and decision making 

authorities, incorporating a hierarchy of required approvals from individuals 

to the board of trustees. 

The board of trustees shall establish in writing the limits of the discretionary 

powers of each officer, committee, sub-committee and such other group for the 

purpose of lending, investing or committing the NSSLA to any financial undertaking 

or exposure to risk at any time. The board of trustees shall have a schedule of 

matters and authorities reserved to it for decision, such as major capital expenditures, 

equity investments and divestments. 

5. To effectively supervise the NSSLAís affairs 

The board of trustees shall establish a system of checks and balances which 

applies in the first instance to the board itself. Among the members of the board, 

an effective system of checks and balances must exist. The system shall also 

provide a mechanism for effective check and control by the board of trustees 

over the chief executive officer and key managers and by the latter over the line 

officers of the NSSLA. 

6. To monitor, assess and control the performance of management 

The board of trustees shall put in place an appropriate reporting system so that it 

is provided with relevant and timely information to be able to effectively assess the 

performance of management. For this purpose, it may constitute a governance 

committee. 

7. To adopt and maintain adequate risk management policy 

The board of trustees shall be responsible for the formulation and maintenance of 

written policies and procedures relating to the management of risks throughout 

the institution. The risk management policy shall include: 

- a comprehensive risk management approach; 

- a detailed structure of limits, guidelines and other parameters used to govern 

risk-taking; 

- a clear delineation of lines of responsibilities for managing risk; 

-an adequate system of measuring risk; and 

-effective internal controls and a comprehensive risk-reporting process. 

The board of trustees may constitute a committee for this purpose. 

8. To constitute the Audit Committee

1158 


To constitute the Audit Committee which shall be comprised of trustees, preferably 

with accounting and finance experience. Said audit committee provides oversight 

of the institutionís internal and external auditors. It shall be responsible for 

the setting up of the internal audit department and for the appointment of the 

internal auditor as well as the independent external auditor. It shall monitor and 

evaluate the adequacy and effectiveness of the internal control system. 

9. To meet regularly 

To properly discharge its function, the board of trustees shall meet regularly. 

Independent views in board meetings shall be given full consideration and all such 

meetings shall be duly minuted. 

10. To keep the individual members of the board and the members informed 

It is the duty of the board of trustees to present to all its members and to the 

stakeholders a balanced and understandable assessment of the NSSLAís performance 

and financial condition. It should also provide appropriate information that 

flows internally and to the public. All members of the board shall have reasonable 

access to any information about the institution. 

11. To ensure that the NSSLA has beneficial influence on the economy 

The board of trustees has a continuing responsibility to provide those services 

and facilities which will be supportive of the national economy. 

12. To assess at least annually its performance and effectiveness as a body, 

as well as its various committees, the chief executive officer and the NSSLA 

itself. 

The composition of the board of trustees shall also be reviewed regularly with the 

end in view of having a balanced membership. Towards this end, a system and 

procedure for evaluation shall be adopted which may include, but not limited to, 

the setting of benchmark and peer group analysis. 

13. To keep their authority within the powers of the institution as prescribed 

in the articles of incorporation, by-laws and in existing laws, rules and regulations. 

To conduct and maintain the affairs of the institution within the scope of its authority 

as prescribed in its charter and in existing laws and regulations, the board of 

trustees shall appoint a compliance officer who shall be responsible for coordinating, 

monitoring and facilitating compliance with existing laws and regulations. 

The compliance officer shall be vested with appropriate authority and provided 

with appropriate support and resources. It may also constitute a compliance 

committee. 

b. Specific Duties and Responsibilities of a Trustee


1. To conduct fair business transactions with the NSSLA and to ensure that 

personal interest does not bias board decisions. 

Trustees should, whenever possible, avoid situations that would give rise to a 

conflict of interest. If transactions with the institution cannot be avoided, it should 

be done in the regular course of business and upon terms not less favorable to 

the institution than those offered to others. The basic principle to be observed is 

that a trustee should not use his position to make profit or to acquire benefit or 

advantage for himself and/or his related interests. He should avoid situations that 

would compromise his impartiality. 

2. To act honestly and in good faith, with loyalty and in the best interest of 

the Association, its members, regardless of the amount of their capital contributions, 

and creditors, if any. 

A trustee must always act in good faith, with the care which an ordinarily prudent 

man would exercise under similar circumstances. While a trustee should always 

strive to promote the interest of all members, he shall also give due regard to the 

rights and interests of other stakeholders. 

3. To devote time and attention necessary to properly discharge their duties 

and responsibilities. 

Trustees shall devote sufficient time to familiarize themselves with the institutionís 

business. They must be constantly aware of the institutionís condition and be 

knowledgeable enough to contribute meaningfully to the boardís work. They must 

attend and actively participate in board and committee meetings, request and 

review meeting materials, ask questions and request explanations. If a person 

cannot give sufficient time and attention to the affairs of the institution, he shall 

neither accept his nomination nor run for election as member of the board of 

trustees. 

4. To act judiciously 

Before deciding on any matter brought before the board of trustees, every trustee 

should thoroughly evaluate the issues, ask questions and seek clarifications when 

necessary. 

5. To exercise independent judgment 

A trustee should view each problem/situation objectively. When a disagreement 

with other occurs, he should carefully evaluate the situation and state his position. 

He should not be afraid to take a position even though it might be unpopular. 

Corollarily, he should support plans and ideas that he thinks will be beneficial to 

the institution. 

6. To have a working knowledge of the statutory and regulatory requirements 

affecting the Association, including the content of its articles of incorporation 

and by-laws, the requirements of the BSP and where applicable, the 

requirements of other regulatory agencies.

1160 


A trustee also keeps himself informed of the industry developments and business 

trends in order to safeguard the institutionís competitiveness. 

7. To observe confidentiality 

Trustees must observe the confidentiality of non-public information acquired by 

reason of their position as trustees. They may not disclose said information to 

any other person without the authority of the board. 

SECTION 2. Section 4142S.1 is hereby amended to read as follows: 

Section 4142S.1 Definition of Officers 

Officers shall include the President, Executive Vice President, Senior Vice 

President, Vice President, General Manager, Secretary, Treasurer, and others 

mentioned as officers of the bank, or those whose duties as such are defined in 

the by-laws, or are generally known to be the officers of the NSSLA (or any of its 

branches and offices other than the head office) either through announcement, 

representation, publication or any kind of communication made by the bank. 

A person holding the position of chairman, vice-chairman or any other position of 

the board who also performs functions of management such as those ordinarily 

performed by regular officers shall also be considered an officer. 

Section 4142S.2 Qualifications of Officers 

An officer shall have the following minimum qualifications: 

a. He shall be at least twenty-one (21) years of age; 

b. He shall be at least a COLLEGE graduate OR have at least FIVE (5) 

years experience in NSSLA or banking operations or related activities or in 

a field related to his position and responsibilities, OR have undergone training 

in NSSLA or banking operations acceptable to the appropriate supervising 

and examining department of the BSP. 

c. He must be fit and proper for the position of an officer of the NSSLA. 

In determining whether a person is fit and proper for the position of an 

officer, the following matters must be considered: 

i. integrity/probity; 

ii. competence; 

iii. education; 

iv. diligence; and 

v. experience/training. 

The foregoing qualifications for officers shall be in addition to those already 

required or prescribed by R.A. No. 8367, as amended, and other 

existing applicable laws and regulations. 

SECTION 3. Section 4143S is hereby amended to read as follows: 

Sec. 4143S. Disqualifications of Trustees and Officers


The following regulations shall govern the disqualifications of NSSLAís trustees 

and officers. 

Subsec. 4143S.1 Persons Disqualified to Become Trustees. 

Without prejudice to specific provisions of laws prescribing disqualifications for 

trustees, the following are disqualified from becoming trustees: 

a. Permanently disqualified 

The following persons are permanently disqualified from holding a 

trustee position: 

1. Persons who have been convicted by final judgment of the court for offenses 

involving dishonesty or breach of trust, such as estafa, embezzlement, extortion, 

forgery, malversation, swindling and theft; 

2. Persons who have been convicted by final judgment of the court for violation of 

banking/quasi-banking/NSSLA laws; 

3. Persons who have been judicially declared insolvent, spendthrift or incapacitated 

to contract; or 

4. Directors/trustees, officers or employees of closed banks/quasi-banks/trust 

entities, NSSLAs or other non-bank financial institutions under BSP supervision/ 

regulation who were responsible for such institutionís closure as determined by 

the Monetary Board. 

b. Temporarily disqualified 

Persons disqualified from holding a trustee position for a specific/indefinite period 

of time are: 

1. Persons who refuse to fully disclose the extent of their business interest to the 

appropriate supervising and examining department when required pursuant to a 

provision of law or of a circular, memorandum or rule or regulation of the BSP. 

This disqualification shall be in effect as long as the refusal persists; 

2. Trustees who have been absent or who have not participated for whatever 

reasons in more than fifty percent (50%) of all meetings, both regular and special, 

of the board of trustees during their incumbency, or any twelve (12) month 

period during said incumbency. This disqualification applies for purposes of the 

succeeding election; 

3. Persons who are delinquent in the payment of their obligations as defined 

hereunder: 

a. Delinquency in the payment of obligations means that an obligation of a 

person with an NSSLA where he/she is a trustee or officer, or at least two obliga-

1162 


tions with other banks/financial institutions, under different credit lines or loan 

contracts, are past due pursuant to existing regulations. 

b. Obligations shall include all borrowings from a bank/quasi-bank/trust entity/ 

NSSLA/other financial institutions obtained by: 

i. A trustee or officer for his own account or as the representative or 

agent of others or where he/she acts a guarantor, indorser, or surety for loans 

from such financial institutions; 

officer; 

ii. The spouse or child under the parental authority of the trustee or 

iii. Any person whose borrowings or loan proceeds were credited to 

the account of, or used for the benefit of a trustee or officer; 

iv. A partnership of which a trustee or officer, or his/her spouse is the 

managing partner or a general partner owning a controlling interest in the partnership; 

and 

v. A corporation, association or firm wholly-owned or majority of the 

capital of which is owned by any or a group of persons mentioned in the foregoing 

items (i), (ii), and (iv); 

sists. 

This disqualification shall be in effect as long as the delinquency per- 

4. Persons convicted for offenses involving dishonesty, breach of trust or violation 

of banking/quasi-banking and NSSLA laws and regulations but whose conviction 

has not yet become final and executory; 

5. Directors/trustees and officers of closed banks/quasi-banks/trust entities/ 

NSSLAs and other financial institutions under BSP supervision/regulation pending 

their clearance by the Monetary Board; 

6. Trustees disqualified for failure to observe/discharge their duties and responsibilities 

prescribed under existing regulations. This disqualification applies until the 

lapse of the specific period of disqualification or upon approval by the Monetary 

Board on recommendation by the appropriate supervising and examining department 

of such trusteesí election/re-election; 

7. Trustees who failed to attend the special seminar on Corporate Governance for 

board of trustees required by BSP. This disqualification applies until the trustee 

concerned had attended such seminar; 

8. Persons dismissed/terminated from employment for cause. This disqualification 

shall be in effect until they have cleared themselves of involvement in the 

alleged irregularity;


9. Those under preventive suspension; or 

10. Persons with derogatory records with the National Bureau of Investigation 

(NBI), court, police, Interpol and monetary authority (central bank) of other countries 

(for foreign trustees and officers) involving violation of any law, rule or regulation 

of the Government or any of its instrumentalities adversely affecting the 

integrity and/or ability to discharge the duties of an NSSLA trustee/officer. The 

disqualification applies until they have cleared themselves of involvement in the 

alleged irregularity. 

Subsec. 4143S.2 Persons Disqualified to Become Officers 

a. The disqualifications for trustees mentioned in Subsec. 4143S.1 shall likewise 

apply to officers, except those stated in Items b.2 and b.7 

b. Except as may be authorized by the Monetary Board or the Governor, the 

spouse or a relative within the second degree of consanguinity or affinity of any 

person holding the position of Chairman, Vice Chairman, President, Executive 

Vice President or any position of equivalent rank, General Manager, Treasurer, 

Chief Cashier or Chief Accountant is disqualified from holding or being elected 

or appointed to any of said positions in the same NSSLA; and the spouse or 

relative within the second degree of consanguinity or affinity of any person holding 

the position of Manager, Cashier, or Accountant of a branch or office of a 

NSSLA is disqualified from holding or being appointed to any of said positions in 

the same branch or office; 

c. Except as may otherwise be allowed under C.A. No. 108, otherwise known as 

ìThe Anti-Dummy Law,î as amended, foreigners cannot be officers or employees 

of NSSLAs; and 

d. Any appointive or elective public official, whether full time or part time, except 

in cases where such service is incident to financial assistance provided by the 

government or government owned or controlled corporations or in cases allowed 

under existing law. 

Subsec. 4143S.3 Disqualification Procedures 

a. Upon the establishment of any of the grounds for disqualification, the office of 

the disqualified trustee or officer shall immediately become vacant, except in the 

case of delinquency in the payment of obligations wherein the trustee or officer 

concerned shall be given a grace period of thirty (30) days after such ground for 

disqualification has been established. 

b. All cases of disqualification shall be immediately reported to the Board of 

Trustees of the NSSLA concerned. If the ground for disqualification is delinquency 

in the payment of obligations, the report shall be made at the expiry of the 

30-day grace period mentioned in item ìaî above. 

The board of trustees shall act on the report not later than the following board 

of trusteesí meeting. Within seventy two (72) hours thereafter, the corporate

1164 


secretary shall report to the Governor of the BSP through the appropriate supervising 

and examining department the name of the trustee or officer involved, the 

ground for his disqualification and the action taken by the Board. 

c. When the ground for disqualification ceases to exist, the trustee or officer 

concerned shall be eligible to become trustee or officer of any NSSLA only upon 

prior approval by the Monetary Board. 

Subsec. 4143S.4. Effect of Non-possession of Qualifications or Possession 

of Disqualifications 

Trustees/officers elected or appointed without possessing the qualifications aforementioned 

or possessing any of the disqualifications as enumerated herein, shall 

vacate their respective positions immediately. 

Subsec. 4143S.5 Watchlisting 

To provide the BSP with a central information file to be used as reference in 

passing upon and reviewing the qualifications of persons elected or appointed as 

trustee or officer of a NSSLA, the Supervision and Examination Sector shall 

maintain a watchlist of disqualified NSSLA trustees/officers under the following 

procedures: 

a. Watchlist categories - Watchlisting shall be categorized as follows: 

1. Disqualification File ìAî (Permanent)- Trustees/officers/employees permanently 

disqualified by the Monetary Board from holding a director/trustee/officer 

position in any institution under the supervision/regulation of BSP. 

2. Disqualification File ìBî (Temporary) - Trustees/officers/employees temporarily 

disqualified by the Monetary Board from holding a director/trustee/officer 

position in any institution under the supervision/regulation of BSP. 

b. Inclusion of trustees/officers/employees in the watchlist. Upon recommendation 

by the Supervision and Examination Sector, the inclusion of trustees/ 

officers/employees in watchlist disqualification files ìAî and ìBî on the basis of 

decisions, actions or reports of the courts, banks, quasi-banks, other NSSLAs 

and NBFIs under BSP supervision, BSP, NBI or any other administrative agencies 

shall first be approved by the Monetary Board. 

c. Notification of trustees/officers/employees. Upon approval by the Monetary 

Board, the concerned trustee/officer/employee shall be informed through registered 

mail, with registry return receipt card, at his/her last known address of his/ 

her inclusion in the masterlist of watchlisted persons disqualified to be a trustee/ 

officer in any financial institution under the supervision of the BSP. 

d. Confidentiality. Watchlisting shall be for internal use only and may not be 

accessed or queried upon by outside parties including banks, quasi-banks, trust 

entities, NSSLAs or other NBFIs under BSP supervision except with the authority


of the person concerned and with the approval of the Deputy Governor, SES, or 

the Governor, or the Monetary Board. 

e. Delisting. All delistings shall be approved by the Monetary Board upon recommendation 

of the operating departments of the SES except in cases of persons 

known to be dead, where delisting shall be automatic upon proof of death and 

need not be elevated to the Monetary Board. Delisting may be approved by the 

Monetary Board in the following cases: 

Watchlist - Disqualification File ìBî (Temporary) - 

i. After the lapse of the specific period of disqualification; 

ii. When the conviction by the court for crimes involving dishonesty, 

breach of trust and/or violation of banking laws becomes final and executory, in 

which case the trustee/officer/employee is relisted to Watchlist - Disqualification 

File ìAî (Permanent); 

iii. Upon favorable decision or clearance by the appropriate body, i.e., 

court, NBI, bank, quasi-bank, trust entity or such other agency/body where the 

concerned individual had derogatory record. 

Trustees/officers/employees delisted from the Watchlist - Disqualification File ìBî 

other than those upgraded to Watchlist - Disqualification File ìAî shall be eligible 

for reemployment with any bank, quasi-bank, trust entity, NSSLA and NBFI under 

BSP supervision. 

SECTION 4. A paragraph is hereby added to Section 4145S (Compensation of Trustees, 

Officers and Employees) which shall read as follows: 

To protect the funds of depositors and creditors, the Monetary Bord may regulate/ 

restrict the payment by the NSSLA of compensation, allowances, fees, bonuses, and fringe 

benefits to its trustees and officers in exceptional cases and when the circumstances warrant, 

such as, but not limited to the following: 

a. When the NSSLA is found by the Monetary Board to be conducting business 

in an unsafe or unsound manner; 

b. When the NSSLA is found by the Monetary Bord to be in an unsatisfactory 

financial condition such as, but not limited to, the following cases: 

1. Its capital is impaired; and 

2. It has suffered continuous losses from operations for the past three years; 

In the presence of any one or more of the circumstances mentioned above, the 

Monetary Board may impose the following restrictions in the compensation and 

other benefits of trustees and officers: 

i. Except for the financial assistance to meet expenses for the medical, maternity, 

education and other emergency needs of the trustees or officers or their 

immediate family, other forms of financial assistance may be suspended.

1166 


ii. When the total compensation package including salaries, allowances, fees 

and bonuses of trustees and officers are significantly excessive as compared 

with industry averages, the Monetary Board may order their reduction to reasonable 

levels. 

SECTION 5. Section 4148S is hereby added to read as follows: 

Full-time Manager for NSSLAs. 

All NSSLAs with total assets of at least Five Million Pesos (P5,000,000.00) 

shall maintain a full-time Manager to take charge of the operations of the NSSLA. 

The Manager shall possess all the qualifications and shall not have any disqualification 

aforementioned herein. 

SECTION 6. Section 4631S is hereby added to read as follows: 

Revocation/Suspension of NSSLA License 

In reference to Section 22 of R.A. No. 8367 or the Revised Non-Stock Savings 

and Loan Association Act of 1997, the Monetary Board, upon due notice and 

hearing, has the authority to either revoke or suspend the license of any NSSLA 

for such period as it deems necessary, based on any of the following grounds: 

a. Suspension of license: 

1. repeated violations (uncorrected similar examination findings for the last two 

examinations, regular or special) of any of the provisions of R.A. No. 8367, and/ 

or any rules or regulations promulgated to implement said law, or BSP directives 

and/or instructions; 

2. paid-up capital is impaired by continuing losses for the last two fiscal years; 

Lifting of the suspension of license shall be approved by the Monetary Board 

upon recommendation of the appropriate BSP supervising department. 

b. Revocation of license: 

1. when the solvency of the NSSLA is imperiled by losses and irregularities; 

2. when the NSSLA willfully violates any provision of R.A. No. 8367, any rule or 

regulation promulgated to implement said law and BSP directives and/or instructions; 

3. when the NSSLA is conducting business in an unsafe and unsound manner; 

4. when it is unable to pay its liabilities as they become due in the ordinary 

course of liabilities; 

5. when it has insufficient realizable assets, as determined by the BSP, to meet 

its liabilities;


6. when it cannot continue in business without involving probable losses to its 

members or creditors; and 

7. when it has wilfully violated a cease and desist order of the Monetary Board 

involving acts or transactions which amount to fraud or a dissipation of assets of 

the institution. 

As to the effects of the revocation/suspension of license of the NSSLA, the NSSLA 

is prohibited from engaging in the business of accumulating the savings of its 

members and using such accumulations for loans to its members, subject to 

applicable sanctions and penalties provided by law in case of violation thereof. 

After the cessation of its operations due to revocation of its license, the NSSLA 

should proceed with its dissolution, in accordance with the provisions under the 

Corporation Code. The dissolution of a corporation involves the termination of its 

corporate existence, at least, as far as the right to go on doing ordinary business 

is concerned, and the winding up of its affairs, the payments of its debts and 

distribution of its assets among the members or stakeholders or other persons 

involved. The board of trustees of the corporation also has the option of adopting 

a plan for the distribution of its assets, as stated under Section 95 of the Corporation 

Code. 

After the revocation/suspension of its license, the Monetary Board may direct 

the board of trustees of the NSSLA to proceed with the voluntary dissolution of the 

corporation. In the event that the board of trustees refuses to effectuate such 

dissolution, the Monetary Board may refer the matter to the Solicitor General for 

the filing of a quo warranto case against the corporation in accordance with the 

provision under the Corporation Code. 


or in two newspaper of general circulation. 





--o0o-- 


Redeemable Shares 

Pursuant to Monetary Board Resolution Nos. 705 and 1028 dated 22 May 2003 and 24 

July 2003, respectively, approving the issuance by banks of redeemable preferred shares 

that do not need to be replaced with at least an equivalent amount of newly paid-in shares 

upon redemption and the treatment thereof for purposes of capital adequacy ratio computation, 

the provisions of the Manual of Regulations for Banks are hereby amended as follows:

1168 


1. Subsection X126.5 a of the Manual is hereby amended to read as follows: 

ìa. Conditions. Banks may issue redeemable shares subject to the following conditions: 

X X X 

3. The applicant bank after the issuance of redeemable shares shall comply with 


a. Redemption of shares shall be allowed at the specific dates or periods fixed 

for redemption only upon prior approval of the BSP and, where the conditions 

of the issuance specifically state, only if the shares redeemed are replaced 

with at least an equivalent amount of newly paid-in shares so that the total paid-in 

capital stock is maintained at the same level immediately prior to redemption: 

Provided, That the redemption shall not be earlier than five (5) years after the 

date of issuance: Provided, further, That such redemption may not be made 

where the bank is insolvent or if such redemption will cause insolvency, impairment 

of capital or inability of the bank to meet its debts as they mature; 

X X X 

g. shares issued with the replacement requirement upon redemption shall 

be eligible as Upper Tier 2 capital for purposes of computing Qualifying 

Capital as provided in Subsection X116.1 of the Manual. Shares issued 

without such condition shall be eligible as Lower Tier 2 capital.î 

2. Subsection X116.1.b of the Manual is hereby amended to read as follows: 

ìb. Tier 2 (supplementary) capital which shall be the sum of - 

b.1 Upper Tier 2 capital - 

X X X 

2. Paid up limited life redeemable preferred stock issued with the condition 

that redemption thereof shall be allowed only if the shares redeemed are 

replaced with at least an equivalent amount of newly paid-in shares so that 

the total paid-in capital stock is maintained at the same level prior to redemption; 

X X X 

4. Limited life redeemable preferred stock with the replacement requirement 

upon redemption dividends distributable; 

X X X 

Provided: That the following items shall be deducted from the total of upper Tier 2 

capital:


2. Limited life redeemable preferred stock treasury shares with the replacement 

requirement upon redemption; and 

3. Sinking fund for the redemption of limited life redeemable preferred stock 

with the replacement requirement upon redemption; and 

b.2 Lower Tier 2 capital -- 

1. Paid-up limited life redeemable preferred stock without the replacement 

requirement upon redemption: Provided, That it shall be subject to a 

cumulative discount factor of 20% per year during the last five (5) years to 

maturity (i.e., 20% if the remaining life is 4 years to less than 5 years, 40% if 

the remaining life is 3 years to less than 4 years, etc.); 

2. Limited life redeemable preferred stock without the replacement requirement 

upon redemption dividends distributable; 

3. With prior BSP approval, unsecured subordinated debt with a minimum 

original maturity of at least five (5) years, subject to the following conditions: 

X X X 

4. Deposit for perpetual and cumulative preferred stock subscription; and 

5. Deposit for limited life redeemable preferred stock subscription with the 

replacement requirement upon redemption: 

Provided, That the following items shall be deducted from the total of lower 

Tier 2 capital: 

1) Limited life redeemable preferred stock treasury shares without the replacement 

requirement upon redemption; 

2) Sinking fund for redemption of limited life redeemable preferred stock 

without the replacement requirement upon redemption: Provided, That the 

amount to be deducted shall be limited to the balance of redeemable preferred 

stock after applying the cumulative discount factor: 

Provided, further, that the total amount of lower Tier 2 capital that may be included 

in the Tier 2 capital shall be a maximum of 50% of total Tier 1 capital (net of 

deductions therefrom): Provided, furthermore, That the total amount of upper 

and lower Tier 2 capital that may be included in the qualifying capital shall be a 

maximum of 100% of total Tier 1 capital (net of deductions therefrom).î 

3. Subsection X 116.3 ee. of the Manual is hereby amended to read as follows: 

ìee. Redeemable preferred stock. This refers to preferred stock which may be 

redeemed at the specific dates or periods fixed for redemption, only upon prior 

approval of the BSP, and where the conditions of the issuance specifically

1170 


state, only if the shares redeemed or replaced with at least an equivalent amount 

of newly paid-in shares so that the total paid-in capital stock is maintained at the 

same level immediately prior to redemption: Provided, that redemption shall not 

be earlier than five (5) years after the date of issuance: Provided, further, That 

such redemption may not be made where the bank is insolvent or if such redemption 

will cause insolvency, impairment of capital or inability of the bank to meet its 

debts as they mature.î 

The revised Part I of the prescribed report forms on the Computation of Risk Based 

Capital Adequacy Ratio Covering Credit Risks Incorporating the aforementioned amendments 

are attached as Annex ìAî* (for universal banks, commercial banks, and thrift banks) 

and Annex ìBî* (for rural banks and cooperative banks). 

Banks which have issues of limited life redeemable preferred shares compliant with 

Circular No. 241 and outstanding prior to the effectivity of Circular No. 280 shall be allowed 

to redeem the same prior to the set redemption date, without the need for replacement with at 

least an equivalent amount of newly paid-in shares within one (1) year from the effectivity of 

this Circular upon prior BSP approval provided that: 

1. The redeemable preferred shareholders will give consent; 

2. The bank meets the required minimum capital adequacy ratio and minimum 

capital level for the bank category after such redemption; and 

3. Such redemption will not cause the inability of the bank to meet the obligations 

as they mature. 

This Circular shall take effect fifteen (15) days after its publication either in the Official 



Date Filed: 10 September 2003 



--o0o-- 


Credit Card Operations 

Pursuant to Monetary Board Resolution No. 1138 dated 07 August 2003, prescribing 

the rules and regulations that shall govern the credit card operations of banks and subsidiary 

credit card companies, the Manual of Regulations for Banks, the Manual of Regulations for 

Non-Bank Financial Institutions, the Manual of Accounts for Universal Banks and Commercial 

Banks and the Manual of Accounts for Thrift Banks are hereby amended, as follows: 


Quezon City.


SECTION 1. Sections X320 and 4301N and Subsecs. X320.1 to X320.14 and Subsecs. 

430N.1 to 4301N.14 are hereby added to the Manual of Regulations for Banks and Manual of 

Regulations for Non-Bank Financial Institutions, respectively, to read as follows: 

Sections X320 and 4301N Credit Card Operations; General Policy. The Bangko 

Sentral ng Pilipinas (BSP) shall foster the development of consumer credit through innovative 

products such as credit cards under conditions of fair and sound consumer credit 

practices. The BSP likewise encourages competition and transparency to ensure more 

efficient delivery of services and fair dealings with customers. 

Towards this end, the rules and regulations that shall govern the credit card operations 

of banks and bank subsidiary credit card companies, aligned with global best practices, are 

hereby issued, as follows: 

Subsecs. X320.1 and 4301N.1 Definition of Terms 

a. ìCredit Cardî means any card, plate, coupon book or other credit device existing for the 

purpose of obtaining money, property, labor or services on credit. 

b. ìCredit Card Receivablesî represents the total outstanding balance of credit cardholders 

arising from purchases of goods and services, cash advances, annual membership/renewal 

fees as well as interest, penalties, insurance fees, processing/service fees and other charges. 

c. ìMinimum Amount Dueî or ìMinimum Payment Requiredî means the minimum amount 

that the credit cardholder needs to pay on or before the payment due date for a particular 

billing period/cycle as defined under the terms and conditions or reminders stated in the 

statement of account/billing statement which may include: (a) total outstanding balance multiplied 

by the required payment percentage or a fixed amount whichever is higher; (b) any 

amount which is part of any fixed monthly installment that is charged to the card; (c) any 

amount in excess of the credit line; and (d) all past due amounts, if any. 

d. ìDefaultî or ìDelinquencyî shall mean non-payment of, or payment of any amount less 

than, the ìMinimum Amount Dueî or ìMinimum Payment Requiredî within two (2) cycle 

dates, in which case, the Total Amount Due for the particular billing period as reflected in the 

monthly statement of account may be considered in default or delinquent. 

e. ìAcceleration Clauseî shall mean any provision in the contract between the bank and the 

cardholder that gives the bank the right to demand the obligation in full in case of default or 

non-payment of any amount due or for whatever valid reason. 

Subsecs. X320.2 and 4301N.2 Risk Management System - To safeguard their interests, 

banks and subsidiary credit card companies are required to establish an appropriate 

system for managing risk exposures from credit card operations which shall be documented 

in a complete and concise manner. The risk management system shall cover the organizational 

set-up, records and reports, accounting, policies and procedures and internal control. 

Written policies, procedures and internal control guidelines shall be established on the 

following aspects of credit card operations:

1172 


a) Requirements for application; 

b) Solicitation and application processing; 

c) Determination and approval of credit limits; 

d) Pre-approved cards; 

e) Issuance, distribution and activation of cards; 

f) Supplementary or extension cards; 

g) Cash advances; 

h) Billing and payments; 

i) Deferred Payment Program or Special Installment Plans; 

j) Collection of past due accounts; 

k) Handling of accounts for write-off; 

l) Suspension, cancellation and withdrawal or termination of card; 

m) Renewal of cards, upgrade or downgrade of credit limit; 

n) Lost or stolen cards and their replacement; 

o) Accounts of directors, officers, stockholders and related interests (DOSRI) and 

employees; 

p) Disposition of errors and/or questions about the billing statement/statement of 

account and other customerís complaints; and 

q) Dealings with marketing agents/collection agents 

Subsecs. X 320.3 and 4301N.3 Minimum Requirements - Before issuing credit cards, 

banks and/or subsidiary credit card companies must exercise proper diligence by ascertaining 

that applicants possess good credit standing and are financially capable of fulfilling 

their credit commitments. The net take home pay of applicants who are employed, the net 

monthly receipts of those engaged in trade or business, or the net worth or cash flow 

inferred from deposits of those who are neither employed nor engaged in trade or business 

or the credit behavior exhibited by the applicant from his other existing credit cards, or other 

lifestyle indicators such as but not limited to club memberships, ownership and location of 

residence and motor vehicle ownership shall be determined and used as basis for setting 

credit limits. The gross monthly income may also be used provided reasonable deductions 

are estimated for income taxes, premium contributions, loan amortizations and other deductions. 

All credit card applications, especially those solicited by third party representatives/ 

agents, shall undergo a strict credit risk assessment process and the information stated 

thereon validated and verified by persons other than those handling marketing. 

Subsecs. X320.4 and 4301N.4 Information to be disclosed. Banks or their subsidiary 

credit card companies shall disclose to each person to whom the credit card privilege is 

extended in the agreement, contract or any equivalent document governing the issuance or 

use of the credit card or any amendment thereto or in such other statement furnished the 

cardholder from time to time, prior to the imposition of the charges and to the extent applicable, 

the following information: 

a. non-finance charges, individually itemized, which are paid or to be paid by the cardholder 

in connection with the transaction but which are not incident to the extension of credit; 

b. the percentage that the interest bears to the total amount to be financed expressed as a 

simple monthly or annual rate, as the case may be, on the outstanding balance of the 

obligation;


c. the effective interest rate per annum; 

d. for installment loans, the number of installments, amount and due dates or periods of 

payment schedules to repay the indebtedness; 

e. the default, late payment/penalty fees or similar delinquency-related charges payable in 

the event of late payments; 

f. the conditions under which interest may be imposed, including the time period, within 

which any credit extended may be repaid without interest; 

g. the method of determining the amount of interest and/or delinquency charges, including 

any minimum or fixed amount imposed as interest and/or delinquency charge; 

h. the method of determining the amount of interest and/or delinquency charges, including 

any minimum or fixed amount imposed as interest and/or delinquency charge; 

i. where one or more periodic rates may be used to compute interest, each such rate, the 

range of balances to which it is applicable, and the corresponding simple annual rate; and 

j. Other fees, such as membership/renewal fees, processing fees, collection fees, credit 

investigation fees and attorneyís fees. 

Subsecs. X320.5 and 4301N.5 Accrual of interest earned. Interest accrued and/or 

booked shall be reversed and no accrual of interest shall be allowed ninety (90) days after 

the credit card receivable has become past due as defined in Subsec. X306.1 of the Manual 

of Regulations for Banks. 

Subsecs. X320.6 and 4301N.6 Finance Charges. The amount of finance charges in 

connection with any credit card transaction shall refer to interest charged to the cardholder. 

Subsecs. X320.7 and 4301N.7 Deferral Charges - The bank and the cardholder may, 

prior to the consummation of the transaction, agree in writing to a deferral of all or part of one 

or more unpaid installments and the bank may collect a deferral charge which shall not 

exceed the rate previously disclosed pursuant to the provisions on disclosure. 

Subsecs. X320.8 and 4301N.8 Late Payment/Penalty Fees. No late payment or penalty 

fee shall be collected from cardholders unless the collection thereof is fully disclosed in 

the contract between the issuer and the cardholder: 

Provided, That late payment or penalty fees shall be based on the unpaid minimum amount 

due or a prescribed minimum fixed amount: Provided, further, that said late payment or 

penalty fees may be based on the total outstanding balance of the credit card obligation, 

including amounts payable under installment terms or deferred payment schemes, if the 

contract between the issuer and the cardholder contains ìacceleration clauseî and the total 

outstanding balance of the credit card is classified and reported as past due. 

Subsecs. X320.9 ad 4301N.9 Confidentiality of Information. Banks and subsidiary 

credit card companies shall keep strictly confidential the data on the cardholder or consumer, 

except under the following circumstances:

1174 


a. disclosure of information is with the consent of the cardholder or consumer; 

b. release, submission or exchange of customer information with other financial 

institutions, credit information bureaus, credit card issuers, their subsidiaries and 

affiliates; 

c. upon orders of court of competent jurisdiction or any government office or 

agency authorized by law, or under such conditions as may be prescribed by the 

Monetary Board; 

d. disclosure to collection agencies, counsels and other agents of the bank or 

card company to enforce its rights against the cardholder; 

e. disclosure to third party service providers solely for the purpose of assisting or 

rendering services to the bank or card company in the administration of its credit 

card business; and 

f. disclosure to third parties such as insurance companies, solely for the purpose 

of insuring the bank from cardholder default or other credit loss, and the cardholder 

from fraud or unauthorized charges. 

Subsecs. X320.10 and 4301N.10 Suspension, termination of effectivity and reactivation. 

Banks or their subsidiary credit card companies shall formulate criteria or parameters 

for suspension, revocation and reactivation of the right to use the card and shall 

include in their contract with cardholders a provision authorizing the issuer to suspend or 

terminate its effectivity, if circumstances warrant. 

Subsecs. X320.11 and 4301N.11 Inspection of records covering credit card transactions. 

Banks or their subsidiary credit card companies shall make available for inspection 

or examination by the appropriate supervising and examining department of the Bangko 

Sentral ng Pilipinas complete and accurate files on card applicant/cardholder to support the 

consideration for approval of the application and determination of the credit limit which shall 

be in accordance with the verified debt repayment ability and/or net worth of the card 

applicant/cardholder. 

Subsecs. X320.12 and 4301N.12 Offsets. For purposes of transparency and adequate 

disclosure, the credit card issuer shall inform/notify the credit cardholder in the 

agreement, contract or any equivalent document governing the issuance or use of the credit 

card that, pursuant to the provisions of Articles 1278 to 1290 of the New Civil Code of the 

Philippines, as amended, the use of his credit card will subject his deposit/s with the bank to 

offset against any amount/s due and payable on his credit card which have not been paid in 

accordance with the terms of the agreement/contract. 

Subsecs. X 320.13 and 4301N.13 Handling of complaints. Banks or subsidiary credit 

card companies shall give cardholders at least twenty (20) calendar days from statement 

date to examine charges posted in his/her statement of account and inform the bank/subsidiary 

credit card companies in writing of any billing error or discrepancy. Within ten (10) 

calendar days from receipt of such written notice, the bank/subsidiary credit card company 

shall send a written acknowledgement to the cardholder unless the action required is taken 

within such ten-day period.


Not later than two (2) billing cycles or two months which in no case shall exceed ninety 

(90) days after receipt of the notice and prior to taking any action to collect the contested 

amount, or any part thereof, banks/subsidiary credit card companies shall make appropriate 

corrections in their records and/or send a written explanation or clarification to the cardholder 

after conducting an investigation. Nothing in this Subsection shall be construed to prohibit 

any action by the bank/subsidiary credit card company to collect any amount which has not 

been indicated by the cardholder to contain a billing error or apply against the credit limit of 

the cardholder the amount indicated to be in error. 

Subsecs. X320.14 and 4301N.14 Sanctions. Violations of the provisions of this Section 

shall be subject to any, or all of the following sanctions depending upon their severity: 

a. Disqualification of the bank concerned from the credit facilities of the BSP 

except as may be allowed under Section 84 of R.A. No. 7653; 

b. Prohibition of the bank concerned from the extension of additional credit accommodation 

against personal security; and 

c. Penalties and sanctions provided under Sections 36 and 37 of R.A. No. 7653; 

SECTION 2. Subsec X306.1f. of the Manual of Regulations for Banks is hereby 

amended to read as follows: 

Subsec. X306.1 Accounts considered past due 

The following shall be considered as past due: 

x x x 

f. Credit card receivables - If the minimum amount due or minimum payment 

required is not paid within two (2) cycle dates, the total amount due stated in the 

monthly billing statement: Provided, however, that the total outstanding balance 

which includes amortization/s of any fixed monthly installment plan or deferred 

payment scheme shall be considered and reported past due when the number of 

monthly installments in arrears is three (3) or more: Provided, further, that the 

bank shall have the right to demand the obligation in full in case of default in any 

installment thereon if the contract between the bank and the cardholder contains 

an ìacceleration clauseî. 

SECTION 3. Appendix 18 - Guidelines in Identifying and Monitoring Problem Loans 

and Other Risk Assets and Setting up of Allowance for Probable Losses (Appendix to Sec. 

X302) of the Manual of Regulations for Banks is hereby amended by adding Item C. after 

Item l.B.4 Loss, to read as follows: 

C. Credit Card Receivables 

Credit card receivables shall be classified in accordance with age as follows:

1176 


No. of days past due Classification 

91 - 120 Substandard 

121-180 Doubtful 

181 or more Loss 

The foregoing is the minimum classification requirement. Management may therefore 

formulate additional specific guidelines. 

SECTION 4. The following General Ledger accounts shall be added to the Manual of 

Accounts for Universal Banks and Commercial Banks as well as the Manual of Accounts for 

Thrift Banks: 

Credit Card Receivables (GL ACCT CODE) 

This represents total outstanding credit balance of credit cardholders arising from 

purchases of goods and services, cash advances, annual membership/renewal fees as well 

as interest, penalties, insurance fees, processing/service fees and other charges. 

Past Due Credit Card Receivables (GL ACCT CODE) 

This represents credit card receivables which are considered past due under existing 

rules and regulations. The loan shall remain in this account until fully paid; arrangements are 

formalized for its reactivation/restructuring or collection case has been filed in court. 

Items in Litigation - Credit Card Receivables (GL ACCT CODE) 

This represents credit card receivables for which collection cases have been filed in 

court. The loan shall remain in this account during the pendency of the proceedings, until full 

payment, restructuring of the obligation, or such other disposition is made as would cause 

such proceedings to cease. All expenses incurred incidental to the litigation shall be charged 

to operations and lodged under ìLitigation/Assets Acquired Expensesî account. Corresponding 

memorandum entries for the expenses shall be made on the individual subsidiary 

ledger of the account concerned. 

Allowance for Probable Losses - Credit Card Receivables (GL ACCT CODE) 

This represents the amount set up against current operations to provide for losses 

which may arise from non-collection of credit card receivables. Under existing regulation, 

this account is also known as ìvaluation reserveî. 

SECTION 5. Repealing Clause - This Circular repeals Circular No. 349 dated 27 

August 2002. 

SECTION 6. Effectivity - This Circular shall take effect after ninety (90) days from 

date of its publication in a newspaper of general circulation. 

Adopted: 21 Aug. 2003





--o0o-- 


Unsecured Subordinated Term Debt Instruments 

Pursuant to Monetary Board Resolution No. 1062 dated 31 July 2003, the provisions of 

the Manual of Regulations for Banks are hereby amended as follows: 

1. The last paragraph of Subsection X116.1 of the Manual is hereby amended to read as 

follows: 

ìc. Less deductions from the total of Tier 1 and Tier 2 capital, as follows: 

X X X 

5) Reciprocal investments in unsecured subordinated term debt instruments of 

other banks/quasi-banks in excess of the lower of (i) an aggregate ceiling of 5% 

of total Tier 1 capital of the bank; or (ii) 10% of the total outstanding unsecured 

subordinated term debt issuance of the other bank/quasi-bank, 

X X Xî 

2. The last paragraph of Subsection X116.2.a of the Manual on on-balance sheet assets that 

are 100% risk-weighted is hereby amended to read as follows: 

ì100% risk weight - 

All other assets including, among others, the following: 

X X X 

9) Reciprocal investments in unsecured subordinated term debt instruments of 


of total Tier 1 capital of the bank; or (ii) 10% of the total outstanding unsecured 

subordinated term debt issuance of the other bank/quasi-bank, 

X X Xî 

This Circular shall take effect on 1 January 2004. 

Adopted: 1 Sept. 2003

1178 




Governor 

--o0o-- 


Guidelines on the Adoption of the Risk-Based 

Capital Adequacy Framework by Quasi-Banks 

The Monetary Board, in its Resolution No. 1062 dated 31 July 2003, approved the 

following guidelines on the adoption of the risk-based capital adequacy framework by quasibanks 

taking into consideration Section 34 of The General Banking Law of 2000. The 

guidelines shall initially cover only capital requirements for credit risks pending issuance of 

supplementary guidelines to incorporate market risks. Upon effectivity, the guidelines shall 

replace the existing provisions of Section 4116Q and its subsections of the Manual of Regulations 

for Non-Bank Financial Institutions, which are hereby revised to read, as follows: 

ìSec. 4116Q Minimum Ratio - The risk-based capital ratio of a quasi-bank, 

expressed as a percentage of qualifying capital to risk-weighted assets, shall not 

be less than ten percent (10%) for both solo basis (head office plus branches) 

and consolidated basis (parent quasi-bank plus subsidiary financial allied undertakings, 

but excluding insurance companies). 

This ratio shall be maintained daily. 

ß4116Q.1. Qualifying Capital. The qualifying capital shall be the sum of -- 

a. Tier 1 (core) capital - 

1) Paid-up common stock; 

2) Paid-up perpetual and non-cumulative preferred stock; 

3) Common stock dividends distributable; 

4) Perpetual and non-cumulative preferred stock dividends distributable; 

5) Surplus; 

6) Surplus reserves; 

7) Undivided profits; and 

8) Minority interest in the equity of subsidiary financial allied undertakings 

which are less than wholly-owned: Provided, That a quasi-bank shall not use 

minority interests in the equity accounts of consolidated subsidiaries as avenue 

for introducing into its capital structure elements that might not otherwise qualify 

as Tier 1 capital or that would, in effect, result in an excessive reliance on preferred 

stock within Tier 1; 

Provided, further, That the following items shall be deducted from the total of Tier 

1 capital:


1. Common stock treasury shares; 

2. Perpetual and non-cumulative preferred stock treasury shares; 

3. Net unrealized losses on underwritten listed equity securities purchased (for 

investment houses); 

4. Unbooked valuation reserves and other capital adjustments based on the 

latest report of examination as approved by the Monetary Board; 

5. Total outstanding unsecured credit accommodations, both direct and indirect, 

to directors, officers, stockholders and their related interests (DOSRI); 

6. Deferred income tax; and 

7. Goodwill; and 

b. Tier 2 (supplementary) capital which shall be the sum of -- 

b.1 Upper Tier 2 capital - 

1. Paid-up perpetual and cumulative preferred stock; 

2. Perpetual and cumulative preferred stock dividends distributable; 

3. Appraisal increment reserve - quasi-bank premises, as authorized by the 

Monetary Board; 

4. Net unrealized gains on underwritten listed equity securities purchased: 

Provided, That the amount thereof that may be included in upper Tier 2 capital 

shall be subject to a 55% discount (for investment houses); 

5. General loan loss provision: Provided, That the amount thereof that may be 

included in upper Tier 2 capital shall be limited to a maximum of 1.25% of gross 

risk-weighted assets, and any amount in excess thereof shall be deducted from 

the total risk-weighted assets in computing the denominator of the risk-based 

capital ratio; 


original maturity of at least ten (10) years, subject to the following conditions: 

i. It must not be secured nor covered by a guarantee of the issuer or 

related party; 

ii. It must be subordinated in the right of payment of principal and 

interest to all creditors of the quasi-bank, except those creditors expressed to 

rank equally with, or behind holders of the debt. Subordinated creditors must 

waive their right to set off any amounts they owe the quasi-bank against subordinated 

amounts owed to them by quasi-bank. The issue documentation must clearly 

state that the debt is subordinated; 

iii. It must be fully paid-up. Only the net proceeds actually received 

from debt issues can be included as capital. If the debt is issued at a premium, 

the premium cannot be counted as part of capital; 

iv. It must not be redeemable at the initiative of the holder; 

v. It must not contain any clause which requires acceleration of payment 

of principal, except in the event of insolvency; 

vi. It must not be repayable prior to maturity without the prior consent 

of the BSP: Provided, That repayment may be allowed in connection with call 

option only after a minimum of five (5) years from issue date and only if -- 

- The quasi-bankís capital ratio is at least equal to the required minimum 

capital ratio; and

1180 


- The debt is simultaneously replaced with issues of new capital which 

is neither smaller in size nor or lower quality than the original issue; 

vii. It may allow a moderate step-up in the interest rate in conjunction 

with a call option, only if the step-up occurs at a minimum of ten (10) years after 

the issue date and if it results in an increase over the initial rate that is not more 

than 100 basis points, provided that only one (1) rate step up shall be allowed over 

the life of the instrument; 

viii. It must provide for possible conversion into common shares or 

preferred shares or possible deferral of payment of principal and interest if the 

quasi-bankís capital ratio becomes less than the required minimum capital ratio; 

ix. It must provide for the principal and interest on the debt to absorb 

losses where the quasi-bank would not otherwise be solvent; 

x. It must allow deferment of interest payment on the debt in the event 

of, and at the same time as the elimination of dividends on all outstanding common 

or preferred stock of the issuer. It is acceptable for the deferred interest to 

bear interest, but the interest rate payable on deferred interest should not exceed 

market rates; 

xi. It must be underwritten by a third party not related to the issuer 

quasi-bank nor acting in reciprocity for and in behalf of the issuer quasi-bank; 

xii. It must be issued in minimum denominations of at least five hundred 

thousand pesos (P500,000.00) or its equivalent; and 

xiii. It must clearly state on its face that it is not a deposit and is not 

insured by the Philippine Deposit Insurance Corporation (PDIC); 

Provided, That it shall be subject to a cumulative discount factor of 20% per year 

during the last five (5) years to maturity (i.e., 20% if the remaining life is 4 years 

to less than 5 years, 40% if the remaining life is 3 years to less than 4 years, 

etc.): Provided, further, That where it is denominated in a foreign currency, it 

shall be revalued periodically (at least monthly) in Philippine peso at prevailing 

exchange rate using the same exchange rate used for revaluation of foreign 

currency-denominated assets, liabilities and forward contracts under existing regulations: 

Provided, furthermore, That, for purposes of reserve requirement regulation, 

it shall not be treated as a deposit substitute liability or other forms of borrowings; 

7. Deposit for common stock subscription; and 

8. Deposit for perpetual and non-cumulative preferred stock subscription: 

Provided, That the following terms shall be deducted from the total of upper Tier 

2 capital: 

1. Perpetual and cumulative stock treasury shares; 

b.2 Lower Tier 2 capital - 

1. Paid-up limited life redeemable preferred stock: Provided, That these shall 

be subject to a cumulative discount factor of 20% per year during the last five (5) 

years to maturity (i.e., 20% if the remaining life is 4 years to less than 5 years, 

40% if the remaining life is 3 years to less than 4 years, etc.);


2. Limited life redeemable preferred stock dividends distributable; 


original maturity of at least five (5) years, subject to the following conditions: 

i. It must not be secured nor covered by a guarantee of the issuer or 

related party; 

ii. It must be subordinated in the right of payment of principal and 

interest to all creditors of the quasi-bank, except those creditors expressed to 

rank equally with, or behind holders of the debt. Subordinated creditors must 

waive their right to set off any amounts they owe the quasi-bank against subordinated 

amounts owned to them by the quasi-bank. The issue documentation must 

clearly state that the debt is subordinated; 

iii. It must be fully paid-up. Only the net proceeds actually received 

from debt issues can be included as capital. If the debt is issued at a premium, 

the premium cannot be counted as part of capital; 

iv. It must not be redeemable at the initiative of the holder; 

v. It must not contain any clause which requires acceleration of payment 

of principal, except in the event of insolvency; 

vi. It must not be repayable prior to maturity without the prior consent 

of the BSP: Provided, That repayment may be allowed in connection with call 

option only after a minimum of five (5) years from issue date and only if -- 

- The quasi-bankís capital ratio is at least equal to the required 

minimum capital ratio; and 

- The debt is simultaneously replaced with issues of new capital 

which is neither smaller in size nor of lower quality than the 

original issue; 

vii. It may allow a moderate step-up in the interest rate in conjunction 

with a call option, only if the step-up occurs at a minimum of five (5) years after 

the issue date and if it results in an increase over the initial rate that is not more 

than 100 basis points or 50% of the initial credit spread, at the option of the bank, 

provided that only one (1) rate step up shall be allowed over the life of the instrument; 

viii. It must be underwritten by a third party not related to the issuer 

quasi-bank nor acting in reciprocity for and in behalf of the issuer quasi-bank; 

ix. It must be issued in minimum denominations of at least five hundred 

thousand pesos (P500,000.00) or its equivalent; and 

x. It must clearly state on its face that it is not a deposit and is not 

insured by the Philippine Deposit Insurance Corporation (PDIC): 

Provided, further, That it shall be subject to a cumulative discount factor of 20% 

per year during the last five (5) years to maturity (i.e., 20% if the remaining life is 

4 years to less than 5 years, 40% if the remaining life is 3 years to less than 4 

years, etc.): Provided, furthermore, That where it is denominated in a foreign 

currency, it shall be revalued periodically (at least monthly) in Philippine peso 

using the same exchange rate used for revaluation of foreign currency-denomi-

1182 


nated assets, liabilities and forward contracts under existing regulations: Provided, 

furthermore, That, for purposes of reserve requirement regulation, it shall 

not be treated as equivalent to a deposit substitute liability or other forms of 

borrowings; and 

4. Deposit for perpetual and cumulative preferred stock subscription; 

Provided, That the following items shall be deducted from the total of Lower Tier 2 

capital: 

1. Limited life redeemable preferred stock treasury shares; and 

2. Sinking fund for redemption of limited life redeemable preferred stock; 

Provided, That the amount to be deducted shall be limited to the balance of 

redeemable preferred stock after applying the cumulative discount factor: 

Provided, further, That the total amount of lower Tier 2 capital that may be included 

in the Tier 2 capital shall be a maximum of 50% of total Tier 1 capital (net 

of deductions therefrom): Provided, furthermore, that the total amount of upper 

and lower Tier 2 capital that may be included in the qualifying capital shall be a 

maximum of 100% of total Tier 1 capital (net of deductions therefrom); 

c. Less deductions from the total of Tier 1 and Tier 2 capital, as follows: 

1. Investments in equity of unconsolidated subsidiary banks and other subsidiary 

financial allied undertakings, but excluding insurance companies (for solo basis); 

2. Investments in debt capital instruments of unconsolidated subsidiary banks (for 

solo basis); 

3. Investments in equity of subsidiary insurance companies and subsidiary nonfinancial 

allied undertakings; 

4. Reciprocal investments in equity of other banks/enterprises; and 

5. Reciprocal investments in unsecured subordinated term debt instruments of 


of total Tier 1 capital of the quasi-bank; or (ii) 10% of the total outstanding unsecured 

subordinated term debt issuance of the other bank/quasi-bank: 

Provided, That any asset deducted from the qualifying capital in computing the 

numerator of the risk-based capital ratio shall not be included in the risk-weighted 

assets in computing the denominator of the ratio. 

ìß 4116Q.2 Risk-Weighted Assets. The risk-weighted assets shall be determined by 

assigning risk weights to amounts of on-balance sheet assets and to credit equivalent 

amounts of off-balance sheet items (inclusive of derivative contracts): Provided, That the 

following shall be deducted from the total risk-weighted assets: 

1. General loan loss provision (in excess of the amount permitted to be included in 

upper Tier 2 capital); and


2. Unbooked valuation reserves and other capital adjustments affecting asset 

accounts based on the latest report of examination as approved by the Monetary 

Board. 

a. For on-balance sheet assets, the risk-weighted amount shall be the product of the book 

value of the asset multiplied by the risk weight associated with that asset, as follows: 

0% risk weight - 

1. Cash on hand; 

2. Claims on or portions of claims guaranteed by or collateralized by securities 

issued by -i 

Philippine national government and BSP; and 

ii. Central governments and central banks of foreign countries with the 

highest credit quality as defined in Subsec. 4116Q.3; 

3. Loans to the extent covered by hold-out on, or assignment of deposit substitutes 

maintained with the lending quasi-bank; 

4. Portions of loans covered by Industrial Guarantee and Loan Fund (IGLF) 

guarantee; 

5. Real estate mortgage loans to the extent guaranteed by the Home Guaranty 

Corporation (HGC); 

6. Loans to the extent guaranteed by the Trade and Investment Development 

Corporation of the Philippines (TIDCORP); 

7. Residual value of leased equipment to the extent covered by Deposits on lease 

contracts (for financing companies); 

8. Lease Contract Receivables to the extent covered by the excess of Deposits 

on lease contracts over residual value of leased equipment (for financing companies); 

and 

9. Foreign currency notes and coins on hand acceptable as international reserves; 


1. Checks and other cash items; 


issued by non-central government public sector entities of foreign countries with 

the highest credit quality as defined in Subsec. 4116Q.3; 

3. Claims on or portions of claims guaranteed by Philippine incorporated banks/ 

quasi-banks with the highest credit quality as defined in Subsec. 4116Q.3; 

4. Claims on or portions of claims guaranteed by foreign incorporated banks with 

the highest credit quality as defined in Subsec. 4116Q.3; 


issued by multilateral development banks; 

6. Loans to exporters to the extent guaranteed by Small Business Guarantee and 

Finance Corporation (SBGFC); and 

7. Foreign currency checks and other cash items denominated in currencies 

acceptable as international reserves; 

50% risk weight -

1184 


1. Loans for housing purpose, fully secured by first mortgage on residential 

property that is or will be occupied or leased out by the borrower; and 

2. Local government unit (LGU) bonds which are covered by Deed of Assignment 

of Internal Revenue allotment of the LGU and guaranteed by the LGU Guarantee 

Corporation; 


All other assets including, among others, the following: 

1. Claims on central governments and central banks of foreign countries other 

than those with the highest credit quality; 

2. Claims on Philippine local government units; 

3. Claims on non-central government public sector entities of foreign countries 

other than those with the highest credit quality; 

4. Claims on government-owned or controlled commercial corporations; 

5. Claims on Philippine incorporated banks/quasi-banks other than those with the 

highest credit quality; 

6. Claims on foreign incorporated banks other than those with the highest credit 

quality; 

7. Loans to companies engaged in speculative residential building or property 

development; 

8. Claims on the private sector (except those deducted from capital); 

9. Equity investments (except those deducted from capital); 

10. Equipment and other real estate for lease (for financing companies); 

11. Real Estate for sale/lease; 

12. Quasi-bank premises, furniture, fixtures and equipment (net); 

13. Appraisal increment - quasi-bank premises, furniture, fixtures and equipment 

(net); 

14. Real and other properties owned or acquired (net); 

15. Foreign currency notes and coins on hand not acceptable as international 

reserves; 

16. Foreign currency checks and other cash items not denominated in foreign 

currencies acceptable as international reserves; 

except those which are deducted from capital, as follows: 

1. Unsecured credit accommodations, both direct and indirect, to DOSRI; 

2. Deferred income tax; 

3. Goodwill; 

4. Sinking fund for redemption of limited life redeemable preferred stock; 

5. Equity investments in unconsolidated subsidiary banks and other subsidiary 

financial allied undertakings, but excluding insurance companies; 

6. Investments in debt capital instruments of unconsolidated subsidiary banks; 

7. Equity investments in subsidiary insurance companies and subsidiary nonfinancial 

allied undertakings; 

8. Reciprocal investments in equity of other banks/enterprises; 

9. Reciprocal investments in unsecured subordinated term debt instruments of 

other banks/quasi-banks, in excess of the lower of (i) an aggregate ceiling of 5%


of total Tier 1 capital of the quasi-bank; or (ii) 10% of the total outstanding unsecured 

subordinated term debt issuance of the other bank/quasi-bank; 

b. For off balance sheet items, the risk-weighted amount shall be calculated using a two-step 

process. First, the credit equivalent amount of an off-balance sheet item shall be determined 

by multiplying its notional principal amount by the appropriate credit conversion factor, as 

follows: 

100% credit conversion factor - 

This shall apply to direct credit substitutes, e.g., general guarantees of indebtedness 

and acceptances (including endorsements with the character of acceptances), 

and shall include - 

1) Outstanding guarantees issued 

This shall also apply to sale and repurchase agreements and asset sales with 

recourse where the credit risk remains with the quasi-bank (to the extent not 

included in the balance sheet), as well as to forward asset purchases, and partlypaid 

shares and securities, which represent commitments with certain drawdown: 

Provided, That these items shall be weighted according to the type of asset and 

not according to the type of counterparty with whom the transaction has been 

entered into. 


This shall apply to - 

1. Note issuance facilities and revolving underwriting facilities (for investment 

houses); and 

2. Other commitments, e.g., formal standby facilities and credit lines with an 

original maturity of more than one (1) year. This shall include -- 

i. Underwritten accounts unsold (for investment houses). 


This shall apply to commitments with an original maturity of up to one (1) year. 

This shall also apply to those not involving credit risk, and shall include -- 

1. Items held for safekeeping/custodianship; 

2. Trust department accounts 

3. Items held as collaterals; etc. 

Second, the credit equivalent amount shall be treated like any on-balance sheet asset 

and shall be assigned the appropriate risk weight, i.e., according to the obligor, or if relevant, 

the qualified guarantor or the nature of collateral. 

c. For derivative contracts, the credit equivalent amount shall be the sum of the current 

credit exposure (or replacement cost) and an estimate of the potential future credit exposure 

(or add-on): Provided, that the following shall not be included in the computation:

1186 


1. Instruments which are traded on exchange where they are subject to daily 

receipt and payment of cash variation margin; and 

2. Exchange rate contracts with original maturity of 14 calendar days or less. 

The current credit exposure shall be the positive mark-to-market value of the 

contract (or zero or negative). The potential future credit exposure shall be the 

product of the notional principal amount of the contract multiplied by the appropriate 

potential future credit conversion factor, as indicated below: 

Residual Maturity Interest Rate Contract Exchange 

Rate Contract 

One (1) year or less 0.0% 1.0% 

Over one (1) year to five (5) years 0.5% 5.0% 

Over five (5) years 1.5% 7.5% 

Provided, That for contracts with multiple exchanges of principal, the factors are 

to be multiplied by the number of remaining payments in the contract: Provided, 

further, That for contracts that are structured to settle outstanding exposure following 

specified payment dates and where the terms are reset such that the 

market value of the contract is zero on these specified dates, the residual 

maturity would be set equal to the time until the next reset date, and in the case of 

interest rate contracts with remaining maturities of more than one (1) year that 

meet these criteria, the potential future credit conversion factor is subject to a 

floor of five tenths percent (0.5%): Provided, furthermore, That no potential future 

credit exposure shall be calculated for single currency floating/floating interest 

rate swaps, i.e., the credit exposure on these contracts would be evaluated 

solely on the basis of their mark-to-market value. 

The credit equivalent amount shall be treated like any on-balance sheet asset, 

and shall be assigned the appropriate risk weight, i.e., according to the obligor, or 

if relevant, the qualified guarantor or the nature of collateral: Provided, That a 

50% risk weight shall be applied in respect of obligors which would otherwise 

attract a 100% risk weight. 

The extent to which a claim is guaranteed/collateralized shall be determined by the 

amount of guarantee coverage/current market value of securities pledged, in comparison 

with the book value of the on-balance sheet asset or the notional principal amount of the offbalance 

sheet exposure, except for derivative contracts for which determination is generally 

made in relation to credit equivalent amount.î 

ß 4116Q.3. Definitions. 

a. Amount due from the BSP - This refers to all deposits of the reporting quasi-bank with the 

BSP. 

b. Appraisal increment reserve - This shall form part of capital only if authorized by the 

Monetary Board.


c. Quasi-bank premises, furniture, fixtures and equipment net of depreciation - This refers 

to the cost of land and improvements used as the quasi-bank premises, and furniture, fixtures 

and equipment owned by the quasi-bank. 

d. Cash on hand - This refers to total cash held by the quasi-bank consisting of both notes 

and coins in Philippine currency. 

e. Central government of a foreign country - This refers to the central government which is 

regarded as such by a recognized banking supervisory authority in that country. 

f. Claims - This refers to loans or debt obligations of the entity on whom the claim is held, and 

shall include, but shall not be limited to, the following accounts, inclusive of accumulated 

market gains/(losses) and accumulated bond discount/(premium amortization), and net of 

specific allowance for probable losses: 

1) Due from BSP; 

2) Due from other banks; 

3) Interbank loans receivables; 

4) Loans and discounts, including Lease Contract Receivables, net of Advance 

Leasing Income Received and Receivables Financed (for financing companies); 

5) Restructured loans; 

6) Trading account securities - loans; 

7) Underwriting accounts - debt securities (for investment houses); 

8) Underwriting accounts - equity securities (for investment houses); 

9) Trading account securities - debt securities; 

10) Trading account securities - equity securities (for investment houses); 

11) Available for sale securities; 

12) Investments in bonds and other debt instruments; and 

13) Others, e.g., accounts receivable and accrued interest receivable. 

Accruals on a claim shall be classified and risk weighted in the same way as the 

claim. 

g. Consolidated basis - This refers to unsecured subordinated term debt instruments qualifying 

as capital of banks. 

h. Debt capital instruments - This refers to investments in capital stock of companies, firms 

or enterprises, made for purposes of control, affiliation or other continuing business advantage. 

i. Equity Investments - This refers to investments in capital stock of companies, firms or 

enterprise, made for purposes of control, affiliation or other continuing business advantage. 

j. Exchange rate contracts - This includes cross-currency interest rate swaps, forward 

foreign exchange contracts, currency futures, currency options purchased and similar instruments. 

k. Financial allied undertakings - This refers to enterprises or firms with homogenous or 

similar activities/business/functions with the financial intermediary and may include but not

1188 


limited to leasing companies, banks, investment houses, financing companies, credit card 

companies, financial institutions catering to small and medium scale industries (including 

venture capital corporations), companies engaged in stock brokerage/securities dealership, 

companies engaged in foreign exchange dealership/brokerage, holding companies, and 

such other similar activities as the Monetary Board may declare as appropriate from time to 

time, but excluding insurance companies. 

l. Foreign country/foreign incorporated bank and Philippine incorporated bank/quasi-bank 

with the highest credit quality - This refers to a foreign country/foreign incorporated bank 

and Philippine incorporated bank/quasi-bank given the highest credit rating of any two (2) of 

the following internationally accepted rating agencies: 

Rating Agency Highest Rating 

1) Moodyís ìAa3î and above 

2) Standard and Poorís ìAAî and above 

3) Fitch IBCA ìAAî and above 

4) Others as may be approved by 

the Monetary Board ìAAî and above 

m. Forward asset purchases - This refers to a commitment to purchase a loan, security or 

other asset at a specified future date, usually on prearranged terms. 

n. Goodwill This refers to an intangible asset that represents the excess of the purchase 

price over the fair market value of identifiable assets acquired less liabilities assumed in 

acquisitions accounted for under the purchase method of accounting. 

o. Interest rate contracts This includes single-currency interest rate swaps, basis swaps, 

forward rate agreements, interest rate futures, interest rate options purchased and similar 

instruments. 

p. Loans for housing purpose, fully secured by first mortgage on residential property that 

is or will be occupied or leased out by the borrower. This shall not include loans to companies 

engaged in speculative residential building or property development. 

q. Loans to the extent covered by hold-out on, or assignment of deposit substitutes maintained 

in the lending quasi-bank. A loan shall be considered as secured by a hold-out, or 

assignment of deposit substitute only if such deposit substitute account is covered by a holdout 

agreement or deed of assignment signed by the investor/placer in favor of the quasibank. 

This shall not include loans transferred to/carried by the quasi-bankís trust department 

secured by deposit substitute hold-out/assignment. 

r. Multilateral development banks. This refers to International Bank for Reconstruction and 

Development, Inter-American Development Bank, Asian Development Bank, African Development 

Bank, European Investment Bank and European Bank for Reconstruction and Development. 

s. Non-central government public sector entity of a foreign country. This refers to entities 

which are regarded as such by a recognized banking supervisory authority in the country in 

which they are incorporated.


t. Note issuance facilities and revolving underwriting facilities. This refers to an arrangement 

whereby a borrower may draw down funds up to a prescribed limit over an extended 

period by repeated issues to the market of promissory notes which the quasi-bank committed 

to underwrite. 

u. Other commitments. This includes undrawn portion of any binding arrangements which 

obligate the quasi-bank to provide funds at some future date. 

v. Other commitments with an original maturity of up to one (1) year. This includes any 

revolving or undated open-ended commitments, e.g., unused credit lines, provided that 

these can be unconditionally cancelled at any time and are subject to credit revision at least 

annually. 

w. Partly-paid shares and securities. This arises where only a part of the issue price or 

nominal face value of a security purchased has been subscribed and the issuer may call for 

the outstanding balance (or a further installment), either on a date predetermined at the time 

of issue, or at an unspecified future date. 

x. Perpetual preferred stock. This refers to preferred stock that does not have a maturity 

date, that cannot be redeemed at the option of the holder of the instrument, and that has no 

provision that will require future redemption of the issue. Consistent with these provisions, 

any perpetual preferred stock with a feature permitting redemption at the option of the issuer 

may qualify as capital only if the redemption is subject to prior approval of the BSP. 

y. Philippine local government units. This refers to the Philippine government units below the 

level of national government, such as city, provincial, and municipal governments. 

z. Philippine national government. This shall refer to the Philippine national government and 

their agencies such as departments, bureaus, offices, and instrumentalities, but excluding 

government-owned and controlled commercial corporations. 

aa. Private sector. This refers to entities other than banks, quasi-banks and government. 

This shall also include commercial companies owned by the public sector, such as government-owned 

or controlled commercial corporations. 

bb. Redeemable preferred stock. This refers to preferred stock which may be redeemed at 

the specific dates or periods fixed redemption. 

cc. Sale and repurchase agreements and asset sales with recourse. This refers to arrangements 

whereby a quasi-bank sells a loan, security or fixed asset to a third party with a 

commitment to repurchase the asset after a certain time, or in the event to a certain contingency. 

dd. Solo basis.. This refers to combined statement of condition of head office and branches. 

ee. Subsidiary. This refers to a corporation or firm more than 50% of the outstanding voting 

stock of which is directly or indirectly owned, controlled or held with the power to vote by a 

quasi-bank.

1190 


ff. Treasury shares. This refers to the quasi-bankís own shares of stock that have been 

issued and fully paid for, subsequently re-acquired through purchase or donations and have 

not been cancelled or reissued. This also refers to shares of a parent quasi-bank held by a 

subsidiary financial allied undertaking in a consolidated statement of condition.î 

ß4116Q.4 Required Reports. Quasi-banks shall submit a report of their risk-based 

capital adequacy ratio on a solo basis (head office plus branches) and on a consolidated 

basis (parent quasi-bank plus subsidiary financial allied undertakings, but excluding insurance 

companies) quarterly to the appropriate supervising and examining department of the BSP in 

the attached prescribed forms within the deadlines, i.e., 15 banking days and 30 banking 

days after the end of reference quarter, respectively. Only quasi-banks with subsidiary 

financial allied undertakings (excluding insurance companies) which under existing regulations 

are required to prepare consolidated statements of condition on a line-by-line basis shall be 

required to submit report on consolidated basis. The abovementioned reports shall be classified 

as Category A-2 reports.î 

ß4116Q.5 Sanctions. Whenever the capital accounts of a quasi-bank are deficient 

with respect to the prescribed capital adequacy ratio, the Monetary Board after considering 

a report of the appropriate supervising and examining department of the BSP on the state of 

solvency of the institution concerned, shall limit or prohibit the distribution of the net profits 

and shall require that part or all of net profits be used to increase the capital accounts of the 

quasi-bank until the minimum requirement has been met. The Monetary Board may restrict 

or prohibit the making of new investments of any sort by the quasi-bank, with the exception of 

purchases of readily marketable evidences of indebtedness issued by the Philippine national 

government and BSP included in Item a(2)i of Subsec. 4116Q.2, until the minimum requirement 

capital ratio has been restored.î 

ß4116Q.6 Temporary Relief. In case of a quasi-bank merger, or consolidation, or 

when a quasi-bank is under rehabilitation under a program approved by the BSP, the Monetary 

Board may temporarily relieve the surviving quasi-bank, consolidated quasi-bank, or 

constituent quasi-bank or corporations under rehabilitation from full compliance with the 

required capital ratio for a maximum period of one (1) year.î 

This Circular shall take effect on 1 January 2004. Quasi-banks shall, however, be 

required to submit trial reports using the new report format commencing with the end-September 

2003 report until the effectivity of this Circular. 

Adopted: 1 Sept. 2003 



Governor 

--o0o-- 


Non-Life Insurance Products of Banks


Pursuant to Monetary Board Resolution No. 1112 dated 07 August 2003, allowing motor 

car insurance among the non-life insurance products which banks may market/cross-sell, 

Section 1631.a.(2)(b) of the Manual of Regulations for Banks as introduced by Circular No. 

357 dated 08 November 2002, is hereby amended to read as follows: 

ìSec. 1631 Financial Products of Allied Undertakings or Investment House 

Units of Banks. 

x x x 

a. Financial products covered by this Section are the following: 

1) x x x 

2) Insurance products limited to: 

x x x 

b) Non-life insurance 

1. Fire insurance 

2. Marine cargo policies 

3. Homeownersí policies 

4. Directors/officers liability insurance 

5. Motor Vehicle insurance 

3) x x x 


the Official Gazette or in a newspaper of general circulation. 




Governor 

--o0o-- 


Revised Guidelines on the Flotation of Bonds by Local 

Government Units (LGUs) [Without National Government Guarantee] 

Pursuant to Monetary Board Resolution No. 1151 dated August 14, 2003, the following 

guidelines shall govern the flotation of bonds by local government units (LGUs) under Republic 

Act (R.A.) No. 7160 (Local Government Code of 1991) and Republic Act (RA) No. 7653 

(New Central Bank Act) dated 3 July 1993. 

I. Legal Basis

1192 


A. UNDER THE LOCAL GOVERNMENT CODE OF 1991 (R.A. NO. 7160) 

ìSec. 299. Bonds and Other Long-Term Securities. Subject to the rules and 

regulations of the Central Bank and the Securities and Exchange Commission, 

provinces, cities, and municipalities, are hereby authorized to issue bonds, debentures, 

securities, collaterals, notes and other obligations to finance self-liquidating, 

income-producing development or livelihood projects pursuant to the priorities 

established in the approved local development plan or the public investment 

program. The Sanggunian concerned shall, through an ordinance approved by a 

majority of all its members, declare and state the terms and conditions of the 

bonds and the purpose for which the proposed indebtedness is to be incurred.î 

B. UNDER THE NEW CENTRAL BANK ACT (R.A. NO. 7653) 

ìSection 123. Financial Advice on Official Credit Operations. - Before undertaking 

any credit operation abroad, the Government, through the Secretary of Finance, shall 

request the opinion, in writing, of the Monetary Board on the monetary implications of the 

contemplated action. Such opinions must similarly be requested by all political subdivisions 

and instrumentalities of the Government before any credit operation abroad is undertaken by 


ìThe opinion of the Monetary Board shall be on the gold and foreign exchange resources 

and obligations of the nation and on the effects of the proposed operation on the 

balance of payments and on monetary aggregates. 

ìWhenever the Government, or any of its political subdivisions or instrumentalities, 

contemplates borrowing within the Philippines, the prior opinion of the Monetary Board shall 

likewise be requested in order that the Board may render an opinion on the probable effects 

of the proposed operation on monetary aggregates, the price level, and the balance of 

payments.î 

II. Coverage 

This Circular shall govern the issuance of bonds by provinces, cities, and municipalities 

which do not carry the guarantee of the National Government. The LGUs concerned are 

advised to observe the existing rules and regulations of other government agencies (Department 

of Finance, Securities and Exchange Commission) relating to LGU bond flotation. 

A. Manner of Request 

III. Procedures and Documentary Requirements 

An LGU proposal to issue bonds shall be submitted to the Bangko Sentral ng Pilipinas 

(BSP), through the Secretary of Finance with a formal request for the Monetary Boardís 

opinion on the probable effects of the proposed operation on monetary aggregates, the price 

level, and the balance of payments. 

B. Documentary Requirements


The proposal shall be accompanied by the following documents: 

1. An original copy (or a certified true copy) of the ordinance duly signed by the 

appropriate officers pursuant to the Local Government Code. In accordance with the Local 

Government Code, the ordinance authorizing the bond flotation should: 

a. state the specific purpose/project(s) for which the proposed indebtednes is to 

be incurred; 

b. certify that the project(s) to be financed by the bond flotation is/are a selfliquidating, 

income-producing development or livelihood project/s pursuant to the 

priorities established in the approved local development program or the public 

investment program; 

c. state the terms and conditions of the bond flotation, including sinking fund or 

other funding arrangements; and 

2. A copy of the resolution designating the LGU representative, including the specific 

acts/services that the representative has been authorized to perform. 

3. A waiver letter on the confidentiality of information (Annex 1*) under Sections 2 and 

3 of Republic Act No. 1405, as amended, authorizing all banks and financial institutions 

under the supervision of the BSP and which have transactions with the concerned LGU to 

disclose to the BSP all information pertaining to the deposits, investments, loans and other 

transactions of the concerned LGU (including the history or status of the LGUís dealings 

with said banks and financial institutions); the waiver letter should be duly executed by the 

mayor or governor as the case may be. 

4. A Department of Finance (DOF) certification that the debt service and borrowing 

capacity of the proponent LGU satisfies the legal requirements for a bond issue. 

C. Monetary Board Opinion 

1. Upon submission of all the above requirements, including other additional data or 

information it may deem necessary in the issuance of its opinion, and if the same are found 

to be in order, the Monetary Board shall, within a reasonable period of time, render an 

opinion on the probable effects of the proposed indebtedness on monetary aggregates, the 

price level, and the balance of payments. 

2. The opinion of the Monetary Board shall be forwarded to the concerned LGU through 

the DOF. 

3. The opinion of the Monetary Board does not constitute an endorsement by the BSP 

of the project since it is limited to the assessment of the monetary implications of the bond 

flotation. The said opinion is based on: (a) the information contained in the documents 


Quezon City

1194 


submitted by the LGU; and (b) the assumption that the proceeds of the bond flotation will 

actually be used for the intended projects described in the documents submitted. Hence, 

investors shall be responsible for assessing the quality of the bonds in terms of risks and 

returns. 

D. Post-Issuance Reports 

The LGU or its representatives or its trustee bank, as the case may be, shall submit to 

the BSP a post flotation report (Annex 2*) that will indicate the actual amount of the issue as 

well as the final terms and conditions of the issue within 30 days from the date of the flotation; 

and such other reports as may be required by the BSP. 

IV. Sanctions 

Any violation of this Circular shall be subject to the sanctions provided under Sections 

36 and 37 of Republic Act No. 7653. 

V. Repealing Clause 

All BSP regulations or issuances or any provision thereof that may be inconsistent with 

the provisions of this Circular, including Circular No. 41, dated August 29, 1994, are hereby 

repealed and superseded accordingly. 

VI. Effectivity 

This Circular shall take effect fifteen (15) days after its publication in two (2) newspapers 

of general circulation. 




Governor 

--o0o-- 


Foreign Bank Which Has More Than One (1) 

Branch and/or Other Office in the Philippines 

The Monetary Board in its Resolution No. 1121 dated 7 August 2003 has clarified that 

in the case of a foreign bank which has more than one (1) branch and/or other office in the 

Philippines, all such branches/offices shall be treated as one unit and all references to the 

Philippine branches/offices of such foreign bank shall be held to refer to such unit pursuant 


Quezon City.


to Section 74 of the General Banking Law of 2000. 

Please be guided accordingly. 





--o0o-- 


Clarification of Section 44 of CB Circular No. 1389 dated April 13, 1993, 

As Amended, on Outward Investments by Philippine Residents 

Pursuant to Monetary Board Resolution No. 1154 dated August 14, 2003, subject Section 

44 is clarified so as to exclude in the coverage of eligible outward investments, foreign 

currency-denominated bonds/notes of the Republic of the Philippines (ROP) or other Philippine 

entities, whether issued onshore or offshore, that are acquired by Philippine residents 

and, therefore, may not be funded with foreign exchange (FX) sourced from the Philippine 

banking system and bank-affiliated FX corporations, via spot purchases, derivatives transactions 

or any other means. 




Governor 

--o0o-- 

Memorandum 

Effectivity of BSP Circular No. 392 dated 23 July 2003 

Pursuant to Monetary Board Resolution No. 1196 dated 21 August 2003, the effectivity 

of BSP Circular No. 392 dated 23 July 2003 is hereby deferred to 1 January 2004. 

This Memorandum shall take effect immediately. 



Governor

1196 



--o0o-- 

Memorandum 

Transfer of Voting Shares of Stocks in Banks 

It has been noted that some banks do not seek the approval of the Bangko Sentral on 

the transfer of shares. Please be reminded of the following provisions of the Manual of 

Regulations for banks involving transfer of shares. 

ß X126.2 Transfer of shares. The following regulations shall govern transfer of 

voting shares of stocks in banks: 

xxx xxx xxx 

c. Transfer requiring prior Monetary Board approval. 

(1) Prior approval of the Monetary Board shall be required on the following: 

a. Any sale or transfer or series of sales or transfers which will result in ownership 

or control of more than twenty percent (20%) of the voting stock of bank by 

any person whether natural or juridical or which will enable such person to 

elect, or be selected as, a director of such bank; and 

b. Any sale or transfer or series of sales or transfers which will effect a change in 

the majority ownership or control of the voting stock of the bank from one (1) 

group of person to another group: Provided, That in no case shall such sale or 

transfer be approved unless the bank concerned shall immediately comply with 

the prescribed minimum capital requirement for new banks, notwithstanding any 

approved capital build-up program. 

xxx xxx xxx 

3) Sanctions. Any violation of the provisions under Items ìC(1) (a)î and ì(b)î 

above shall be subject to the sanctions prescribed under Sections 36 and 37 of 

R.A. No. 7653, without prejudice to the appropriate legal actions for the rescission 

and invalidation of the sale or transfer.î (as amended by Circular No. 

309 dated November 16, 2001 and 332 dated May 13, 2002) 

(all underscoring supplied) 

Banks are reminded that the Bangko Sentral will recognize only stockholders who 

acquire their shares in compliance with Bangko Sentral regulations and those directors and 

officers who were duly elected and appointed in accordance with their by-laws. Since 

directors are required to hold-over their positions until their successors are duly qualified in 

accordance with the by-laws, any abandonment of responsibilities may be subject to sanctions 

by the Bangko Sentral. 

The Corporate Secretary is also reminded of his duties under Subsection X126.2b 

involving shares of stock and the submission of appropriate reports thereon, including the


Consolidated List of Stockholders and their Stockholdings. Sanctions will also be imposed on 

the corporate secretary who records the unauthorized transfer or who fails to reverse the 

unauthorized transaction in the corporate books. 

For guidance and compliance. 





--o0o-- 


Amendments to Circular No. 280 dated 29 March 2001 

and Circular No. 360 dated 3 December 2002 

Pursuant to the Monetary Board Resolution No. 1195 dated 21 August 2003, approving 

the amendments to (a) Circular No. 280 dated 29 March 2001, as amended, on the guidelines 

on the adoption of the risk-based capital adequacy framework; and (b) Circular No. 

360 dated 3 December 2002 on the guidelines to incorporate market risk in the risk-based 

capital adequacy framework, the provisions of the Manual of Regulations for Banks are 

hereby amended, as follows: 

1. Subsection X116.2 of the Manual is hereby amended to expand the coverage of on 

balance sheet assets that are assigned 20 percent risk weight and 50 percent risk weight, as 

follows: 

20% risk weight 

x x x 

(8) Claims on Philippine incorporated banks, which claims obtain and maintain 

credit ratings of at least equal to that of the Philippine national government from a 

BSP recognized international credit rating agency. 

x x x 


x x x 

(4) Claims on Philippine incorporated banks, which claims obtain and maintain 

credit ratings of not more than one notch lower than that of the Philippine national 

government from a BSP recognized international credit rating agency. 

2. Subsection X116.5 of the Manual is hereby amended to impose 2 percent and 5 

percent (in lieu of 10 percent) specific market risk capital charge on trading book debt

1198 


securities issued by Philippine incorporated banks, which debt securities obtain and maintain 

credit ratings of at least equal to and not more than one notch lower than that of the 

Philippine national government, respectively, from a BSP recognized international credit 

rating agency. 

Accordingly, Item 29 (for universal banks and commercial banks with expanded derivatives 

authority) and Item 26 (for universal banks and commercial banks without expanded 

derivatives authority) of the Instructions for Accomplishing the Report on Computation of the 

Adjusted Risk-Based Capital Adequacy Ratio Covering Combined Credit Risk and Market 

Risk, are hereby amended, to wit: 

ìThe unadjusted specific risk charge is graduated into seven broad categories by 

types of issuer, as follows: 

Government and multilateral 

development banks* 0.00% 

Qualifying ** 0.25% (residual maturity of 6 months or less) 

1.00% (residual maturity of over 6 months to 

24 months) 

1.60% (residual maturity of over 24 months) 

Debt securities issued by Phil. 

incorporated banks, which have 

credit ratings of at least equal to 

that of the Phil. National 

Government 1.60% 

LGU bonds *** and debt securities 

issued by Phil. incorporated banks, 

which have credit ratings of not 

more than one notch lower than 

that of the Phil. national government 4.00% 

Others 8.00% 

* ìGovernment and multilateral development banksî refers to the issuers as described under 

Items 1.1 to 1.3 in Part 1.1 of the Report. 

** ìQualifyingî refers to the issuers/issues as described under items 1.4 to 1.7 in part 1.1 of 

the Report. 

*** ìLGU bondsî refers to bonds issued by local government units (LGUs), covered by 

Deed of Assignment of Internal Revenue Allotment of the LGU and guaranteed by LGU 

Guarantee Corporation.î 

The revised Part II of the prescribed report forms on the Computation of the Risk- 

Based Capital Adequacy Ratio Covering Credit Risk, incorporating the abovementioned 

amendments to Circular No. 280, are attached as Annex ìAî* (for universal banks, commercial 

banks and thrift banks) and Annex ìA-1î* (for rural banks and cooperative banks). The 


Diliman, Quezon City.


revised Part 1.1 of the prescribed report forms on the Computation of the Adjusted Risk- 

Based Capital Adequacy Ratio Covering Combined Credit Risk and Market Risk, incorporating 

the abovementioned amendments to Circular No. 360, is attached as Annex îBî* (for 

universal banks and commercial banks). 

This Circular shal take effect fifteen (15) days after its publication either in the Official 





Governor 

--o0o-- 


Rules and Regulations to Govern the Recognition and 

Derecognition of Domestic Credit Rating Agencies for Bank 

Pursuant to Monetary Board Resolution No. 1257, dated 28 August 2003, the following 

rules and regulations shall govern the recognition and derecognition of domestic credit rating 

agencies for bank supervisory purposes: 

SECTION 1. Statement of Policy - The introduction in the financial market of new and 

innovative products create increasing demand for and reliance on credit rating agencies 

(CRAs) by the industry players and regulators as well. As a matter of policy, the Bangko 

Sentral ng Pilipinas (BSP) wants to ensure that the reliance on credit ratings is not misplaced. 

Towards this end, the following rules and regulations that shall govern the recognition/derecognition 

of domestic CRAs for bank supervisory purposes are hereby prescribed: 

SECTION 2. Minimum Eligibility Criteria - Only ratings issued by CRAs recognized by 

the BSP shall be considered for BSP bank supervisory purposes. The BSP, through the 

Monetary Board, may officially recognize a credit rating agency upon satisfaction of the 

following requirements: 

A. Organizational Structure 

1. A domestic CRA must be a duly registered company under the Securities and Exchange 

Commission (SEC); and 

2. A domestic CRA must have at least five (5) years track record in the issuance of reliable 

and credible ratings. In the case of new entrants, a probationary status may be granted: 

Provided, That the CRA employs professional analytical staff with experience in the credit 

rating business. 

B. Resources

1200 

Human Resources 


1. The size and quality of the CRAís professional analytical staff must have the capability to 

thoroughly and competently evaluate the assessed/rated entityís creditworthiness; 

2. The size of the CRAís professional analytical staff must be sufficient to allow substantial 

on-going contact with senior management and operational levels of assessed/rated entities 

as a routine component of the surveillance process; 

3. The CRA shall establish a Rating Committee composed of adequately qualified and knowledgeable 

individuals in the rating business, majority of whom must have at least five (5) years 

experience in credit rating business; 

4. The directors of the CRA must possess a high degree of competency equipped with the 

appropriate education and relevant experience in the rating business; 

5. The directors, officers, members of the rating committee and professional anlytical staff of 

the CRA have not at any time been convicted of any offense involving moral turpitude or 

violation of the Securities Regulation Code; and 

6. The directors, officers, members of the rating committee and professional analytical staff 

of the CRA are not currently involved as a defendant in any litigation connected with violations 

of the Securities Regulation Code nor included in the BSP watchlist. 

Financial Resources 

1. The CRA must have the financial capability to invest in the necessary techonological 

infrastructure to ensure speedy acquisition and processing of data/information and timely 

release of reliable and credible ratings; and 

2. The CRA must have financial independence that will allow it to operate free from economic 

and political pressures. 

C. Objectivity 

1. The CRA must use a rigorous and systematic assessment methodology that have been 

established for at least one year; however, a three-year period is preferable; 

2. The assessment methodology of the CRA must be based both on qualitative and quantitative 

approaches; and 

3. The CRA must use an assessment methodology that is subject to on-going review and is 

responsive to changes in the operations of assessed/rated entities. 

D. Independence 

1. The CRA must be free from control of and undue influence by the entities it assesses/ 

rates; 

2. The assessment process must be free from ownership pressures to allow management to


exercise independent professional judgment; 

3. Persons directly involved in the assessment process of the CRA are free from conflicts of 

interest with assessed/rated entities, and 

4. The CRA does not assess/rate an associate entity. 

E. Transparency 

1. A general statement of the assessment methodology used by the CRA should be publicly 

available; 

2. The CRA shall disseminate to the public thru a well-circularized publication, all assigned 

ratings disclosing whether the rating issued is solicited or unsolicited; 

3. Tha rationale of ratings issued and risk factors considered in the assessment should be 

made available to the public; 

4. The ratings issued by the CRA should be available both to domestic and foreign institutions 

with legitimate interest; and 

5. Publication of changes in ratings together with the basis for the change should be done on 

a timely basis. 

F. Disclosure Requirements 

Qualitative Disclosures 

1. Definition of ratings along with corresponding symbols; 

2. Definition of what constitutes a default, time horizon within which a default is considered 

and measure of loss given a default; and 

3. Material changes within the CRA (i.e., changes in management or organizational structure, 

rating personnel, modifications of rating practices, financial deterioration) that may 

affect its ability to provide reliable and credible ratings. 

Quantitative Disclosures 

1. Actual default rates experienced in each rating category; and 

2. Rating transitions of assessed/rated entities over time (i.e., likelihood of an AAA credit 

rating transiting to AA etc. over time). 

G. Credibility 

1. The CRA must have a general reputation of high standards of integrity and fairness in 

dealing with its clients and conducts its business in an ethical manner; 

2. The CRA is generally accepted by predominant users in the market (i.e., issuers, investors, 

bankers, financial institutions, securities traders); and

1202 


3. The CRA must carry out its rating activities with due diligence to ensure ratings are fair 

and appropriate. 

For purposes of this circular, a subsidiary refers to a corporation, more than fifty 

percent (50%) of the voting stock of which is owned or controlled directly or indirectly by 

the CRA while an affiliate refers to a corporation, not more than fifty percent (50%) but not 

less than ten percent (10%) of the voting stock of which is owned or controlled directly or 

indirectly by the CRA. 

ìControlî exists when the parent owns directly or indirectly through subsidiaries 

more than one half of the voting power of an enterprise unless, in exceptional circumstance, 

it can be clearly demonstrated that such ownership does not constitute control. 

Control may also exist even when ownership is one half or less of the voting power of an 

enterprise when there is: 

1. power over more than one half of the voting rights by virtue of an agreement with other 

stockholders; 

2. power to govern the financial and operating policies of the enterprise under a statute or 

an agreement; 

3. power to appoint or remove the majority of the members of the board of directors or 

equivalent governing body; 

4. power to cast the majority votes at meetings of the board directors or equivalent governing 

body; or 

5. any other arrangement similar to any of the above. 

H. Internal Compliance Procedures 

1. The CRA must have the necessary internal procedures to prevent misuse or unauthorized 

disclosure of confidential/non-public information; and 

2. The CRA must have rules and regulations that prevent insider trading and other conflict of 

interest situations. 

SECTION 3. Pre-qualification Requirements - The application of a domestic CRA for 

BSP recognition shall be submitted to the Supervision and Examination Sector (SES) of the 

BSP together with the following information/documents: 

A. An undertaking: 

1. That the CRA shall comply with regulations, directives and instructions which the BSP or 

other regulatory agency/body may issue from time to time; and 

2. That the CRA shall notify the BSP in writing of any material changes within the organization 

(i.e., changes in management or organizational structure, rating personnel, modifications 

of its rating practices, financial deterioration) that may affect its ability to provide


reliable and credible ratings. 

B. Other documents/information: 

1. Brief history of the CRA, major rating activities handled including information on the name 

of the client, type of instruments rated, size and year of issue; 

2. Audited financial statements for the past three (3) years and such other information as 

the Monetary Board may consider necessary for selection purposes; 

3. For new entrants, employment of professional analytical staff with experience in the credit 

rating business; 

4. List of major stockholders/partners (owning at least 10%) of the voting stocks of the CRA 

directly or along with relatives within the 1st degree of consanguinity or affinity; 

5. List of directors, officers, members, of the rating committee and professional analytical 

staff of the CRA; including their qualifications, experience related to rating activities, directorship 

and shareholdings in the CRA and in other companies, if any; 

6. List of subsidiaries and affiliates including their line of business and the nature of interest 

of the CRA in these companies; 

7. Details of the denial of a previous request for recognition, if any (i.e., application date, 

date of denial, reason for denial etc.); and 

8. Details of all settled and pending litigations connected with the securities market against 

the CRA, its directors, officers, stockholders, members of the rating committee and professional 

analytical staff, if any. 

SECTION 4. Inclusion in BSP List - The BSP will regularly circularize to all banks and 

non-bank financial institutions an updated list of recognized CRAs. The BSP, however, shall 

not be liable for any damage or loss that may arise from its recognition of CRAs to be 

engaged by users. 

SECTION 5. Derecognition of Credit Rating Agencies - 

A. Grounds for Derecognition - Credit rating agencies may be derecognized from the list 

of BSP recognized CRAs under the following circumstances: 

1. Failure to maintain compliance with the requirements under Section 2 hereof or any 

willfull misrepresentation in the information/documents required under Section 3 hereof; 

2. Involvement in illegal activities such as ratings blackmail; creation of a false market or 

insider trading; divulging any confidential information about a client without prior consent to a 

third party without legitimate interest; indulging in unfair competition (i.e., luring clients of 

another rating agency by assuring higher ratings etc.); and 

3. Any violations of applicable laws, rules and regulations. 

B. Procedure for Derecognition

1204 


A CRA shall only be derecognized upon prior notice and after being given the opportunity 

to defend itself. 

SECTION 6. Effectivity - This Circular shall take effect after fifteen (15) days following 

its publication either in the Official Gazette or in any newspaper of general circulation. 




Governor 

--o0o-- 


Amendments on the Guidelines for Consolidation of Financial Statements 

of Banks and Other Subsidiaries Engaged in Financial Allied Undertakings 

Pursuant to Monetary Board Resolution No. 1243 dated 28 August 2003, the Manual of 

Regulations for Banks (MORB) is hereby amended as follows: 

SECTION 1. Item A.4(b) of Appendix 9 (Guidelines for Consolidation of Financial 

Statements of Banks and their Subsidiaries Engaged in Financial Allied Undertakings) of the 

Manual of Regulations for Banks is hereby amended to read as follows: 

A. Definitions 

x x x 

4. Affiliate refers to an entity linked directly or indirectly to a bank by means of: 

x x x 

(b) Interlocking directorship or officership, except in cases involving independent 

directors as defined under existing regulations; 

x x x 

SECTION 2. The aforementioned definition of ìAffiliateî is hereby adopted for purposes 

of Subsections X162.12, X233.9, X 602.2 of the MORB, Circular No. 388 dated May 

26, 2003 and for other purposes except where the provision of the regulation expressly 

states otherwise. 


the Official Gazette or in a newspaper of general circulation.



BUREAU OF CUSTOMS 






Customs Memorandum Order No. 12-2003 

Processing/Issuance/Application of TCCs 

in Tax/Duty Payments, TCC Cases 


U.P. Law Complex, Diliman, Quezon City. 

--o0o-- 


Validation of Transferred TCCs and Authorization to Purchase TCCs 


U.P. Law Complex, Diliman, Quezon City.*Text Available at Office 

of the National Administrative Register, U.P. Law Complex, Diliman, Quezon City. 



--o0o--- 


Abolishing the Warrant and Motor Vehicle Unit (WMVU), Establishing 

the Vehicle Importation Compliance Monitoring Unit (VICMU), Defining its 

Powers and Functions and Streamlining Its Processes in the Light 

of the Post Entry Audit Environment and For Other Purposes

1206 









(SGD.) ANTONIO M. BERNARDO 

Commissioner 

--o0o-- 

Memorandum 

Authority of Representatives of the Office of the 

Commissioner to Witness Examination of Shipments 



--o0o-- 

Customs Memoramdum Order No. 17-2003 

Safeguard Duty on Importations of Gray Portland Cement 



--o0o-- 

Customs Administrative Order No. 3-2003 

Establishment, Operation and Control of Special 

Customs Bonded Conversion Facility 



--o0o--




Disposition of Seized and Forfeited Right-Hand Drive Vehicles 

Whereas, the Bureau of Customs has in its possession a number of Right-Hand Drive 

Vehicles (RHDs) that have been seized/forfeited pursuant to Republic Act No. 8506; 

Whereas, said seized/forfeited RHDs, although legally considered as contraband items, 

can be source of government revenues; 

Whereas, Section 2609(d) of the Tariff and Customs Code of the Philippines (TCCP) 

allows the sale of contrabands under certain conditions, to wit: (a) the contraband has 

commercial value; (b) it is capable of legitimate use; and (c) there is assurance that the use 

thereof is for legitimate use only; 

Whereas, the Department of Justice has issued Opinion No. 86-2002, dated 01 October 

2001, allowing the auction sale of RHDs noting that all the requisites prescribed under 

Sec. 2609(d) are present with respect to RHDs; 

Wherefore, in view of the foregoing, and by authority of Section 608 of the TCCP, the 

following rules and guidelines on the disposition of seized/forfeited RHDs are hereby promulgated: 

1.0 

Objectives 

1.1 To realize the commercial value of the seized/forfeited RHDs pursuant to Sec. 2609(d) of 

the TCCP; and 

1.2 To decongest the premises of all ports of all seized/forfeited RHDs. 

2.0 

Coverage 

This Order shall apply to RHDs seized/forfeited as of 31 July 2003. 

3.0 

General Provisions 

3.1 Seized/forfeited RHDs shall be sold in public auctions pursuant to Sec. 2609(d) of the 

TCCP. 

3.2 The general guidelines specified under CMO 5-2003 for the conduct of auction sales 

shall be strictly observed, with the following supplemental rules for auction sales involving 

RHDs: 

3.2.1 Expenses for the conversion of RHDs to Left-Hand Drive Vehicles (LHDs) 

shall be born by the winning bidder;

1208 


3.2.2 The advertisement for the auction sale of RHDs shall state clearly all requirements 

and restrictions; and 

3.2.3 RHDs for sale shall not be mixed with other items in one single lot. 

3.3 RHDs that have been successfully auctioned off shall be converted to LHDs. Solely for 

the purpose of converting RHDs into LHDs, a motor vehicle repair shop, duly accredited and 

authorized as such by the Department of Trade and Industry and by the Land Transportation 

Office, shall be established as a special customs bonded warehouse for a limited duration by 

the Bureau of Customs (BoC). 

3.4 RHDs found being operated on the streets shall be automatically seized/forfeited in favor 

of the government notwithstanding the fact that it was previously auctioned by the BoC. 

4.1 After Auction Sale 

4.0 

Specific Provisions 

4.1.1 After its successful auction, a RHD shall be transferred from the port premises 

straight to the special customs bonded warehouse established for the conversion 

of RHDs into LHDs, either with the use of a tow truck or by loading the 

same onto a truck. The transfer of a RHD to such facility on its own automotive 

power is strictly prohibited. 

4.1.2 The transfer of any RHD vehicle to such conversion facility shall be done 

upon approval by the Commissioner of Customs and shall be continuously 

underguarded by a Customs Guard. 

4.2 After Conversion of RHD to LHD 

4.2.1 The conversion facility shall issue a Certificate of Conversion, in the form to 

be prescribed by the BoC, under oath, certifying to the fact of conversion. 

4.2.2 The LTO-Motor Vehicle Inspection Service shall certify to the roadworthiness 

of the subject vehicle. 

4.2.3 The Chief, Auction and Cargo Disposal Division (ACDD), or his/her equivalent 

unit shall assign an examiner who shall confirm the fact of conversion and 

thereafter shall submit a report on his/her examination, supported with pictures of 

the converted vehicle. 

4.2.4 When all of the above requirements are fully complied with, the District 

Director, in whose jurisdiction the converted vehicle was sold, shall issue the 

corresponding release/clearance order to the accredited conversion facility. 

4.2.5 No BoC Certificate of Payment shall be issued and transmitted to the LTO 

unless and until such time all the above requirements under paragraphs 4.2.1 - 

4.2.4 shall have been strictly complied with.


4.3 In cases of RHDs that remain unsold after two failed biddings - whether for lack of 

qualified bidders or acceptable bids - the Commissioner of Customs may order its use by the 

Bureau for purposes of revenue collection, or for fighting smuggling or other fraud against 

the government; or for the official use of another national agency; or for donation to a 

government charitable institution, through the Department of Social Welfare and Development, 

pursuant to Sec. 2610 of the TCCP, subject to the above process, conditions and/or 

requirements for the conversion of RHDs to LHDs. 

5.0 

Accountability Clause 

It shall be the responsibility of the Chief, ACDD or its equivalent unit in the respective 

ports, to ensure that the RHDs sold under its jurisdiction are properly converted to LHDs 

before the Certificate of Payment is released. 

Parties entrusted/involved, directly or indirectly, with/in the conversion of RHDs to LHDs, 

shall be meted the appropriate penalties prescribed under the TCCP and applicable customs 

rules and regulations for the loss or illegal withdrawal of a RHD/converted vehicle from 

Customs custody. 

6.0 

Effectivity 

This Order shall take effect immediately. 




Commissioner 

--o0o-- 


Summary Seizure Proceedings for Tax Deficient Imported 

Motor Vehicles Offered for Voluntary Payment 

I.0 

Objectives 

1.1. To collect the unpaid duties, taxes and fees due on imported motor vehicles. 

1.2 To legalize the ownership/possession of motor vehicles with tax deficiencies and/or acquired 

under defective LTO registration titles; and 

1.3 To encourage the owners to come out voluntarily and pay their tax deficiencies without 

any fine or penalty through the institution of constructive seizure proceedings which shall be 

summary in nature in accordance with Sections 608 and 2316 of the Tariff and Customs 

Code of the Philippines (TCCP).

1210 


2.0 

Coverage 

2.1 This Order shall cover all imported motor vehicles, including but not limited to motorcycles 

and scooters, with year model 2002 and below and which arrived on or before 31 

December 2002, whether registered with the Land Transportation Office (LTO) or not, which 

have not paid proper duties and taxes, and when the owner/possessor thereof voluntarily 

offers to pay the said duties and taxes; 

2.2 This Order shall likewise be applicable to vehicles originally imported by tax-exempted 

persons/entities under various tax exemption laws and subsequently sold/transferred/conveyed 

to a non-tax exemption persons/entities without the payment of proper duties, taxes 

and fees; and 

2.3 This Order shall similarly cover motor vehicles that were locally assembled or re-assembled 

using untaxed imported vehicle component parts. 

3.0 

Administrative Provisions 

3.1 The motor vehicle shall be constructively seized and a Warrant of Seizure and Detention 

(WSD) shall be issued under Section 2301 of the TCCP, as amended, a compromise is 

deemed instituted pursuant to Section 2316 of the same Code; and 

3.2 The seizure proceedings shall be summary in nature and shall not require full-blown 

hearings as in regular seizure/forfeiture proceedings: Provided, however, that the owners of 

these vehicles shall comply with the provisions herein and pay the deficiency duties, duties 

and fees assessed pursuant hereto; Provided, finally, that the District Collector concerned 

shall, after review of the findings made by the duly assigned examiner/appraiser, sign the 

Decision/Order recommending the acceptance of the Offer of Compromise. 

4.0 

Summary Proceedings 

4.1 The owner/applicant shall file with the District/Port Collector, a sworn written application 

(Annex A*) offering to pay the deficiency duties, taxes and fees; 

4.2 Upon receipt of the written application form the owner/applicant, the District/Port Collector 

shall forthwith issue a WSD (Annex B*) against the subject motor vehicle. 

4.3 Upon receipt by the owner/applicant of the WSD, he shall file an informal entry with the 

Portís appropriate unit; 

4.4 Upon the filing of the informal entry, the District/Port Collector shall assign an examiner/ 

appraiser to examine/appraise the vehicle, take the stencil of the chassis and engine numbers 

and assess the proper duties, taxes and fees in accordance with the following: 

4.4.1 Appraisal of the vehicle shall be in compliance with the pertinent provisions 

of the TCCP, as amended, and other relevant rules and regulations; and 


Quezon City


4.4.2 The rate of exchange, duty, ad valorem and Value-added Tax (VAT) shall be 

assessed and computed in accordance with applicable rules and regulations. 

4.5 The assigned Principal Appraiser shall review the findings and assessment made and 

shall thereafter forward the same to the District/Port Collector who shall submit his recommendation 

to the Office of the Commissioner through the Vehicle Importation Compliance 

Monitoring Unit (VICMU). If the recommendation is favorable, the District/Port Collector shall 

sign the Decision/Order (Annex C*) recommending the acceptance of the Offer of Settlement 

and the lifting of the WSD over the vehicle. 

4.6 The VICMU shall review the findings and recommendation in accordance with Customs 

Memorandum Order No. 15-2003. After its review, the VICMU shall then forward the application, 

together with its recommendation, to the Commissioner for approval; 

4.7 Upon approval by the Commissioner, the applicant shall pay the proper duties, taxes and 

fees, but without any fine or penalty which is deemed waived; and 

4.8 After payment of the duties, taxes and fees, a Certificate of Payment (CP) shall be 

issued by the Cashier and copy thereof transmitted to the LTO through the VICMU. 

5.0 

Repealing Clause 

All issuances inconsistent with this Order are hereby deemed repealed or modified 

accordingly. 

6.0 

Effectivity Clause 

This Order shall take effect immediately and up to the close of office hours on 30 

November 2003. 

After the expiration of this Order, tax deficient imported motor vehicles will be subjected 

to the usual seizure/forfeiture proceedings. 



Commissioner 

Approved: 

(SGD.) JOSE ISIDRO N. CAMACHO 

Secretary 

--o0o-- 


Quezon City

1212 




Amendments to Sec. 1V, CMO 5-2003 re Setting of Floor Prices 

Pursuant to Sec. 608 of the TCCP, as amended, and in the exercise of the inherent 

powers of the Bureau of Customs under Sec. 602 of the same Code, CMO 5-2003 on the 

ìRULES AND REGULATIONS IN THE DISPOSITION OF GOODS BY PUBLIC AUCTION/ 

NEGOTIATED SALEî, dated 17 March 2003, specifically, Sec. IV, paragraph A thereof, is 

hereby amended as follows: 

IV - OPERATIONAL PROVISIONS 

A. Setting the Floor Price 

Articles subject to sale at public auction shall be sold at a price not less than the 

wholesale value or price in the domestic market of same, like or similar articles in 

the usual wholesale quantities and in the ordinary course of trade, as may be 

determined by the concerned examiners/appraisers, subject to the approval of 

the Chief, ACDD or equivalent unit, in sequential order as follows: 

1. The price at which the same, like or similar item was sold/bought in a public 

auction/negotiated sale conducted/held not more than three (3) months ago; 

2. The price at which the same, like or similar item was sold/bought in a public 

auction/negotiated sale conducted/held not more than six (6) months ago. 

3. The amount arrived at by computing the total landed cost based on the VRIS 

value of same, like, similar items plus taxes and twenty-five percent mark-up; or 

4. In the absence of a VRIS value, the price/amount arrived at through any of the 

following methods -- 

4.1 the average of at least three canvassed domestic wholesale prices; 

4.2 the domestic wholesale price arrived at through backward computation 

using as basis the average of the three canvassed retail prices; 

4.3 the price recommended by the concerned industry sector. 

CMO 5-2003 is hereby modified accordingly. 

Effective immediately. 



Commissioner 

--o0o--




Implementing CAO No. 5-2003 the Summary Seizure Proceedings for 

Tax Deficient Imported Motor Vehicles Offered for Voluntary Payment 

1. Objectives 

1.1 To implement the summary seizure proceedings for tax deficient imported vehicles as 

mandated under CAO No. 5-2003. 

1.2 To collect the unpaid duties, taxes and fees due on imported motor vehicles; 

1.3 To legalize the ownership/possession of motor vehicles with tax deficiencies and/or acquired 

under defective LTO registration titles; and 

1.4 To encourage the owners to come out voluntarily and pay their tax deficiencies without 

any fine or penalty through the institution of constructive seizure proceedings which shall be 

summary in nature in accordance with Sections 608 and 2316 of the Tariff and Customs 

Code of the Philippines (TCCP). 

2. Coverage 

2.1 This Order shall cover all imported motor vehicles, including but not limited to motorcycles 

and scooters, except those imported by participants of the Motor Vehicle Development 

Program, with year model 2002 and below and which arrived on or before 31 December 

2002, whether registered with the Land Transportation Office (LTO) or not, which have 

not paid proper duties and taxes, and when the owner/possessor thereof voluntarily offers 

to pay the said duties and taxes; 

2.2 This Order shall likewise be applicable to vehicles originally imported by tax-exempted 

persons/entities under various tax exemption laws and subsequently sold/transferred/conveyed 

to a non-tax exemption persons/entities without the payment of proper duties, taxes 

and fees; and 

2.3 This Order shall similarly cover motor vehicles that were locally assembled or re-assembled 

using untaxed imported vehicle component parts. 

2.4 This Order shall not cover, however, carnapped vehicles, and those vehicles the importation 

which are prohibited or the release of which are contrary to law. 

3. Administrative Provisions 

3.1 The motor vehicle shall be constructively seized and a Warrant of Seizure and Detention 

(WSD) shall be issued under Section 2301 of the TCCP, as amended, and a compromise is 

deemed instituted pursuant to Section 2316 of the same Code; and



3.2 The seizure proceedings shall be summary in nature and shall not require full-blown 

hearings as in regular seizure/forfeiture proceedings; Provided, however, that the owners of 

these vehicles shall comply with the provisions herein and pay the deficiency duties, duties 

and fees assessed pursuant hereto; Provided, finally, that the District Collector concerned 

shall, after review of the findings made by the duly assigned examiner/appraiser, sign the 

Decision/Order recommending the acceptance of the Offer of Compromise. 

4. Summary Proceedings 

4.1 The owner/applicant shall file with the District/Port Collector, a sworn written application 

offering to pay the deficiency duties, taxes and fees; 

4.2 Together with his application form, the applicant shall also submit other documentary 

proof showing his ownership of the vehicle or the mode by which the same was acquired 

together with a Clearance from the PNP-Traffic Management Group which shows that the 

vehicle is not carnapped. 

4.3 Upon receipt of the written application from the owner/applicant, the District/Port Collector 

shall forthwith issue a WSD against the subject motor vehicle. 

4.4 Upon receipt by the owner/applicant of the WSD, he shall file an informal entry with the 

Portís appropriate unit; 

4.5 Upon the filing of the informal entry, the District/Port Collector shall assign an examiner/ 

appraiser to examine/appraise the vehicle, take the stencil of the chassis and engine numbers 

and assess the proper duties, taxes and fees in accordance with the following: 

4.5.1 Appraisal of the vehicle shall be in compliance with the pertinent provisions 

of the TCCP, as amended, and on existing valuation system at the time of payment 

and other relevant rules and regulations; and 

4.5.2 The rate of exchange, duty, ad valorem and Value-added Tax (VAT) shall be 

assessed and computed in accordance with applicable rules and regulations. 

4.6 The assigned Principal Appraiser shall review the findings and assessment made and 

shall thereafter forward the same to the District/Port Collector who shall submit his recommendation 

to the Office of the Commissioner through the Vehicle Importation Compliance 

Monitoring Unit (VICMU). If the recommendation is favorable, the District/Port Collector shall 

sign the Decision/Order recommending the acceptance of the Offer of Settlement and the 

lifting of the WSD over the vehicle. 

4.7 The VICMU shall review the findings and recommendation in accordance with Customs 

Memorandum Order No. 15-2003. After its review, the VICMU shall then forward the application, 

together with its recommendation, to the Commissioner for approval. 

4.8 Upon approval by the Commissioner, the applicant shall pay the proper duties, taxes and 

fees, but without any fine or penalty which is accordingly deemed waived, and shall be 

issued the corresponding Original receipt therefor; and, the VICMU personnel or personnel 

assigned by the District/Port Collector shall affix the Clearance/Security sticker at the upper


right hand corner of the vehicleís windshield or in cases of motorcycles/scooters at the 

visible portion of its gas tank; 

4.9 After payment of the duties, taxes and fees, a Certificate of Payment (CP) shall be 

issued by the Cashier and copy thereof transmitted to the LTO through the VICMU. 

5. Repealing Clause 

All issuances inconsistent with this Order are hereby deemed repealed or modified 

accordingly. 

6. Effectivity Clause 

This Order shall take effect immediately and up to the close of office hours on 30 

November 2003. 

After the expiration of this Order, tax deficient imported motor vehicles shall be seized 

and be subjected to regular seizure/forfeiture proceedings. 





Commissioner 

--o0o-- 


Amendments to CAO 02-2000 (Establishing the 

Super Green Lane Import Processing Facility) 




--o0o-- 


Establishment of Industry -Specific Customs Bonded 

Warehouse (ICBW) Servicing the Semiconductor and Electronics 

Industry and the Rules and Regulations Governing its Operations

1216 






--o0o-- 

Customs Special Order No. 19-2003 

Creation of a Permanent Intellectual Property Unit Pursuant to Section 2 

Paragraph E of Customs Administrative Order No. 6-2002 Also Known as the 

Customs Rules and Regulations Implementing the Provisions of Republic Act 

No. 8293 Thereby Superseding CSO No. 24-2002 Issued on September 27,2002 




BUREAU OF IMMIGRATION 


Memorandum Order No. ADD-03-017 

Requirements and Guidelines in the Processing of 

Special Work Permits (SWP) for Tour Guides, Dive Masters 

and/or Instructors, and Chefs in the Island of Boracay, Malay, Aklan 

WHEREAS, the Department of Tourism has declared Boracay Island as one of the 

major tourist attractions of the country; 

WHEREAS, as per report of Boracay Field Office, almost all commercial establishments 

in the area are being leased to or owned and operated by foreign nationals, pursuant 

to Section 3 (1) (d) of Republic Act No. 8762, otherwise known as the Retail Trade Liberalization 

Act of 2002, which states: 

SECTION 3. Definition 

1. ìRetail Tradeî shall mean any act, occupation or calling of habitually selling 

direct to the general public merchandise, commodities or goods for consumption, 

but the restrictions of this law shall not apply to the following:


x x x 

d. Sales in restaurant operations by a hotel owner or inn-keeper irrespective of 

the amount of capital: Provided, that the restaurant is incidental to the hotel 

business: 

WHEREAS, in line with the Visit RP 2003 program of the government, the Bureau has 

to provide a concrete policy and/or guidelines on the issuance of Special Work Permits 

(SWP) to those business establishments in the island of Boracay, Malay, Aklan which will 

engage on a temporary basis, the services of foreign nationals. 

WHEREFORE, for and in consideration of the foregoing premises, a Special Work 

Permit (SWP) shall be issued upon application under Commonwealth Act (C.A.) No. 613, 

subject to the following requirements: 

1. Letter request from the petitioner/employer 

2. Two (2) pieces recent 2 x 2 pictures 

3. Certified true copy of the applicantís passport with updated stay; 

4. Certified true copy of the Contract of Employment stating the duration and 

compensation; 

5. Affidavit of Support and Guarantee by the employer; 

6. SEC or DTI Registration of the Employer 

For tour guides, DOT Accreditation shall be an additional requirement. 

The SWP shall be signed by the Commissioner upon the recommendation of the Alien 

Control Officer (ACO) of Aklan and valid for a period of three (3) months which can be 

extended thrice or for a maximum period of one (1) year. Holders of valid SWP are hereby 

required to report to the Alien Control Officer every first Monday of the month to present 

himself and documents to prove the existence of business and his/her employment with the 

employer/petitioner. 


(SGD.) ANDREA D. DOMINGO 

Commissioner 

BUREAU OF INTERNAL REVENUE 


Revenue Regulations No. 19-2003 

Regulation to Defer the Implementation of the Provisions 

Prescribed by Revenue Regulations No. 4-2003 which Further 

Amended Certain Provisions of Revenue Regulations No. 14-97 

as Amended by Revenue Regulations No. 14-99

1218 


SECTION 1. Scope. Pursuant to the provisions of Section 244 in relation to Section 

245 of the National Internal Revenue Code of 1997 (Code), these Regulations are hereby 

promulgated to defer the implementation of the amendatory provisions introduced by Revenue 

Regulations No. 4-2003 amending Revenue Regulations No. 14-97, as amended by 

Revenue Regulations No. 14-99. 

SECTION 2. Deferment Clause - Section 3 of Revenue Regulations No. 8-2003, as 

last amended by Revenue Regulations 18-2003, is hereby further amended to read as 

follows: 

ìSEC. 3. DEFERMENT CLAUSE - In light of the passage by the Senate on 

second reading of the bill revising the excise tax system on motor vehicles and to 

allow ample time for the legislative process to be completed and pending the 

lifting of the writ of preliminary injunction issued in Civil Case No. Q03 - 48953 of 

the Regional Trial Court of Quezon City, Branch 222, the implementation of Revenue 

Regulations No. 4-2003 is hereby deferred until September 08, 2003. 

SECTION 3. Effectivity Clause - These Regulations shall take effect immediately upon 

approval hereof. 




Secretary of Finance 

--o0o-- 


Amending Certain Provisions of Revenue Regulations No. 18-99, 

As Amended by Revenue Regulations No. 12-2003, Implementing Section 5 

of Republic Act No. 8424, Otherwise Known as the Tax Reform Act of 1997, 

and Other Pertinent Provisions of the National Internal Revenue Code of 1997 

Imposing VAT on Services of Banks, Non-Bank Financial Intermediaries, 

and Finance Companies, beginning January 1, 2003 pursuant to Section 1 

of Republic Act No. 9010 

SECTION 1. Scope - Pursuant to the provisions of Section 244 in relation to Section 

108 and Section 106, on certain cases, of the National Internal Revenue Code of 1997, 

these Regulations are hereby promulgated to amend certain provisions of Revenue Regulations 

No. 18-99, as amended by Revenue Regulations No. 12-2003, governing the imposition 

of VAT on banks, non-bank financial intermediaries and finance companies in accordance 

with Section 5 of Republic Act No. 8424 which imposition was last deferred by Section 1 of 

Republic Act No. 9010. 

SECTION 2. Definition of Terms - Section 2 of Revenue Regulations No. 18-99, as 

amended by Revenue Regulations No. 12-2003, is hereby further amended by adding Subsections 

2.12, 2.13, and 2.14 to read as follows:


ìSECTION 2. Definition of Terms - For purposes of these Regulations, the terms 

enumerated hereunder shall have the following meaning: 

xxx xxx xxx 

2.12 Securities - shall include shares of stock in a corporation and rights 

to subscribe for or to receive such shares; and bonds, debentures, notes 

or certificates, or other evidence of indebtedness issued by any corporation, 

including those issued by the government, with interest coupons or in 

registered form. 

2.13 Government Securities - shall refer to securities issued by the Republic 

of the Philippines or any of its agencies, instrumentalities, and political 

subdivisions. 

2.14 Private Securities - shall refer to securities not covered by Subsection 

2.13 hereof. 

SECTION 3. Computation of Output Tax - Section 3 of Revenue Regulations No. 18- 

99, as amended by Revenue Regulations No. 12-2003, is hereby further amended by adding 

a new paragraph after Sub-section 3.7 to read as follows: 

ìSECTION 3. Computation of the Output Tax - 

3.1 xxx xxx xxx 

xxx xxx xxx 

3.7 xxx xxx xxx 

Provided, however, that with respect to income, including net trading gains, 

on government securities where the financial institution-lender/investor primarily liable 

for paying the VAT thereon does not pass-on or shift to the government-borrower 

part or whole of the output tax (output VAT) due, the recognizable income of 

the said financial institution-lender/investor shall be net of the output tax (output 

VAT) assumed or not shifted to the customer/client which will be remitted by the 

financial institution-lender/investor to the Bureau of Internal Revenue (BIR). On the 

other hand, any output VAT passed-on or shifted to the government-borrower shall 

be remitted directly by the government-borrower to the BIR in form of or as a withholding 

tax creditable against the value-added tax liability of the financial institutionlender/investor, 

as provided and allowed under Section 114 and Section 245 of the 

Tax Code of 1997. The creditable amount shall, nonetheless, be evidenced by a Certificate 

of Creditable Tax Withheld and Paid/Payable (BIR Form No. 2307) issued by 

the government-borrower. 

Provided, the payment by the financial institution-lender/investor of the assumed 

part of output tax (output VAT) shall be deemed payment by said financial institutionlender/investor 

of the VAT due from it on its interest income and net trading gains on

1220 


government securities, it being understood that it is the government-borrower/withholding 

agent which shall be liable to pay and remit to the BIR the output VAT passedon/shifted 

to and duly acknowledged by it, as evidenced by duly issued Certificate of 

Creditable Tax Withheld at Source, on said interest income and net trading gains. 

Provided, furthermore, that if the output tax (output VAT) on the income of the 

financial institution is wholly or partly assumed by the said financial institution, the 

amount of its recognizable income is always net of the output tax (output VAT) 

assumed and not passed-on to customers/clients. 

SECTION 4. Treatment of Output Tax Shifted to the Buyer of Services - Section 4 of 

Revenue Regulations No. 18-99, as amended by Revenue Regulations No. 12-2003, is hereby 

further amended to read as follows: 

ìSection 4. Treatment of the Output Tax Shifted to the Buyer of Services 

- In general, the payor of the income/fee who is a VAT-registered person shall be 

entitled to claim as input tax credit the output tax paid and passed-on by the 

financial institution. On the other hand, if the payor is not a VAT-registered person, 

the VAT passed-on by the payee shall form part of his cost. Provided, that a 

VAT receipt/invoice reflecting/showing separately the passed-on VAT shall be 

issued by the payee for all the received compensation for services rendered, or 

goods sold in certain cases, which shall be used as the evidence by the payor 

for the claim of input tax. 

The output tax shifted by the financial institutions must be separately billed in 

the invoice/receipt, the provisions of Revenue Regulations No. 8-99 to the contrary 

notwithstanding.î 

SECTION 5. Invoicing and Receipt Requirement - Section 7 of Revenue Regulations 

No. 12-2003, as enumerated, is hereby further amended to read as follows: 

ìSECTION 7. Invoicing/Receipt Requirements - Unless otherwise allowed 

under pertinent provisions of the laws, rules/regulations, or permitted by the 

Commissioner in meritorious cases, financial institutions shall for each transaction 

subject to VAT, issue duly registered receipts (for sale of services) or duly 

registered invoice (for sale of goods) which must show the --- 

a. name, TIN (with suffix of the word VAT), business style, if any, and address 

of the financial institution; 

b. date of transaction; 

c. name, TIN, business style, if any, and address of the VAT-registered client; 

d. description of the nature of transaction; 

e. the invoice value or consideration showing the VAT separately; 

f. total amount billed or received; and 

g. such other information as required in Section 237 and 113 of the Code. 

ìFor income/fees/charges received by the financial institution, the invoice/ 

receipt must show the details of the transaction and the total amount charged/ 

paid and the VAT-registered payor shall be entitled to an input tax for the VAT 

reflected separately in the receipt/invoice.


ìProvided, however, that with respect to net trading gains from instruments 

other than government securities, net foreign exchange gains, and all other small 

items of income such as miscellaneous fees on returned checks, below minimum 

balances, dormant accounts, ATM withdrawals, etc., the financial institution shall 

be required to issue just one VAT Official Receipt reflecting the total transactions/ 

net gains for the month and the corresponding total output tax due thereon. The 

word ìvariousî shall be indicated in the space provided for the name of the customer 

in the invoice/receipt. However, the aforesaid Official Receipt cannot be 

used as basis in claiming input tax credits. On the other hand, VAT invoice/ 

receipt covering clientís transactions with the bank or other FI other than 

those mentioned under this sub-paragraph can be issued on a consolidated 

basis per client on a monthly basis provided all the information required 

in Sections 237 and 113 of the Tax Code of 1997 and under this 

Section are reflected in the invoice/receipt and provided further that the 

specific type of transaction is enumerated individually and the passed-on 

VAT reflected separately in the invoice/receipt. 

Moreover, it is to be emphasized that with respect to financial lease, the 

treatment shall be similar to that of the gross receipts of banks on financial 

intermediation services. 

SECTION 6. Repealing Clause - Any revenue issuances inconsistent herewith are 

considered amended, modified or revoked accordingly. 

SECTION 7. Effectivity Clause - These Regulations shall take effect beginning January 

1, 2003, unless otherwise provided herein. 





--o0o-- 


Regulations Further Amending the Transitory Provisions of 

Revenue Regulations No. 4-2003, as Amended by Revenue Regulations 

No. 8-2003, Pertaining to the Deadlines on the Submission of 

Inventory List and Inventory Taking of Automobiles 

SECTION 1. Scope - Pursuant to the provisions of Section 244 in relation to Section 

245 of the National Internal Revenue Code of 1997, these Regulations are hereby promulgated 

to amend the deadlines set forth in the transitory provisions of Revenue Regulations

1222 


No. 4-2003, as amended by Revenue Regulations No. 8-2003, pertaining to the submission 

of inventory list and inventory taking of automobiles. 

SECTION 2. Transitory Provisions - Section 6 of Revenue Regulations No. 4-2003, 

further amending Revenue Regulations No. 14-97, as amended by Revenue Regulations No. 

14-99, is hereby further amended to read as follows: 

ìSEC. 2. Transitory Provisions - 

a. The provisions of Revenue Regulations No. 14-97, as amended by Revenue 

Regulations No. 14-99, shall be applicable to all automobiles completely assembled 

or imported (Completely-Built-Up or CBU units), including Completely-Knocked- 

Down (CDK) and Semi-Knocked Down (SKD) units, that are still in the custody of 

the Bureau of Customs and where import entries thereof have already been filed, 

or in the place of production, assembly plant or warehouse, as the case may be, 

as of September 8, 2003. 

b. For this purpose, the following must be complied with: 

(i) All importers and/or assemblers shall submit a duly notarized list of inventory 

on-hand completely assembled automobiles (CBUs), including Completely- 

Knocked-Down (CDK) and Semi-Knocked Down (SKD) units, that are located 

within the assembly plant or warehouse or the customsí premises as of September 

8, 2003, indicating therein the engine, body and chassis numbers thereof. 

The list shall be submitted to the Commissioner of Internal Revenue, thru the 

Chief, Large Taxpayers Assistance Division II, not later than September 12, 

2003. Failure to submit the inventory list on the part of importers/assemblers 

shall be construed that said importers/assemblers do not have any inventory on 

hand of CBUs, CKDs, and SKDs as of September 8, 2003; and 

(ii) A stocktaking of the aforesaid inventories shall be conducted by the Bureau 

of Internal Revenue for purposes of validating the said list, within five (5) 

days from the date of submission thereof. 

SECTION 3. Effectivity Clause - These Regulations shall take effect immediately. 



(SGD.) JOSE N. CAMACHO 


(SGD.) GUILLERMO L. PARAYNO, JR. 

Commissioner of Internal Revenue 

--o0o--



Implementing the Revised Tax Classification of New Brands of 

Cigarettes and Variants Thereof Based on the Current Net Retail 

Prices Thereof as Determined in the Survey Conducted Pursuant 

to Revenue Regulations No. 9-2003 





--o0o-- 


Implementing the Revised Tax Classification of New Brands of 

Alcohol Products and Variants Thereof Based on the Current 

Net Retail Prices Thereof as Determined in the Survey 

Conducted Pursuant to Revenue Regulations No. 9-2003 





--o0o-- 


Amending Pertinent Provisions of Revenue Regulations 

No. 16-2003 Relating to the Taxation of Privilege Stores 

SECTION 1. Scope - Pursuant to the provisions of Sections 6, 244 and 245, in 

relation to Sections 116 and 128 of the National Internal Revenue Code of 1997, these 

regulations are hereby promulgated to amend portions of Revenue Regulations No. 16-2003. 

SECTION 2. SEC. 2 of Revenue Regulations No. 16-2003 (Rev. Reg. 16-2003) is 

amended as follows: 

ìSEC. 2. DEFINITION OF TERMS - For purposes of these Regulations:

1224 


(a) The term ìPrivilege Storeî refers to a stall or outlet, which is not registered with 

the Bureau of Internal Revenue (BIR), not permanently fixed to the ground, and 

is normally set up in places like shopping malls, hospitals, office buildings, hotels, 

villages or subdivisions, churches, parks, sidewalks, streets and other public places, 

for the purpose of selling a variety of goods/services for short durations of time or 

special events. Provided, however, that should the duration exceed six (6) months 

in any taxable year, then, it shall not be considered a privilege-store under these 

Regulations. 

xxx xxx xxx 

(c) The term ìPrivilege-Store Operatorî refers to the person or entity leasing from 

the lessor/owner or sub-leasing from the ìexhibitorî or ìorganizerî a space upon 

which privilege stores are erected for the purpose of selling goods or services 

during the entire duration of the lease contract. 

SECTION 3. SEC. 3 of Rev. Reg. 16-2003 is amended to read as follows: 

ìSEC. 3. OBLIGATIONS OF THE EXHIBITOR/ORGANIZER AND 

PRIVILEGE-STORE OPERATORS TO THE BUREAU OF INTERNAL REV- 

ENUE. - 

(A) Obligations of the Exhibitor or Organizer - 

(1) Obligations to Post in a Conspicuous Place the Certificate of Registration 

of the Organizer - Every organizer or exhibitor is obliged to post its 

Certificate of Registration (COR) issued by the BIR in a conspicuous place in the 

area or space devoted to the establishment of privilege stores. If such organizer 

or exhibitor is not yet registered with the BIR, then such organizer/exhibitor must 

register with the BIR at least fifteen (15) days before the commencement of 

privilege stores activity and shall be valid within the calendar year. 

xxx xxx xxx 

(3) Obligation to Inform Revenue District Office (RDO). The exhibitor/organizer, 

upon determination of the number and of the respective identities of those 

who have leased/sub-leased the spaces for the operation of privilege-stores shall 

have the duty, prior to the opening thereof and prior to the issuance of his/its 

COR by the BIR if it is not yet registered, to provide the Revenue District Office 

(RDO) having jurisdiction over the place where the operation of the privilege-store 

is held with the list of the names, residence addresses, stall number/slot in the 

privilege store outlet, location site of the privilege store outlet, individual Tax Identification 

Number (TIN) of persons/entities participating in the event and the specific 

dates and duration when such operations shall be conducted. Participating 

sellers-retailers with regular or permanent places of business and which are registered 

already with the BIR should submit also a copy of its COR to the exhibitor. 

(4) Obligations to Ensure Presentation of Taxpayer Identification Number 

(TIN), the Remittance of Actual Withholding Tax Liabilities and of Ad-


vance Percentage Tax by the Privilege-Store Operator. - Every organizer or 

exhibitor is obliged to demand from the privilege store operator presentation of 

Taxpayer Identification Number and proof of payment of actual withholding tax 

due on its income payment, or of advance percentage tax due for payment prior 

to the actual operation of the privilege-store or prior to the start of the month to 

which the advance tax payment shall be applied. 

xxx xxx xxx 

(B) Obligations of Privilege Store Operators - 

(1) Obligation to Deduct and Withholding the Expanded Withholding Tax 

on Rental Payments to Exhibitor/Organizer for Sub-Leased Spaces or Lessor/Owner 

of Leased Property - Every privilege-store operator shall, upon accrual 

or payment of rentals of sub-leased spaces to the exhibitor/organizer or 

lessor/owner of leased property, withhold tax on rentals at the rate prescribed in 

Revenue Regulations No. 2-98, as amended [5% of the gross amounts], unless 

later amended, which shall be remitted/paid on or before the 10th day of the 

following month using the Monthly Remittance Return of Creditable Income Taxes 

Withheld (Expanded) [BIR Form No. 1601 E], except for taxes withheld for the 

month of December of each year, which shall be filed on or before January 15 of 

the following year pursuant to RR No. 2-98, as amended. For those who would be 

filing using the Electronic Filing and Payment System (EFPS), the regulations 

pertaining to EPS filers shall apply. If the privilege-store operator does yet have a 

TIN, then, it must apply for a TIN with the RDO having jurisdiction over the privilege 

store activity/event. 

(2) Obligation to Pay Advance Percentage Tax. - Every privilege-store operator 

shall pay percentage tax in advance as prescribed in Section 4 hereof, which 

shall be paid to the BIR, through the Authorized Agent Bank (AAB) or Revenue 

Collection Officer (RCO). In the absence of an AAB, of the Revenue District 

Office (RDO) having jurisdiction over the place where such privilege-stores have 

been set up. 

Such advance payment must be paid to the concerned AAB or RCO, in the 

absence of an AAB, on a monthly basis using BIR Form No. 0605 (Payment 

Form) on or before the first day on which the privilege store shall operate, and 

the first (1st) day of every month thereafter that it is in operation. Provided, 

however, that if the duration of the privilege-store is for less than one month, then 

the advance payment shall cover only said lesser period.î 

SECTION 4. Sec. 4 of Rev. Reg. No. 16-2003 is hereby amended to read as follows: 

ìSEC. 4 IMPOSITION OF ADVANCE PAYMENT OF TAXES - Unless the exhibit or 

business activity covers a lesser period, the following fixed amounts of percentage tax shall 

be imposed and collected on a monthly basis from the privilege-store operators in accordance 

with SEC. 3 (B) (2) hereof at the following rates: 

a. A percentage tax of One Hundred Fifty Pesos (P150.00) per day or 

Four Thousand Five Hundred Pesos (P4,500.00) per month on privi-

1226 


lege-store, regardless of dimension, set up in airconditioned place/ 

area or establishment located in a City or First Class Municipality 

during the entire duration that such privilege-store is allowed to operate. 

b. A percentage tax of One Hundred Pesos (P100.00) per day or 

Three Thousand Pesos (P3,000.00) per month on privilege-store, regardless 

of dimension, set up in non-airconditioned place/area or establishment 

located in a City or First Class Municipality during the 

entire duration that such privilege-store is allowed to operate. 

c. A percentage tax of Seventy Five Pesos (P75.00) per day or Two 

Thousand Five Hundred Pesos (P2,500.00) per month on privilegestore, 

regardless of dimension, set up in airconditioned place/area or 

establishment located in a Municipality other than a First Class Municipality 

during the entire duration that such privilege store is allowed to 

operate. 

d. A percentage tax of Fifty Pesos (P50.00) per day or One Thousand 

Five Hundred Pesos (P1,500.00) per month on privilege-store, regardless 

of dimension, set up in non-airconditioned place/area or 

establishment located in a Municipality other than a First Class Municipality 

during the entire duration that such privilege store is allowed 

to operate. 

The above prescribed daily rates and manner and mode of payment, notwithstanding, 

the Commissioner may change the rates of the aforementioned tax paid 

in advance depending upon the business situation of the taxpayer, or upon 

request of the taxpayer duly supported with reasons or justification for the request, 

to be embodied in subsequent revenue regulations.î 

SECTION 5. SEC. 5 of Rev. Reg. No. 16-2003 is hereby amended to read as follows: 

ìSEC. 5. CESSATION AS PRIVILEGE STORE. - As ìPrivilege-Storeî embraces 

only a business activity not registered with the BIR, upon registration by 

the privilege-store operator with the BIR and compliance with its bookkeeping 

requirements, the ìprivilege-storeî then ceases to be so and shall thenceforth be 

governed by pertinent existing revenue laws and regulations.î 

SECTION 6. SEC. 6 of Rev. Reg. No. 16-2003 is hereby amended by deleting its 2nd 

paragraph and revising the 1st paragraph, to read as follows: 

ìSEC. 6 PROOF OF ADVANCE PAYMENT - The advance payment of percentage 

tax shall be evidenced by the duly validated copy of BIR Form No. 0605 

and the Official Receipt/Deposit Slip issued by the AAB or the RCO, in the absence 

of an AAB, of the RDO having jurisdiction over the place where the privilege-store 

operates.î 

SECTION 7. SEC. 7 of Rev. Reg. No. 16-2003 is hereby amended to read as follows:


ìSEC. 7. IMPLEMENTATION GUIDELINES. For purposes of these Regulations, 

the following guidelines shall be observed: 

xxx xxx xxx 

(b) Based on the list provided by the exhibitor/organizer, the RDO shall recommend 

the issuance by the Regional Director of Mission Order/s directing the 

concerned RDO to deploy RCOs or Revenue Officers (ROs) who shall be incharge 

in physically checking compliance by the exhibitor/organizer of his obligations 

imposed herein, and of monitoring and checking whether advance payments 

of business tax and actual payment of the withholding tax on rentals and 

other income payments subject to withholding tax have been duly made by the 

operators of the privilege stores.î 

(c) Unless the duration of the exhibit is for a period lesser than a monthís time, 

advance payment of percentage tax shall be on a monthly basis which shall be 

paid a week before the start of every month and remitted to the AAB or RCO, in 

the absence of an AAB, using BIR Form No. 0605 (Payment Form). In all cases, 

advance payment shall always be made within the week prior to the actual start of 

the exhibit. The advance payment shall be equal to the number of days of operation 

in a monthís time for which the advance payment shall be applied for.î 

SECTION 8. Repealing Clause - The provisions of revenue issuances that are inconsistent 

herewith are hereby repealed, modified or amended accordingly. 

SECTION 9. Effectivity Clause - The provisions of these Regulations shall take effect 

immediately after fifteen (15) days following publication in a newspaper of general circulation 

in the Philippines. 




Recommending Approval: 


Commisioner of Internal Revenue 

--o0o-- 

Revenue Memorandum Circular No. 28-2003 

Clarification of Issues on the Imposition of Value-added Tax on Banks, 

Non-Bank Financial Intermediaries, Finance Companies and Other 

Financial Intermediaries Not Performing Quasi-Banking Functions

1228 


1-Q. Are income from services performed by banks and other financial institutions (FIs) to 

PEZA and BOI-registered enterprises, and to persons with VAT Exemption Certificate (VEC) 

processed pursuant to RMO 81-99 exempt from VAT? 

1-A. Income from sale of services to BOI-registered export enterprise with 100% export 

sales and PEZA-registered/Ecozone export enterprise are subject to VAT at 0% while 

services rendered to qualified embassies and their personnel with VEC are subject to VAT 

but the embassy with valid VEC from the BIR may claim refund or tax credit for the VAT 

passed-on its purchases. (The validity period of the BOI) Certificate of Registration, PEZA 

Certificate of Registration, and VAT Exemption Certificate is discussed in separate revenue 

issuances) 

2-Q. Are trust funds managed by the banks and other FIs subject to VAT? 

(These funds may include common trust funds, investment management agreement, etc.?) 

2-A. No. The VAT applies only to the fees/compensation which the Trust Department 

receives for performing the services of managing the trust funds. 

3-Q. Is Gross Receipts determined on a cash or accrual basis? 

3-A. Generally, ìgross receiptsî is determined on a cash basis, so that if an income is 

received, actually or constructively, it is already subject to VAT; or simply put, VAT is 

imposed on income/deposit/advance payment received regardless of the time or period 

when it was/is earned. 

4-Q. In the cash method, when is the income from discounted loans and investments recognized 

for VAT purposes? 

4-A. A discounted loan is a loan where the entire interest and principal are paid at 

maturity. In this case, the VAT shall be paid on maturity. However, if the discounted loan is 

sold before maturity date, the trading gain arising therefrom is subject to VAT. For the 

subsequent holder which is likewise a financial institution, the VAT will be based on the 

difference between the maturity value and the acquisition cost of the securities. Interest 

on coupon bonds received before maturity of the bonds and any other interest income, for 

that matter, received before the maturity of the investment/securities shall be taxable in 

the period of receipt. 

5-Q. In the accrual method, when is the VAT payable by the FI? 

5-A. If a Financial Institution adopts the accrual method, the VAT is payable only upon 

actual or constructive receipt of the income. The FI, being classified as a seller of service, 

is not liable to VAT upon accrual of the income. 

6-Q. How do the terms ìactually received incomeî and ìconstructively received incomeî in 

Section 2.10 of RR 12-2003 differ from each other? 

6-A. The term ìactually or constructively received amount of incomeî is equivalent to the 

economic benefit derived from the income payment. Actual receipt of income happens 

when actual physical possession of the money or property payment takes place whereas 

constructive receipt of the income occurs when the money consideration or its equivalent 

is placed at the control of the person who rendered the service without restrictions by the


payor. The following are examples of constructive receipts: 1) deposit in banks which are 

made available to the seller of services without restrictions: 2) issuance by the debtor of 

a notice to offset any debt or obligation and acceptance thereof by the seller as payment 

for services rendered; and 3) transfer of the amounts retained by the contractee to the 

account of the contractor. Hence, where the income payment was subjected to final tax 

the amount constructively received corresponding to the final withholding of income tax 

which was used in extinguishing the recipientís income tax liability on the income received 

forms part of the taxable receipt for purposes of computing recipientís/taxpayerís VAT 

liability; 

7-Q. Under the accrual method, can a bank or other FI adjust its VAT payment for income 

earlier earned and received but later reversed when this loan becomes non-performing? 

7-A. As stated earlier, VAT is payable at the time the income is received. Nonetheless, 

income collected in advance and taxed upon receipt but subsequently returned for failure 

to deliver the required service shall be treated as a deduction from gross receipts at the 

time the previously collected amount is returned. 

8-Q. How is financial intermediation service fee defined and computed? 

8-A. The term ìfinancial intermediation servicesî refers to the gross interest income received, 

including discounts received in cash or property, from all lending and investment 

activities of the financial institution. 

9-Q. Are the income of banks and other FIs from transactions with the Bangko Sentral ng 

Pilipinas subject to VAT which can be passed on to BSP. 

9-A. Yes. VAT, being an indirect tax, can be shifted/passed-on to the customer-BSP. 

10-Q. Are the income of banks and other FIs from investments in government securities and 

commercial papers which are issued respectively by the National government/other government 

agencies and corporate issuers subject to VAT which can be passed-on to said issuers. 

10-A. Yes, All income of FIs are subject to VAT except transactions specifically exempted 

under Section 109 of the Tax Code of 1997 and other special laws. 

11-Q. In computing the difference between the value of the foreign currencies sold and 

foreign currencies purchased, can banks use the net gain or loss of its foreign currency 

position at the end of each month? 

11-A. Yes. Revenue Regulations No. 12-2003 in Section 3.3 expressly so provides. 

12-Q Can the gain or loss in a foreign currency position in one month be offset against the 

loss or gain in another month for purposes of determining the output tax? 

12-A. Yes, provided the months are within the same calendar or fiscal quarter. 

13-Q. Are forex swap differentials part of the net foreign exchange/trading gains or losses, 

whichever is applicable?

1230 


13-A. Forex swap differentials are part of a foreign exchange transaction. 

14-Q. Is a revaluation gain involving foreign currencies and securities transactions subject to 

VAT? 

14-A. No, if it is a translation gain or loss for the purpose of book entry or recording and 

that no actual transaction occured. 

15-Q. On net trading gains, how is ìcarrying costî defined? 

15-A. For VAT purposes, ìcarrying costî is the original amount or the cost, net of unearned 

discount, incurred to acquire the security. 

16-Q. Can banks and other FIs deduct foreclosure expenses (such as legal fees, sheriff 

fees, etc.) for purposes of determining the gain on ROPOA sales subject to VAT? 

16-A. No, since we are referring to a VAT base, not income tax. 

ìSection 3.5 On ROPOA Sales or Sales of Other Properties Acquired Through 

Foreclosure - The output tax on ROPOA sales, as well as other properties 

acquired through foreclosure sale, shall be determined by multiplying by ten 

percent (10%) the gain, or the difference between the amount realized at the 

time of sale and the cost thereof which is equivalent to the bid price or unpaid 

loan value, whichever is lower, at the time of the foreclosure of the property, 

which gain or difference shall be considered as the gross receipts of the financial 

institution from the aforesaid transactions.î (Revenue Regulations No. 12- 

2003) 

17-Q. Is the mortgagee-bank/FI liable to VAT on foreclosure of mortgaged property and/or 

upon consolidation of the aforesaid foreclosed property in the bank and other FIís books? 

17-A. No. VAT is payable at the time the ROPOA is finally sold or disposed. The VAT base 

shall be the gain or difference between the amount realized at the time of sale and the cost 

thereof which is equivalent to the bid price or unpaid loan value, whichever is lower, at the 

time of foreclosure. Time of foreclosure for this purpose, means the time when the Loan 

Receivable account is reversed and a ROPOA account is created in the books. 

18-Q. Are ROPOA sales under an SPV program subject to VAT? 

18-A. Subject to the conditions set forth in Sections 15, 16, 17 and 18 of Article IV of 

Republic Act No. 9182, transfer of ROPOA from FIs to SPV (Special Purpose Vehicle) is 

exempt from VAT. 

19-Q. When is the gain on ROPOA sold on installment basis subject to VAT? 

19-A. Gain on ROPOA is subject to VAT at the time of sale, not at the time of payment 

(regardless of whether the method or mode of payment is cash or installment) 

20-Q. Is income previously exempt from GRT also exempt from VAT? These include dividends, 

Landbank Agrobonds, HIGC guaranteed loans.


20-A. No. The only income or transactions that are exempt from VAT are those so exempted 

by express provision of the law (Section 109 of the Tax Code of 1997), including 

special laws. Dividend is subject to GRT (gross receipts tax) at 0% while it is subject to 

VAT at 10%. 

21-Q. Are income earned and subjected to GRT in the previous years (before 2003) but 

paid and collected in 2003 subject to VAT? 

21-A. If prior to January 1, 2003, GRT was actually paid on the income collected in 2003, 

then it is no longer subject to VAT. 

22-Q. Are income paid in advance but unearned subject to VAT? 

22-A. Yes, applying the definition for the term ìGross Receipts. 

23-Q. Can service income which has been subjected to VAT in one period but later becomes 

uncollectible be deducted from the bank and other FIs VAT liability in another period? 

23-A. No. Such a situation will not arise because VAT liability is determined and collected 

based on gross receipts (whether such gross receipts is actual or constructive). 

24-Q. Are bad debts recoveries subject to VAT? 

24-A. Yes, on the portion pertaining to past due interest and other charges, but not on the 

principal amount of loan. 

25-Q. What is the transition period for banks and other FI to implement the VAT regulation? 

25-A. Two months or from January 1 to February 28, 2003 (RR 12-2003). 

26-Q. Can the VAT invoice and receipt covering the clientís transactions with the bank or 

other FI be issued on a consolidated basis per client? 

26-A. Yes, provided all the information required in Sections 237 and 113 of the Tax Code of 

1997 and Section 7 of Revenue Regulations No. 12-2003 are reflected in the invoice/ 

receipt and provided further that the specific type of transaction is enumerated individually 

in the receipt. A charge invoice is issued to customer to evidence sale on account 

whereas a cash invoice/official receipt is issued to client to evidence cash sale. An official 

receipt is issued to client to evidence collection of sale on account. 

27-Q. Can a Billing Statement/Statement of Account issued by an FI serve as an Official 

Receipt? 

27-A. A Billing/Statement of Account cannot be considered as an Official Receipt (OR) 

since an OR is issued only upon receipt of the monetary or property consideration or price 

which is not yet happening when a Billing Statement is released. Nonetheless, a Billing 

Statement/Statement of Account can serve or function as a charge invoice provided all the 

information required in Sections 237 and 113 of the Tax Code of 1997, and Section 7 of 

Revenue Regulations No. 12-2003 are reflected in the Billing Statement/Charge Invoice.

1232 


28-Q. Can FIsí clients use the input VAT pertaining to transactions during the transition 

period? Can the FI use the input VAT pertaining to transactions during the transition period? 

28-A. FIsí clients can use the input VAT pertaining to transactions during the transition 

period provided these transactions are evidenced by BIR-approved and-registered VAT 

invoice/receipts which separately reflected by the passed-on VAT and, only where the 

input tax was recorded in the books as a separate/independent item from the account 

where it was sourced. On the other hand, the FI can use the input VAT pertaining to 

transactions during the transition period if the transactions are evidenced by BIR-approved 

and-registered VAT invoice/receipts and at the same time the input tax was recorded 

in the books as a separate/independent item from the account where it was sourced. 

29-Q. Can banks and other FIs forego issuing VAT receipts covering transactions with non- 

VAT registered clients. In case there are clients who refuse to sign a confidential waiver 

under RA No. 1405 and the General Banking Act, can the banks and other FIs refuse to 

issue VAT receipts on affected transactions and remove the identity of said clients in the 

reports to BIR? 

29-A. Banks and other FIs or any VAT registered person/entity cannot forego the issuance 

of VAT invoice/receipts with its VAT or non-VAT clients. It is a mandatory requirement 

under Sections 113 and 237 of the Tax Code of 1997. Failure to do so could mean suspension 

by the Commissioner of Internal Revenue of the banksí or FIsí business operation 

and temporary closure of the business establishment, aside from the imposition of other 

administrative, civil, and criminal sanctions allowed under existing rules. Moreover, FIs, 

as VAT-taxable entities, are required to comply with the requirements prescribed in Revenue 

Regulations No. 8-2002 (The submission of the Schedule of Sales, Schedule of 

Domestic Purchases of Goods and Services, and Schedule of Importation to the home 

RDO of the taxpayer). 

30-Q. In cases where one consolidated VAT receipt is prescribed (i.e., trading gains, foreign 

exchange gains, small amounts, ATM fees, returned checks, telegraphic transfers) can 

the banks and other FIs issue ìsub-VAT receipts to VAT-registered entities who make such a 

request? 

30-A. No. Issuance of one consolidated VAT receipt per category of transaction is allowed 

only in those instances enumerated in Revenue Regulations No. 12-2003. The receipts to 

be issued by banks and other FIs are BIR-approved and registered VAT Official Receipts. 

In instances where issuance of consolidated VAT receipt per category of transaction is 

allowed under the law, request by client for issuance of sub-VAT receipt per client and/or 

per transaction cannot be granted although a purchase voucher accomplished by the 

client may be signed by the FI to substantiate clientís purchases. 

31-Q. Are interests paid by banks and other FIs to VAT-registered depositors and lenders 

subject to VAT? 

31-A. No, except if the VAT-registered depositor is a bank or FI because interest is an 

operating/business income to an FI. It, therefore, follows that in no instance can a bank 

or an FI claim an input tax on its transactions with the said depositors or lenders who are 

not FIs.


32-Q. Can banks and other FIs choose to bill either (i) 10% of gross receipts, or (ii) 1/11 of 

total amount billed and received? Can these invoices/receipts be computer generated? 

32-A. No. Billing should conform with Section 7 of RR 12-2003 which mandates that the 

VAT component be shown separately. 

Invoices/receipts can be computer-generated provided that the machine which generates 

such receipt is duly-registered with the BIR. 

33-Q. In the meantime that the bank has yet no system-generated VAT invoice/receipt while 

waiting for the finalization of system redesign, can it be allowed not to issue invoice/receipt? 

33-A. No. In the meantime that the bank is waiting for it to be able to issue systemgenerated 

invoice/receipt, it has to issue manually printed invoice/receipt after having 

secured the required Authority to Print Invoice/Receipt with the Bureau of Internal Revenue 

following existing rules. 

34-Q. How shall the FI record the interest on loan transaction where the VAT is not passedon 

to the client but shouldered by the FI evidenced by an official receipt not separately 

reflecting the output VAT (e.g., Interest Income of P100,000 received in cash)? 

34-A. In a situation where the loan by the FI to the client was contracted prior to 2003 and 

no escalation on interest charges was made as a result of the VAT, the FI shall prepare the 

following accounting entries: 

Cash P100,000.00 

Interest Income 90,909.09 

Output VAT Payable (1/11) 9,090.91 

To record receipt of cash representing Interest Income and VAT Payable. 

Applying the above entry, the taxable interest income of the bank is only P90,909.09. 

35-Q. What details are required in the preparation of the schedules due for submission to 

the BIR on the due date for the filing of the Quarterly VAT Return? 

35-A. Details of the schedules due for submission on the same date as the due date for 

filing the Quarterly VAT return are prescribed in Revenue Regulations No. 8-2002. VAT 

returns with payment are filed with Accredited Agent Banks while returns without payment 

are supposed to be filed with the BIR. In all instances, the schedules required under RR 

No. 8-2002 are to be submitted to the concerned BIR office. 

36-Q. Will the requirement of submitting the Schedule of Sales and Schedule of Purchases 

not violate R.A. 1405 on the confidentiality of bank deposits and the General Banking Law of 

2000 on the confidentiality of all matters related to the funds and properties of a bankís 

client? 

36-A. No. Republic Act No. 1405 (The Law on Secrecy of Bank Deposits) and Republic 

Act No. 8791 (The General Banking Law of 2000) prevent any unauthorized divulgence of

1234 


matters pertaining to clientís deposits, funds and properties under custody of the bank 

only. 

37-Q. In addition to net trading and forex gains and small items, can the following income be 

reported in one consolidated VAT receipt? 

- car fees (annual fees) 

- cable and postal charges 

- over the counter fees (i.e. cashier checks, managerís checks, lost card charges) 

- custodial fees 

- trust fees 

- telegraphic charges 

- commitment on deferred payment bills 

- commission on LC, shipping guarantees, standby documentary credits 

- safety deposIt box rental 

- stock transfers fees 

- commission in lieu of exchange 

37-A. Yes, provided the provisions of Sections 113 and 237 of the Tax Code of 1997, and 

those specified in Section 7 of RR 12-2003 are strictly followed, and provided, further, that 

the specific type of transaction is enumerated individually in the invoice/receipt. 

38-Q. How do banks and other FIs substantiate the 8% transitional input tax? 

38-A. For the FIs to be able to claim the 8% transitional input tax, Section 8 of RR 12-2003 

provides that a journal entry be made in the books by debiting the input tax account and 

crediting the asset account (goods, materials and supplies) which is the source of the 

input tax and, that the transitional input tax credit which is 8% of the inventory of goods, 

materials and supplies as reflected in the Inventory List, or the actual VAT paid thereon, 

whichever is higher, be duly supported with VAT invoices/receipts. 

39-Q. When will the bank recognize the output VAT on interest income from loans and other 

transactions generating interest income? When is it considered received? Does mere debiting/crediting 

the account of a client result to receipt? or is there taxable receipt only when the 

interest income is recorded in the books? 

39-A. The bank shall recognize the output VAT on interest income when it is actually or 

constructively received as when the interest is already collected or placed at the free 

disposal or control of the person earning the income. 

If the bank has taken control over the interest income such as when an existing 

deposit account of client is debited for the charged bankís interest income, such interest is 

considered constructively received upon debiting the deposit account. 

Accrual of the interest income in the books of the FI without actual or constructive 

receipt thereof is not yet a VAT taxable event. 

40-Q. RMC 19-2003 allows FIs to file amended 1st quarter VAT returns/pay taxes due thereon 

without penalty. Until when will this abatement of penalties be allowed?


40-A. Filing of amended VAT returns and payment of taxes due thereon, if any, without 

penalties shall be allowed until June 30, 2003. 

41-Q. Aside from Revenue Regulations No. 12-2003, what other Regulations govern the VAT 

taxation of FI? 

41-A. Revenue Regulations No. 7-95, as amended (The Consolidated VAT Regulations). 

All revenue officials concerned are requested to give this Circular as wide a publicity 

as possible. 

Adopted: 15 May 2003 




--o0o--- 


Clarification of Paragraph I-Q of Revenue 

Memorandum Circular No. 28-2003 

Revenue Memorandum Circular (RMC) No. 28-2003 clarifying issues on the imposition 

of Value-Added Tax (VAT) on the services of banks, non-bank financial intermediaries, 

finance companies and other financial intermediaries not performing quasi-banking functions, 

provides under paragraph 1-Q thereof that income from sale of services by banks and 

other financial institutions to BOI-registered export enterprise with 100% export sales and 

PEZA-registered/Ecozone export enterprise are subject to VAT at 0%. 

Relative thereto, this Circular is being issued to clarify that the term ìPEZA-registered/ 

Ecozone export enterpriseî refers to an enterprise registered either with PEZA or with other 

Ecozone (i.e., Subic, Clark, John Hay or Poro Point Special Economic Zone) as an export 

enterprise. 

Furthermore, zero-rating will only apply to services rendered by financial institutions 

that are directly related to the registered activity of the export enterprise. As a mode of 

implementation, the financial institution shall require the export enterprise to show proof that 

the transactions are in fact directly related to its registered activity and to submit a Sworn 

Statement attesting to such fact. These records must be kept by the financial institutions and 

made available for audit by BIR on demand. 

All concerned are hereby enjoined to be guided accordingly and give this Circular as 

wide a publicity as possible. 

Adopted: 20 May 2003

1236 





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Uniform Guidelines on the Taxation of Imported Motor Vehicles 

through the Subic Free Port Zone and Other Freeport Zones 

That are Sold at Public Auction 

I. Background - It has been an open practice that motor vehicles such as passenger cars, 

light commercial vehicles, trucks and other heavy equipments enter the Philippines through 

the Subic Special Economic and Freeport Zone (SSEFZ), as well as through the other 

legislated freeport zones, for the purpose of selling them at public auction. These vehicles 

are brought in as brand new or second-hand units, either as left-hand drive or right-hand 

drive vehicles, and most of which are being sold in lots at public auctions. While the auctioned 

imported vehicles are usually consigned to the auctioneer, there are also instances 

when said importations are made by individual persons who avail the services of the auctioneer 

by including their individual units of vehicles to the lots being auctioned. In turn, the 

individual unit consignees pay the auctioneers a certain amount as commission for the 

services rendered. Currently, there are three (3) registered auctioneers in SSEFZ, namely: 

Subic Bay Motor Corporation, United Auctioneers and Asia International, while three (3) 

others are operating in Valenzuela, Bulacan, namely: Auction Line, Auction in Malinta and 

United Auctioneers. 

Up to the middle of 1999, the price actually fetched at auction was taken as the dutiable 

value of the goods. The winning bidders themselves pay the duties and taxes before the 

release of the goods from the zone. In response to alleged complaints by winning bidders 

about delays resulting from the refusal of some Customs officials to automatically accept the 

bid price as the basis for the computation of the duty and tax payable, as well as alleged 

ìfoot draggingî the release process, certain changes were instituted. 

The duty and taxes payable are now determined before the conduct of the auction. The 

auction firms present the invoice issued by the supplier of the goods from abroad which 

reflects the price that (unless disputed) is taken as the transaction value. The auctioneer 

himself pays the duties and taxes before the conduct of the sale so there is no more customs 

intervention after the sale of the goods. Moreover, these imported articles are being released 

from the customsí custody without the prescribed Authority to Release Imported Goods 

(ATRIG) issued by this Bureau. 

These motor vehicles, in turn, are being registered with the Land Transportation Office 

(LTO) in the names of the auctioneers before the conduct of the public auction. These 

schemes in the payment of taxes and effecting registration with the LTO in the names of the 

auctioneers were adopted to facilitate the release of the vehicles from the Bureau of Customs 

(BOC) and the transfer of registration of the same to the winning bidder.


It has been observed that while this practice is already going on for a considerable 

length of time, this Bureau has not obtained sufficient information to effectively monitor the 

activities of the auctioneers, zone-locators, traders and auction-consultants and to ensure 

that the correct internal revenue taxes are being collected from them. It may have been the 

result of the confusion on what should be the proper tax treatment on the different transactions 

involved in such public auctions. In view thereof, this Circular is issued to clarify the tax 

treatments, as well as the proper procedures to be observed, on the transactions involved in 

such public auctions of these imported motor vehicles and heavy transportation/construction 

equipments. 

II. Tax treatments on the transactions involved in the importation of motor vehicles 

through the SSEFZ and other legislated freeport zones and subsequent sale thereof 

through public auction - Pursuant to existing revenue issuances, the following are the 

uniform tax treatments that are to be adopted on the different transactions involved in the 

importation of motor vehicles through the SSEFZ and other legislated freeport zones that are 

subsequently sold through auction: 

A. Importation of motor vehicles into the freeport zones 

1. Motor vehicles that are imported into the freeport zones for exclusive use within the zones 

are, as a general rule, exempt from customs duties, taxes and other charges provided that 

the importer-consignee is a registered enterprise within such freeport zone. However, should 

these motor vehicles be brought out into the customs territory without returning to the freeport 

zones, the customs duties, taxes and other charges shall be paid to the BOC before release 

thereof from its custody. 

2. In case of tourist buses and cars, service vehicles of registered freeport enterprises and 

company service cars are used for more than an aggregate period of fourteen (14) days per 

month outside of the freeport zones, the owner or importer shall pay the corresponding 

customs duties, taxes and charges. 

3. For imported motor vehicles that are imported by persons that are not duly registered 

enterprises of the freeport zones, or that the same are intended for public auction within the 

freeport zones, the importer-consignee/auctioneer shall pay the value-added tax (VAT) and 

excise tax to the BOC before the registration thereof under its name with the LTO and/or the 

conduct of the public auction. 

4. For purposes of computing the value-added tax (VAT) and excise tax, if applicable, the 

basis thereof is the transaction value used by BOC in determining the tariff and customs 

duties and shall be paid before the motor vehicles are released from the customs custody. 

B. Subsequent sale/public auction of the motor vehicles 

1. Scenario One - The public auction is conducted by the consignee of the imported 

motor vehicles within the freeport zone 

1.1 The gross income earned by the consignee-auctioneer from the public auction 

of the imported motor vehicles shall be subject to the preferential tax rate of 

five percent (5%) in lieu of the internal revenue taxes imposed by the National 

Internal Revenue Code of 1997, provided that the following conditions are present:

1238 


a. That, the consignee-auctioneer is a duly registered enterprise entitled to 

such preferential tax rate as well as a registered taxpayer with the Bureau of 

Internal Revenue (BIR). 

b. That, the total income generated by the consignee-auctioneer from sources 

within the customs territory does not exceed thirty percent (30%) of the total 

income derived from all sources. 

1.2 In case the consignee-auctioneer is a registered enterprise and/or locator 

not entitled to the preferential tax treatment or if the same is entitled from such 

incentive but its total income from the customs territory exceeds 30% of its entire 

income derived from the customs territory and the freeport zone, the income 

derived from the public auction shall be subjected to the regular internal revenue 

taxes imposed by the Tax Code. 

1.3 In case the motor vehicles were imported by certain persons, whether natural 

or juridical, who are not registered auctioneers and the services of the registered 

auctioneer were availed of for purposes of including such imported motor vehicles 

in the public auction, the following rules shall be observed: 

a. The income derived from the auction sale by such persons shall be treated 

as an ordinary income subject to the regular income taxation. 

b. For natural persons, in the event they have engaged in the said transaction 

for five (5) or more times in given taxable period, such persons shall be considered 

as habitually engaged in trade and business. Accordingly, they shall be 

required to be registered to the BIR and pay the appropriate taxes including the 

obligation to withhold the creditable expanded withholding tax on the amount paid, 

as commission income, for the services rendered by the registered auctioneer. 

1.4 In the event that the winning bidder shall bring the motor vehicles into the 

customs territory, the winning bidder shall be deemed the importer thereof and 

shall be liable to pay the VAT and excise tax, if applicable, based on the winning 

bid price. However, in cases where the consignee-auctioneer has already paid 

the VAT and excise tax on the motor vehicles before the registration thereof with 

LTO and the conduct of public auction, the additional VAT and excise tax shall be 

paid by winning bidder resulting from the difference between the winning bid 

price and the value used by the consignee-auctioneer in payment of such taxes. 

For excise tax purposes, in case the winning bid price is lower than the total costs 

to import reconditioning/rehabilitation of the motor vehicles, and other administrative 

and selling expenses, the basis for the computation of the excise tax shall be 

the total costs plus ten percent (10%) thereof. The additional VAT and excise 

taxes shall be paid to the BIR before the auctioned motor vehicles are registered 

with the LTO. 

1.5 In case the services of a professional auctioneer is employed for the public 

auction, the final withholding tax of 25% in case he/she is a non-resident alien, or 

the expanded withholding tax of 20% in case he/she is a resident citizen or alien, 

shall be withheld by the consignee-auctioneer from the amount of consideration


to be paid to the professional auctioneer and shall be remitted accordingly to the 

BIR. 

2. Scenario Two - The public auction is conducted outside the freeport zone 

The transactions in the public auction are likewise subject to the internal revenue taxes 

imposed by the Tax Code, detailed as follows: 

2.1 For income tax purposes, the regular income tax rates imposed under Section 

24 (A), and Section 27 of the Tax Code on the net income, for individuals and 

corporate taxpayers, respectively, shall apply. 

2.2 The additional VAT and excise tax resulting from the difference between the 

winning bid price and the value that may have been used in payment of such 

taxes to the BOC shall be paid by the consignee/auctioneer to the BIR where it is 

registered before the auctioned motor vehicles are registered with the LTO under 

its name. In case the winning bid price is lower than the total costs to import, 

reconditioning/rehabilitation of the motor vehicles, and other administrative and 

selling expenses, the basis for the computation of the excise tax shall be the total 

costs plus ten percent (10%) thereof. 

2.3 If the consignee-auctioneer is not a BIR-registered taxpayer, the gross sales 

derived from such auction shall be subjected to VAT and the same shall be remitted 

to the BIR where the consignee-auctioneer is required to be registered without 

the benefit of tax credit for the amount of VAT that had been paid to the BOC. 

However, if the consignee-auctioneer is a registered VAT taxpayer, the gross 

sales derived from such auction shall be subjected to the 10% VAT and shall be 

paid to the BIR where the consignee-auctioneer is required to be registered, net 

of the amount of VAT that had been paid to BOC. 

2.4 If the consignee-auctioneer is a registered non-VAT taxpayer, the gross sales 

derived from such auction shall be subjected to the percentage tax rate of 3% and 

shall be paid to the BIR where the consignee-auctioneer is required to be registered. 

The amount of VAT that has been paid to the BOC shall form part of the 

cost of the imported vehicles and deductible only for income tax purposes. However, 

in case the total gross sales amounted to P550,000.00 at any given time 

during the taxable period, the consignee-auctioneer, within 30 days following the 

end of the month when the P550,000 threshold was reached, shall change its 

registration from Non-VAT to VAT and thereafter, be required to file the VAT 

return and pay the 10% VAT on the gross sales derived from the subsequent 

auction sales. 

2.5 The tax treatment indicated in Scenario 1 hereof shall be similarly applied 

even if the consignee-auctioneer engages the services of a professional auctioneer. 

2.6 The same tax treatment in Scenario 1 hereof shall be applied in case certain 

persons who are not registered auctioneers have imported the motor vehicles that 

are subsequently publicly auctioned through the services of a registered auctioneer.

1240 


III. Authority to Release Imported Goods (ATRIG) requirement - For motor vehicles 

defined as automobiles under the existing revenue regulations, an Authority to Release Imported 

Goods (ATRIG) shall be secured from the LT Assistance Division of the Large Taxpayers 

Service, National Office, before the value-added/excise taxes, if any, is paid and the 

automobile is released from the Bureau of Customs, pursuant to the Joint Memorandum 

Circular No. 1-2002 between the BIR and the BOC and Revenue Memorandum Order No. 

35-2002 dated October 28, 2002. 

All revenue officials and employees and others concerned are enjoined to give this 

Circular as wide a publicity as possible. 





--o0o-- 


Revised Uniform Guidelines on the Imposition of Value Added Tax on the 

Sale, Through the Public Auction/Negotiated Sale of Motor Vehicles 

Imported Through the Subic Freeport Zone and Other Freeport Zones 

I. Background - On June 3, 2003, Revenue Memorandum Circular (RMC) No. 31-2003 was 

issued to clarify the tax treatment of motor vehicles and heavy transportation/construction 

equipments imported through the Subic Economic and Freeport Zone (SSEFZ), as well as 

through the other legislated freeport zones and thence sold these thru public auction or 

negotiated sale. Said circular was issued on the premise that while the importation of the 

vehicles are deemed terminated prior to the conduct of auction sale which sale in effect 

becomes a second vatable event, the computation of excise tax at Customs is not based on 

the importerís selling price. Subsequent information gathered from the Bureau of Customs 

indicates that the excise tax is being assessed based on the estimated importers selling price 

which includes a ten percent (10%) profit margin. 

In view of this additional information, this Circular is issued to clarify the implementation of 

RMC No. 31-2003 with regard to the taxability on the sale of imported motor vehicles whether 

by public auction or through negotiated sale. 

II. Implementation - The imported motor vehicles after its release from Customs custody are 

sold through public auction/negotiated sale by the consignee within or outside of the Freeport 

Zone: 

A. The gross income earned by the consignee-seller from the public auction/negotiated sale 

of the imported vehicles shall be subject to the preferential tax rate of five percent (5%) in lieu


of the internal revenue taxes imposed by the National Internal Revenue Code of 1997, 

provided that the following conditions are present: 

1. That the consignee-seller is a duly registered enterprise entitled to such preferential 

tax rate as well as a registered taxpayer with the Bureau of Internal Revenue 

(BIR). 

2. That the total income generated by the consignee-seller from sources within 

the customs territory does not exceed thirty percent (30%) of the total income 

derived from all sources. 

B. In case the consignee-seller is a registered enterprise and/or locator not entitled to the 

preferential tax treatment or if the same is entitled from such incentive but its total income 

from the customs territory exceeds thirty percent (30%) of its entire income derived from the 

customs territory and the freeport zone, the sales or income derived from the public auction/ 

negotiated sale shall be subjected to the regular internal revenue taxes imposed by the Tax 

Code. The consignee-seller shall also observe the compliance requirements prescribed by 

the Tax Code. When public auction or negotiated sale is conducted within or outside of the 

Freeport zone, the following tax treatment shall be observed: 

1. Value Added Tax (VAT)/Percentage Tax (PT) - VAT or PT shall be imposed on 

every public auction or negotiated sale. 

2. Excise Tax - The imposition of excise tax on public auction or negotiated sale 

shall be held in abeyance pending verification that the importerís selling price 

used as a basis by the Bureau of Customs in computing the excise tax is correctly 

determined. 

III. Authority to Release Imported Goods (ATRIG) requirement - For motor vehicles 

defined as automobiles under the existing revenue regulations and imported through the 

SSEFZ, an Authority to Release Imported Goods (ATRIG) shall be secured from the Regional 

Director, Revenue Region No. 4, San Fernando, Pampanga through the Revenue District 

Officer, RDO No. 19, SBMA before the value added/excise tax, if any, is paid and the 

automobile is released from the Bureau of Customs, pursuant to the Joint Memorandum 

Circular No. 1-2002 between the BIR and the BOC and Revenue Memorandum Order No. 

35-2002 dated October 28, 2002. 

All revenue officials and employees and other concerned are enjoined to give this 

circular as wide a publicity as possible. 





--o0o--

1242 



Termination and Handling of Audit/Investigation and Reinvestigation/ 

Reconsideration of Tax Liabilities/Tax Return of Taxpayerís Under 

the Jurisdiction of the Large Taxpayers Service, Enforcement Service 

and Legal Service, and Those Handled by the Various Task Forces in the 

Light of the Pronouncement of the President last January 20, 2003 





--o0o-- 


Clarifying Certain Issues Raised Relative to the Processing of Claims 

for Value-Added Tax (VAT) Credit/Refund, Including Those Filed with the 

Tax and Revenue Group, One-Stop Shop Inter-Agency Tax Credit and 

Duty Drawback Center, Department of Finance (OSS) by Direct Exporters 

Q-1: In case the supporting documents (invoices/receipts) evidencing the sources of 

input tax credits were issued outside the taxable period covered by the claims (outof-period-claims), 

can the input taxes generated therefrom still be credited upon verification 

that the same have not yet been claimed? 

A-1: Out-of-period claims may be allowed provided that they comply with all the following 

requirements, viz: 

1. That the VAT invoices/receipts are issued within the taxable year that the claim 

was made; 

2. That the VAT invoices/receipts cover transactions for the same taxable year; 

3. That they have not been claimed in any other quarter of the same or different 

taxable year; and 

4. The invoices/receipts are not claimed in any period ahead of the actual date of 

the said invoices/receipts. 

It is to be emphasized that provided the VAT invoices/receipts are claimed within 

the taxable year, any excess input taxes generated therefrom can be carried over 

to the following taxable year.


(Invoice is the supporting document for the claim of input tax on purchase of 

goods whereas official receipt is the supporting document for the claim of input 

tax on purchase of services) 

Q-2: What procedures should be performed by the TCC/Refund Processing Office to 

prevent double claim of ìout-of-periodî input taxes? 

A-2: To ensure that ìout-of-periodî input taxes are not claimed again in any period other 

than the period covered by the claim, the processing office should mandatorily: 

a. Assign the verification of claims of a taxpayer for the four (4) quarters of a 

taxable year to only one group; 

b. Ensure that the input taxes being claimed were recorded in the books under 

the asset account ìInput Taxesî; and 

c. Cancel original invoices/receipts before release of the TCC/Refund. 

Q-3: There are cases where sales transactions of the suppliers of exporters-claimants 

were already considered as effectively zero-rated by virtue of BIRís approval of 

their application for zero-rating. Notwithstanding such approval, these suppliers still 

issued VAT invoices, which become the sources of the claim for tax credit. Will these 

input taxes be denied/disallowed or shall the corresponding output taxes be assessed 

against the suppliers? 

A-3: When the supplier has an approved application for effectively zero-rating on its sale to 

the exporter-claimant, the claimant should be aware that the invoices and receipts from that 

supplier should not carry any VAT component. With an approved zero-rating from the BIR, 

the supplier will report its sales as zero-rated. 

In case the supplier alleges that it reported such sale as a taxable sale, the substantiation 

of remittance of the output taxes of the seller (input taxes of the exporter-buyer) can only 

be established upon the thorough audit of the suppliersí VAT returns and corresponding 

books and records. It is, therefore, imperative that the processing office recommends to the 

concerned BIR Office the audit of the records of the seller. 

In the meantime, the claim for input tax credit by the exporter-buyer should be denied 

without prejudice to the claimantís right to seek reimbursement of the VAT paid, if any, from 

its supplier. 

Q-4. In the course of the processing of the claims, there are instances where deficiency 

assessments are found due from the claimant by the Tax and Revenue Group 

(TRG) of the One-Stop Shop Tax Credit and Duty Drawback Center of the Department 

of Finance (OSS-DOF). Should the findings be offset against the claimed amount or 

should these be endorsed to the appropriate BIR office having jurisdiction over the 

taxpayer-claimant for issuance of assessment notice? 

A-4: If the assessment pertains to output VAT and compromise penalties related to VAT, the 

same shall be deducted from the claim. 

If, in the course of the verification of the claim, there are findings which would result to 

assessment of taxes other than VAT, the TRG should not deduct such assessments from the 

claim and instead, refer the assessment of other taxes to the concerned BIR office.

1244 


However, if the taxpayer is willing to pay such assessment, other than an assessment for 

withholding tax, or any unprotested delinquent account before the release of its TCC, it shall 

apply for a Tax Debit Memo which shall be charged off immediately against the TCC issued. 

The herein payment for the assessment of other taxes is just an advance payment of deficiency 

tax and therefore, without prejudice to additional assessments that might be made by 

the appropriate BIR office. 

In case the delinquent account is protested, the office processing the claim should verify 

from the concerned BIR office if the taxpayerís protest has been granted based on sufficient 

legal ground/s. If not, then the assessment is final and executory and, therefore, the amount 

thereof should be deducted from the approved amount of tax credit through the issuance of a 

Tax Credit Memo. 

Q-5: Under Revenue Memorandum Circular (RMC) No. 74-99, purchases by PEZAregistered 

firms automatically qualify as zero-rated without seeking prior approval 

from the BIR effective October 1999. 

1) Will the OSS-DOF Center still accept applications from PEZA-registered 

claimants who were allegedly billed VAT by their suppliers before and during 

the effectivity of the RMC by issuing VAT invoices/receipts? 

2) In the event that the suppliers treated these transactions as zero-rated 

sales despite issuing VAT invoices/receipts, who shall be the subject of our 

assessment? 

A-5(1): If the PEZA-registered enterprise is paying the 5% preferential tax in lieu of all other 

taxes, the said PEZA-registered taxpayer cannot claim TCC or refund for the VAT paid on 

purchases. However, if the taxpayer is availing of the income tax holiday, it can claim VAT 

credit provided: 

a. The taxpayer-claimant is VAT registered; 

b. Purchases are evidenced by VAT invoices or receipts, whichever is applicable, 

with shifted VAT to the purchaser prior to the implementation of RMC No. 

74-99; and 

c. The supplier issues a sworn statement under penalties of perjury that it shifted 

the VAT and declared the sales to the PEZA-registered purchaser as taxable 

sales in its VAT returns. 

For invoices/receipts issued upon the effectivity of RMC No. 74-99, the claims for input 

VAT by PEZA-registered companies, regardless of the type or class of PEZA-registration, 

should be denied. 

A-5(2): In case the supplier issued VAT invoices/receipts without having been stamped of the 

word ìzero-ratedî but treated the same as zero-rated sales, the purchaser cannot generate 

any input VAT from the said transactions. 

Q-6: (1) Should passed-on VAT or input tax of the buyer, when part of a claim for 

refund or TCC by said buyer, be disallowed if the same was part of the output tax of 

the seller paid using sellerís Tax Credit Certificates (TCCs)?


(2) If a TCC is used to pay VAT on importation, can the input VAT on imported 

purchases be the subject of claim for refund or TCC? 

A-6 (1): If the supplier paid the VAT through a TCC, the same may be allowed as claim for 

input tax credit of the purchaser provided that the TCC originated from the payment of an 

internal revenue tax, and not a TCC from another agency. 

A-6(2): If the claimant pays VAT on importations using a BOC TCC which was recommended 

by the BIR/TRG for issuance, the same shall be allowed to be claimed by the importer/buyer 

as input tax credit. 

Q-7: When should the 2-year period for filing the claim for input tax credit be reckoned 

from: 1) the end of the taxable quarter when the transaction was made, or 2) the 

date of filing the VAT return? 

A-7: The claim may be filed within two (2) years after the close of the taxable quarter when 

the sales were made pursuant to Section 112 (A) of the Tax Code of 1997. 

For input taxes paid on capital goods imported or locally purchased, the claim may be 

filled within two years after the close of the quarter when the importation or purchases was 

made, pursuant to Section 112 (B) of the Tax Code of 1997. 

Q-8: With the full liberalization of the BSP rules on foreign exchange and trade transactions 

(CB Circular No. 1389 dated April 13, 1993 enunciated in RMC No. 57-97), the 

BIR requirement for full documentation of proofs of inward remittances of export 

proceeds should no longer be enforced. Accordingly, what should be the acceptable 

documentary requirements in the processing of claims for TCC/refund, specifically on 

offsetting arrangements? 

A-8: In the case of offsetting arrangements, the following documents should be required: 

a. Import documents which created liability accounts in favor of the foreign 

parent or affiliated company; 

b. Other contracts with the foreign or affiliated company that brought about the 

liabilities which were offset against receivables from export sales; 

c. Evidences of proceeds of loans, in case the claimant has received loans or 

advances from the foreign company; 

d. Documents or correspondence regarding offsetting arrangements; 

e. Confirmation of the offsetting arrangements by the heads of the business 

organizations involved; 

f. Documents to prove actual export of goods; 

g. Documents to prove that the sales are zero-rated sales. 

Q-9: The taxpayer did not maintain separate input tax account in its books of accounts 

(VAT on purchases is capitalized or charged to cost in full). During the succeeding 

period, the taxpayer made a journal entry setting up the input tax account 

and crediting expense/capitalized asset account. Can this input tax credit be claimed 

for TCC in the year when the said account was adjusted?

1246 


A-9: No. When input taxes have been capitalized or charged to expense, the same cannot be 

claimed as tax credit during any taxable year, notwithstanding any adjustment made during 

the succeeding taxable year. The input tax claim should always be recorded under the asset 

account ìInput Taxî in the books of the claimant, with full observance of the accounting 

principle of timeliness, before the same can be claimed as tax credit. 

Q-10: Should claims of taxpayers with no reported sales (companies on a pre-operating 

stage) filled with the Tax and Revenue Group of the One-Stop-Shop Duty Drawback 

Center, Department of Finance be denied? 

A-10: The Tax and Revenue Group of the One-Stop Shop Duty Drawback Center, Department 

of Finance has no jurisdiction to process such claims. Hence, the same should be 

denied by the OSS DOF but without prejudice to the filing thereof with the proper BIR Office. 

Claims for input taxes during the pre-operating stage should be filed with the BIR office 

where the taxpayer is registered. In processing the claim, the Revenue Office should determine 

if VAT was paid by the purchaser-claimant in the acquisition of property, plant and 

equipment, as well as other fixed assets. If not, the purchaser-claimant is not entitled to any 

input tax credit. 

Q-11: Should the claimant be penalized for non-indication of zero-rated sales in the 

VAT return? 

A-11: If the taxpayer did not reflect zero-rated sales in the VAT returns but it is claiming for 

tax credit or refund based on zero-rated sales, the Revenue Officer should mandatorily 

establish the existence of zero-rated sales from the audited financial statements, books of 

accounts, export invoices, bills of lading or airway bills and by comparing the reported sales 

against the output tax reflected in the VAT return. When zero-rated sales have been determined 

despite the fact that the specific amounts were not categorically reflected in the VAT 

return, the claim may be processed upon sufficient proof of its existence but, at the same 

time, the taxpayer shall be imposed a compromise penalty for not supplying the correct 

information. 

Q-12: Is interest income on loan subject to VAT? 

A-12: If the taxpayer qualifies as a lending investor, dealer in securities, financial institution 

as defined in Revenue Regulations No. 12-2003, or another entity performing similar financing 

activities, interest income is subject to VAT. 

Q-13: Should penalty be imposed on TCC application for failure of claimant to comply 

with certain invoicing requirements, (e.g., sales invoices must bear the TIN of the 

seller)? 

A-13: Failure by the supplier to comply with the invoicing requirements on the documents 

supporting the sale of goods and services will result to the disallowance of the claim for input 

tax by the purchaser-claimant. 

If the claim for refund/TCC is based on the existence of zero-rated sales by the taxpayer 

but if fails to comply with the invoicing requirements in the issuance of sales invoices (e.g. 

failure to indicate the TIN), its claim for tax credit/refund of its customers does not depict its


being a VAT-registered taxpayer whose sales are classified as zero-rated sales. Nonetheless, 

this treatment is without prejudice to the right of the taxpayer to charge the input taxes to 

the appropriate expense account or asset account subject to depreciation, whichever is 

applicable. Moreover, the case shall be referred by the processing office to the concerned 

BIR office for verification of other tax liabilities of the taxpayer. 

Q-14: If the Taxpayer Identification Numbers (TIN) of claimantís suppliers are not 

found in the BIRís database, should the invoices/receipts issued by such suppliers to 

the claimant be disallowed? 

A-14: If the claimantís suppliers are not found in the BIRís database, the input taxes on the 

purchases from said suppliers may be allowed on the following conditions: 

a. The claimant submits a certified true copy of the BIR registration certificate of 

the supplier certified as such by a duly designated responsible officer of the 

organization; 

b. The purchases are evidenced by valid VAT invoices/receipts (printed and 

issued in accordance with Sections 237, 238 and 113 of the Tax Code of 1997); 

and 

c. The concerned Revenue District Officer issues a certification on the authenticity 

of the BIR Registration of the supplier. 

Q-15: The claimant is a VAT-registered enterprise which is a member of PEZA and 

whose sales are strictly for export. If this claimant issues sales invoices where the 

letters ìNVî are printed, will this claimant be entitled to input tax credit for the VAT it 

paid on purchase of raw materials and supplies? 

A-15: No. Sales invoices which are marked ìNVî are considered non-VAT sales invoices 

and are being issued by a non-VAT taxpayer. This type of invoice is outside of the VAT 

system. Such being the case and since the invoice the seller is issuing does not confirm its 

allegation that it is a VAT taxpayer, it is not qualified to claim input tax credit on its purchases. 

While the claim shall be denied, this is without prejudice to the right of the taxpayer to charge 

the input taxes to the appropriate expense account or asset account subject to depreciation, 

whichever is applicable. 

Q-16: Can the TCC processing office accept supporting documents of claimant companies 

which were issued denial letters, or letters of denial of claim due to absence of 

certain documents? 

A-16: Taxpayers whose claims were denied due to failure to submit supporting documents 

are given a period of thirty (30) days from receipt of the letter of denial to file a request for 

reconsideration and to submit the required documents to the Tax and Revenue Group, OSS- 

DOF or to other concerned BIR offices which issued the denial letter. 

Q-17: If a claim submitted to the Court of Tax Appeals for judicial determination is 

denied by the CTA due to lack of documentary support, should the corresponding 

claim pending at the BIR offices be also denied?

1248 


A-17: Generally, the BIR loses jurisdiction over the claim when it is filed with the CTA. Thus, 

when the claim is denied by the CTA, the BIR cannot grant any tax credit or refund for the 

same claim. However, cases involving tax credit/refund claims, which are archived in the 

CTA and have not been acted upon by the said court, may be processed by the concerned 

BIR office upon approval of the CTA to archive or suspend the proceeding of the case 

pending in its bench. 

All revenue officials concerned are requested to give this Circular as wide a publicity 

as possible. 





--o0o-- 


Amending Certain Provisions of Revenue Memorandum Circular (RMC) 

No. 13-2003 Regarding the Issuance of Letters of Authority 

(LA)/Audit Notices (AN)/Tax Verification Notices (TVN) Covering the Audit/ 

Verification of Taxpayersí Tax Returns/Tax Liabilities and Providing 

for Clarificatory Guidelines on the Submission of Reports of Investigation 

and Status Reports of Pending Cases as Well as On the Handling 

of Cases Issued Under RMC 13-2003 

Certain provisions of and guidelines set forth in RMC 13-2003 relative to the issuance 

of Letters of Authority (LA)/Audit Notices (AN) or Tax Verification Notices (TVN) covering 

covering the audit/verification of tax returns/tax liabilities as provided for under paragraphs 

III.1.a, III.1.b and III.2 thereof are amended as discussed hereunder. Moreover, guidelines 

on the submission of reports of investigation and status reports of pending cases as well as 

on the handling of cases issued under RMC 13-2003 are clarified for easy compliance. 

I. Amendment to Certain Provisions of RMC 13-2003. 

A.) Paragraph III.1 a is hereby revised as follows: 

a. Claims for income tax refund or issuance of tax credit certificate or in cases of 

income tax returns showing carry-over of excess withholding tax or quarterly 

income tax payments of corporate taxpayers, irrespective of amount, and claims 

for income tax refund or issuance of tax credit certificate or in cases of income 

tax returns showing carry-over of excess withholding tax or quarterly income tax 

payments of individuals exceeding One Hundred Thousand Pesos (P100,000.00), 

which will require the audit/investigation of taxpayerís income, including withholding 

tax liabilities, for the covered period;


B.) Paragraph III.1.b is hereby revised as follows: 

b. Claims for VAT refund or issuance of tax credit certificate or in cases of VAT 

returns showing excess input tax at the end of the taxable period exceeding One 

Hundred Thousand Pesos (P100,000.00), which will require the specific audit/ 

investigation of the VAT liabilities only for the covered period; 

C.) Paragraph III.2 is hereby amended as follows: 

Letters of Authority/Audit Notices for the above exceptions shall be issued by the Regional 

Director unless otherwise directed by the Commissioner. It is reiterated however, that, 

TVNs shall continue to be signed by the Revenue District Officer in the following instances: 

a. Claims for income tax refund or issuance of tax credit certificate or in cases of 

income tax returns showing carry-over of excess withholding tax or quarterly 

income tax payments of individuals amounting to One Hundred Thousand Pesos 

(P100,000.00) and below, which will require the verification of taxpayerís income, 

including withholding tax liabilities, for the covered period; 

b. Claims for VAT refund or issuance of tax credit certificate or in cases of VAT 

returns showing excess input tax at the end of the taxable period amounting to 

One Hundred Thousand Pesos (P100,000.00) and below, which will require the 

specific verification of the VAT liabilities only for the covered period; 

c. Claims for tax credit/refund of excise tax under Title VI of the NIRC of 1997, 

regardless of amount; 

d. Claims for tax credit/refund on erroneous/double payment of taxes, regardless 

of amount; 

e. Taxpayers who are retiring from business with gross assets of P10,000,000.00 

and below; and 

f. Protested cases/cases for reinvestigation. 

The above policies are consistent with the ruling in the case of San Carlos 

Milling Co., Inc. vs. Commissioner of Internal Revenue and Court of Appeals 

(G.R. No. 103379 dated November 23, 1993) stating to the effect that, no tax 

refund or credit shall be granted unless the taxpayer-claimantsí entitlement thereto 

has been first duly established through prior audit or verification. 

II. Additional Guidelines to the Policies Laid Down in RMC No. 13-2003. 

1. As a clarification on the submission of reports of investigation/audit reports (dockets) or 

return of audit cases pursuant to Sec. III.3 of RMC No. 13-2003, prescribing cases shall, in 

all instances, be covered by reports of investigation whereas LAs/ANs or TVNs previously 

issued covering the audit/verification of cases under mandatory audit shall be continued for 

audit/verification and shall be reported within the required timeframe for audit cases handled 

under normal circumstances.

1250 


2. A Summary List of Unfinished Cases as of May 31, 2003 per Revenue District Office, as 

well as cases handled by the Special Investigation Division, if any, as allowed under applicable 

revenue issuance, shall be submitted by the concerned Regional Director, through the 

Deputy Commissioner-Operations Group, to the Commissioner within fifteen (15) days from 

the approval of this Order, copy-furnished the Deputy Commissioner-Legal and Inspection 

Group. The list shall contain the following information: 

a. LA/TVN/MO number; 

b. LA/TVN/MO date; 

c. Name of taxpayer; 

d. TIN of taxpayer; 

e. Year covered; 

f. Tax type covered; 

g. Name of Revenue Office assigned; 

h. Status of the case; and 

i. Reason for the failure to terminate the case. 

A copy thereof shall be forwarded to the Assistant Commissioner, Assessment Service 

for recording purposes and to the Assistant Commissioner, Inspection Service for the conduct 

of performance audit thereon. 

III. Handling of Cases Issued under RMC 13-2003. 

LAs/ANs/TVNs already issued under RMC No. 13-2003 shall remain in force and the 

cases shall be pursued by the concerned Revenue District Offices following the guidelines 

set forth in RMO No. 13-2002. 





Background 

(SGD.) GUILLERMO L PARAYNO, JR. 

Commissioner of the Internal Revenue 

--o0o-- 


Use of Head Office Receipts/Invoices by Branches 

Pursuant to Revenue Memorandum Order (RMO) No. 28-2002, the processing of the 

application for Permit to Print Receipts, Sales or Commercial invoices to be used or issued 

at the business premises of the taxpayerís Head Office and all its branches nationwide as 

well as the issuance of such permit shall be at the Revenue District Office (RDO) or con-


cerned office under the Large Taxpayers Service having jurisdiction over the taxpayerís 

Head Office. However, each establishment (head office or branch) shall be covered by one 

application for permit to print receipts/invoices and be issued separate permit to print receipts/invoices 

with mention of the range of the serial numbers that would be printed on the 

invoices/receipts. In short, each establishment will have its own independent series of invoices 

serial number. Despite these guidelines, a number of branches continue to use the 

receipts/invoices of its head office as evidenced by the TIN Code-000 (last three digits of the 

TIN) and the address (of the head office) reflected thereon. This practice resulted to the 

apprehension (e.g.confiscation of receipts/invoices) and imposition of penalties by the 

RDOs which according to the taxpayers greatly affected their business operation. 

Policies and Guidelines 

So as not to hinder business operation and create inconvenience to the taxpayers and 

at the same time ensure collection of correct taxes thru the issuance of receipts/invoices the 

following guidelines shall be observed: 

1. Branches currently issuing receipts/invoices issued to their head office shall be allowed to 

use the same until December 31, 2003. Thereafter, no further extension shall be allowed. The 

receipts/invoices referred to under this issuance shall only pertain to the existing unused/ 

inventory. 

2. Taxpayers already adopting the existing procedures prescribed under RMO No. 28-2002 

are not covered by this issuance. 

All internal revenue officers and others concerned are enjoined to give this Circular as 






--o0o-- 


Amending Answer to the Question Number 17 of Revenue Memorandum 

Circular No. 42-2003 and Providing Additional Guidelines on Issues 

Relative to the Processing of Claims for Value-Added Tax (VAT) 

Credit/Refund, Including Those Filed with the Tax and Revenue Group, 

One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center, 

Department of Finance (OSS-DOF) by Direct Exporters 

In response to request of selected taxpayers for adoption of procedures in handling 

refund cases that are aligned to the statutory requirements that refund cases should be 

elevated to the Court of Tax Appeals before the lapse of the period prescribed by law, certain 

provisions of RMC No. 42-2003 are hereby amended and new provisions are added thereto.

1252 


In consonance therewith, the following amendments are being introduced to RMC No. 

42-2003, to wit: 

I. A-17 of Revenue Memorandum Circular No. 42-2003 is hereby revised to read as 

follows: 

In cases where the taxpayer has filed a ìPetition for Reviewî with the Court of Tax 

Appeals involving a claim for refund/TCC that is pending at the administrative agency (Bureau 

of Internal Revenue or OSS-DOF), the administrative agency and the tax court may act 

on the case separately. While the case is pending in the tax court and at the same time is still 

under process by the administrative agency, the litigation lawyer of the BIR, upon receipt of 

the summons from the tax court, shall request from the head of the investigating/processing 

office for the docket containing certified true copies of all documents pertinent to the claim. 

The docket shall be presented to the court as evidence for the BIR in its defense on the tax 

credit/refund case filed by the taxpayer. In the meantime, the investigating/processing office 

of the administrative agency shall continue processing the refund/TCC case until such time 

that a final decision has been reached by either the CTA or the administrative agency. 

If the CTA is able to release its decision ahead of the evaluation of the administrative 

agency, the latter shall cease from processing the claim. On the other hand, if the administrative 

agency is able to process the claim of the taxpayer ahead of the CTA and the taxpayer 

is amendable to the findings thereof, the concerned taxpayer must file a motion to withdraw 

the claim with the CTA. A copy of the positive resolution or approval of the motion must be 

furnished the administrative agency as a prerequisite to the release of the tax credit certificate/tax 

refund processed administratively. However, if the taxpayer is not agreeable to the 

findings of the administrative agency or does not respond accordingly to the action of the 

agency, the agency shall not release the refund/TCC unless the taxpayer shows proof of 

withdrawal of the case filed with the tax court. If, despite the termination of the processing of 

the refund/TCC at the administrative level, the taxpayer decides to continue with the case 

filed at the tax court, the litigation lawyer of the BIR, upon the initiative of either the Legal 

Office or the Processing Office of the Administrative Agency, shall present as evidence 

against the claim of the taxpayer the result of investigation of the investigating/processing 

office. 

II. Additional paragraphs are hereto added to the last paragraph of RMC No. 42-2003 

to read as follows: 

Q-18: For pending claims with incomplete documents, what is the period within which 

to submit the supporting documents required by the investigating/processing office? 

When should the investigating/processing office officially receive claims for tax credit/ 

refund and what is the period required to process such claims? 

A-18: For pending claims which have not been acted upon by the investigating/processing 

office due to incomplete documentation, the taxpayer-claimants are given thirty (30) days 

within which to submit the documentary requirements unless given further extension by the 

head of the processing unit, but such extension should not exceed thirty (30) days. 

For claims to be filed by claimants with the respective investigating/processing office of 

the administrative agency, the same shall be officially received only upon submission of 

complete documents.


For current and future claims for tax credit/refund, the same shall be processed within 

one hundred twenty (120) days from receipt of the complete documents. If, in course of 

the investigation and processing of the claim, additional documents are required for the 

proper determination of the legitimate amount of claim, the taxpayer-claimants shall submit 

such documents within thirty (30) days from request of the investigating/processing office, 

which shall be construed as within the one hundred twenty (120) day period. 







--o0o-- 


Clarifying the Venue for Payment of Capital Gains Tax/Creditable 

Expanded Withholding Tax and Corresponding Documentary Stamp 

Tax Relative to the Sale of Real Properties by Insurance Companies 

Pursuant to the Memorandum of Agreement (MOA) issued and signed in 1998 between 

the Insurance Commission (IC) and the Bureau of Internal Revenue (BIR), the filing of the 

returns and payment of premium tax, documentary stamp tax, value-added tax and income 

tax of all insurance companies shall be serviced by one bank located at or near the IC, which 

happened to be the Land Bank of the Philippines, U.N. Avenue Branch. With the implementation 

of this provision in the MOA, it has been misconstrued by some insurance companies 

that all taxes including capital gains tax (CGT)/creditable expanded withholding tax (EWT) 

and documentary stamp tax (DST) relative to the sale of real properties should be paid at the 

same venue. As provided under Revenue Regulations No. 8-98 and other pertinent internal 

revenue issuances, the internal revenue taxes pertaining to the sale of real properties shall 

be paid to an accredited agent bank (AAB) within the jurisdiction of a Revenue District Office 

(RDO) where the property being transferred is located or in areas where there are no AABs, 

to the Revenue Collection Officer (RCO) of the RDO having jurisdiction over the location of 

the property. 

The confusion as to the venue of payment of CGT/EWT and DST by the aforesaid 

taxpayers resulted to the non-isuance of the Tax Clearance Certificate (TCL) and/or Certificate 

Authorizing Registration (CAR) by the concerned RDO unless and until the penalties 

due to payment at the wrong venue have been settled in full by these taxpayers. In order to 

address this problem, the penalties on violations of this nature committed by insurance 

companies from the effectivity of the MOA but prior to the issuance of this Circular are 

hereby waived.

1254 


However, for future transactions, all insurance companies are hereby advised to observe 

strictly the provisions of Revenue Regulations No. 8-98, as amended, and cause the 

payment of the CGT/EWT and corresponding DST on the sale of real properties to an AAB 

under the jurisdiction of the RDO where the property is located or, in areas where there are 

no AABs to the RCO of the RDO having jurisdiction over the location of the property. 

Violation of the rule on venue hereafter committed shall require the imposition of surcharge 

and other penalties imposable under existing laws. 







--o0o-- 

Revenue Memorandum Order No. 15-2003 

Policies, Guidelines and Procedures in the Processing and 

Monitoring of One-Time Transactions (ONETT) and the 

Issuance of Certificates Authorizing Registration (CARs) 

Covering Transactions Subject to Final Capital Gains Tax 

on Sale of Real Properties Considered as Capital Assets as 

Well as Capital Gains Tax on the Net Capital Gain 

on Sale, Transfer or Assignment of Stocks Not Traded 

in the Stock Exchange(s), Expanded Withholding Tax on 

Sale of Real Properties Considered as Ordinary Assets, 

Donorís Tax, Estate Tax and Other Taxes Including 

Documentary Stamp Tax Related to the Sale/Transfer of Properties 


(Text Available at Office of the National Administrative Register, 

U.P. Law Complex, Diliman, Quezon City) 


--o0o-- 

Revenue Memorandum Order No. 23-2003 

Guidelines Regarding Revalidation and 

Conveyance of Tax Credit Certificates


Reports have been received and cases discovered that fake/used/cancelled Tax Credit 

Certificates (TCCs) are being offered for sale as valid outstanding TCCs. To protect the 

public from these criminal elements operating to defraud buyers of TCCs and the government, 

the following instructions are hereby issued: 

1. Holders of all transferred TCCs, including those that have been partially utilized, must be 

presented for revalidation to the TCC Revalidation Committee, Office of the Commissioner 

between 1 to 31 July 2003. Transferred TCCs not submitted for revalidation within the period 

may still be presented for utilization but these will first go through an extensive investigation 

unlike the regular process at the Office of the Commissioner; 

2. All prospective buyers of TCCs, must obtain an Authorization to Purchase TCCs from the 

TCC Revalidation Committee, Office of the Commissioner. An Authorization Database will be 

created against which all transferred TCCs will be validated before any Tax Debit Memo 

(TDM) is issued for its application. The processing of any TDM application against a TCC not 

in the database will be held in abeyance until completion of investigation by the TCC Revalidation 

Committee. Authorization to Purchase will be valid for a period of forty five (45) days 

from date of issuance. 

For strict compliance. 




BUREAU OF HEALTH FACILITIES AND SERVICES 

Date Filed: 14 July 2003 

Implementing Rules and Regulations Governing Accreditation 

of Drug Testing Laboratories in the Philippines* 

(As Revised) 

SECTION 1. Scope - These rules and regulations embodied herein shall apply to all 

government and private drug testing laboratories in the Philippines. 

SECTION 2. Authority - These rules and regulations are issued to implement the 

provisions of Republic Act 9165: ìComprehensive Dangerous Drugs Act of 2002î consistent 

with Executive Order 102 s. 1999: ëRedirecting the Functions and Operations of the Department 

of Healthî. 

*Also filed by Dangerous Drugs Board on 12 Sept 2003 under Board Regulation No. 2, s. 

2003.

1256 


SECTION 3. Definition of Terms: 

Accreditation refers to the formal authorization issued by the DOH to an individual, 

partnership, corporation or association which has complied with all licensing requirements 

(input/structural standards) and accreditation requirements (process standards and outcome/output/impact 

standards) as prescribed in the Manual of Operations for Drug Testing 

Laboratories issued by the DOH. 

Act refers to Republic Act No. 9165, ìThe Comprehensive Dangerous Drugs Act of 

2002î. 

Applicant refers to the owner or head of laboratory that is applying for the issuance of 

accreditation. 

Applications Service Provider refers to third party entities that manage and distribute 

software-based services and solutions to customers across a wide area network from a 

central data center. 

Bureau refers to the Bureau of Health Facilities and Services of the DOH. It shall 

exercise the regulatory function. 

Bureau Director refers to the Director of the Bureau of Health Facilities and Services. 

Chain of Custody refers to procedures to account for each specimen by tracking its 

handling and storage from point of collection to final disposal. These procedures require that 

the applicantís identity is confirmed and that a Custody and Control Form is used from time 

of collection to receipt by the laboratory. Within the laboratory, appropriate chain of custody 

records must account for the samples until disposal. 

Custody and Control Form refers to the form used to document the procedures from 

time of collection until receipt by the laboratory. 

CHD refers to the Center for Health Development, which is the DOH Regional Field 

Office. 

Client/Donor refers to the individual from whom a specimen is collected. 

Confirmatory Test refers to the analytical procedure to identify and quantify the presence 

of a specific drug or metabolite, which is independent of the initial test and which uses 

a different technique and chemical principle from that of the screening test in order to 

ensure reliability and accuracy. 

Cut Off refers to the concentration level set to determine whether the sample is positive 

or negative for the presence of a drug. 

Dangerous Drugs include those listed in the schedule annexed to the Act and its 

implementing rules and regulations. 

DOH refers to the Department of Health.


Laboratory refers to a private or government facility that is capable of testing a specimen 

to determine the presence of dangerous drugs therein. 

NRL refers to the National Reference Laboratory for Environmental and Occupational 

Health, Toxicology and Micronutrient Assay designated by the Secretary of Health. It is a 

laboratory capable of doing screening and confirmatory laboratory services, training, and 

surveillance and external quality assurance program for laboratory tests. Whenever the drug 

testing laboratory result is challenged, the NRL shall make the final decision. 

Procedure Manual refers to the written document giving detailed steps to be followed 

when undertaking a particular task. 

Screening Test refers to a test to eliminate negative specimen from further consideration 

and to identify the presumptively positive specimen that requires confirmatory testing. 

Secretary refers to the Secretary of Health. 

Specimen refers to the body fluid that is collected from a person. 

SECTION 4. Classification of Drug Testing Laboratories - Drug testing laboratories 

shall be classified according to: 

1. Ownership 

1.1 Government - operated and maintained partially or wholly by the national, 

provincial, city or municipal government, or other political unit, or by any department, 

division, board or agency thereof. 

1.2 Private - privately owned, established and operated with funds through donation, 

principal, investment or other means, by any individual, corporation, association 

or organization. 

2. Institutional Character 

2.1 Institution-based - a laboratory that is located within the premises and operates 

as part of an institution (e.g. hospital, medical facilities for overseas workers 

and seafarers). 

2.2 Freestanding - a laboratory that is located outside the premises of an institution 

and operates independently. 

3. Service Capability 

3.1 Screening Laboratory - a laboratory capable of performing screening tests. 

3.2 Confirmatory Laboratory - a laboratory capable of performing qualitative and 

quantitative examinations of dangerous drugs from the specimen. 

SECTION 5. Client/Donor of Drug Testing Laboratories - As enumerated and described 

in R.A. 9165 Article III Section 36 the following persons shall undergo drug testing:

1258 National Administrative Register Volume 14/3 

Mandatory Drug Testing Random Drug Testing 

a. Applicants for driverís license. a. Students of secondary and tertiary schools. 

b. Applicants for firearmís license. b. Officers and employees of public and private 

c. Officers and members of the military, offices whether domestic or overseas. 

police and other law enforcers. 

d. Persons charged before the prosecutorís 

office with a criminal offense having an 

imposable penalty of imprisonment of not 

less than six (6) years and one (1) day. 

e. Candidates for public office whether 

appointee or elected both in the national 

or local government. 

f. Persons apprehended or arrested for 

violating the provisions of this Act. 

SECTION 6. Technical Requirements for Accreditation: 

The laboratory to be able to secure a DOH certificate of accreditation must comply 

with the following technical requirements: 

1. Physical Plant 

1.1 Screening Laboratory - shall have at least twenty (20) square meters in floor 

area. The work area must be ten (10) square meters with exhaust fan, sink and 

storage cabinet. 

1.2 Confirmatory Laboratory - shall have at least sixty (60) square meters in floor 

area. The clinical work area must be thirty (30) square meters with exhaust fan, 

sink, stock room and instrumentation room. 

A laboratory of whatever category shall have within its premises an area which 

can receive or accommodate at least five (5) prospective clients/donors at a 

given time, hand washing facility, toilet facility, and stall for the orderly collection 

of specimen. 

A DOH-licensed hospital or non-hospital based Secondary or Tertiary Category 

Clinical Laboratory, which intends to put up a Screening Laboratory for Drug 

Testing, need not provide an additional twenty (20) square meters to its existing 

floor area. It shall only designate an area for drug testing within the clinical laboratory. 

2. Headship of the Laboratory 

The screening laboratory shall be headed by a licensed physician with certification 

in Clinical Pathology from the Philippine Board of Pathology or certification 

in Clinical Laboratory Management Training conducted by the DOH. 

The maximum number of screening laboratories a physician trained in Clinical 

Laboratory Management can handle is ten (10), provided that they are physically 

feasible (within 5 kilometer radius) to supervise.


In cases where the screening drug-testing laboratory is a division, section, or unit 

of a Clinical Laboratory, it shall be headed either by a licensed physician, chemist, 

medical technologist, pharmacist or chemical engineer. 

The confirmatory laboratory shall be headed by a licensed physician certified in 

Clinical Pathology by the Philippine Board of Pathology with at least two (2) years 

of active laboratory experience in analytical toxicology or a licensed chemist with 

at least a Masterís Degree in Chemistry, Biochemistry or a branch of Chemistry 

and at least two (2) years of active laboratory experience in analytical chemistry. 

The head of the laboratory shall have training and/or experience in the theory and 

practice of the procedures used in laboratories, resulting in his or her thorough 

understanding of quality control procedures and practices; the review, interpretation 

and reporting of test results; the maintenance of chain of custody and proper 

remedial actions to be taken in response to test systems being out of control limits 

or quality control results. 

The laboratory head shall have the overall responsibility for the professional, 

organizational, educational and administrative activities of the drug testing facility. 

3. Personnel 

A laboratory shall have the following technical staff: 

3.1 Screening Laboratory - shall have either a full time licensed chemist, medical 

technologist, pharmacist or chemical engineer with appropriate training in screening 

test procedures for dangerous drugs. The DOH shall recognize the training program. 

3.2 Confirmatory Laboratory - shall have a full time licensed chemist, who has 

successfully completed extensive and appropriate training in chromatography, 

spectroscopy and either a medical technologist, pharmacist or chemical engineer 

with appropriate training in the screening test procedure for dangerous 

drugs. The DOH shall recognize the training program. The laboratory staff of 

Confirmatory Laboratory shall be required to pass a proficiency test, which is to 

be established and administered by the NRL. 

A laboratory shall have administrative or non-technical personnel who shall have 

the necessary training and skills for the tasks assigned to them. 

4. Laboratory Equipment 

A laboratory shall be required to have the following equipment: 

4.1 Screening Laboratory - shall have the necessary equipment or kit for 

screening tests in addition to the basic equipment (refer to Annex A). 

4.2 Confirmatory Laboratory - shall have the necessary equipment for screening, 

qualitative and quantitative examinations in addition to the basic equipment 

(refer to Annex A).


5. Information Technology Requirements 

5.1 The laboratory shall maintain a set of information technology equipment whose 

specification shall conform to the minimum requirement set by the DOH (see 

Annex A). 

5.2 The laboratory shall have access to one duly authorized Application Service 

Provider (ASP) approved and maintained by the DOH selected through competitive 

bidding following existing government rules and regulations. The DOH shall 

formulate the Terms of Reference/Request for Proposal for the selection of the 

Application Service Provider subject to the approval for the Dangerous Drugs 

Board. 

6. Records 

The laboratory shall maintain a record of all its personnel. These records shall 

include the resume of training and experience, certification or license, incident 

reports (if any) and such other information, which will establish the competence 

of the employee. 

The laboratory must maintain and make available for an agreed period, documentation 

of all aspects of the testing process involved in the generation of a positive 

result. 

The required documentation must include: 

1. Training records on all individuals authorized to have access to samples 

2. Custody and Control Forms 

3. Quality assurance/quality control records 

4. All data including calibration curves and any calculations used in determining 

test results. 

5. Reports 

6. Records of performance testing and computer generated data 

The laboratory will be required to maintain documents for any sample under legal 

challenge for a further agreed period. 

7. Security 

A laboratory shall have security measures to control access to the premises and to 

ensure that only authorized personnel handle or have access to specimens or can gain 

access to laboratory processes or to areas where records are stored. With the exception of 

duly authorized representative of the Bureau, all authorized visitors, maintenance and service 

personnel shall be escorted at all times while inside the laboratory. The laboratory shall 

maintain a record that indicates the date, time of entry and exit and purpose of entry of nonemployees. 

8. Chain of Custody 

A laboratory shall use documented chain of custody procedures to maintain control 

and accountability of specimens. The date and purpose shall be recorded on an appropriate 

Custody and Control Form each time a specimen is handled or transferred and every indi-


vidual in the chain shall be identified. Accordingly, authorized collection staff shall be responsible 

for each specimen in their possession and shall sign and complete the Custody 

and Control Forms. 

The minimum information required on the Custody and Control Form are the following: 

1. Information identifying the specimen 

2. Date and time of collection 

3. Name of testing laboratory. 

4. Name and signatures of all individuals who had custody of the sample during the 

collection process. 

9. Storage of Laboratory Reports and Specimens 

Reports pertaining to specimens shall be kept by the testing laboratory for a minimum 

period to be determined by the DOH. Specimens with confirmed positive test results, which 

are not challenged within fifteen (15) days after receipt, shall be discarded. A specimen may 

be kept for a maximum of one (1) year upon request. 

10. Test Levels 

The Bureau, until such time that the NRL is established and operational shall require 

each laboratory to submit its protocol indicating the initial cut-off levels in screening specimens 

to determine whether they are negative or for confirmation of the presence of dangerous 

drugs. The acceptability of the cut off levels shall depend on the methods used by the 

laboratory, its equipment and registered testing kits. 

11. Procedure Manual 

A laboratory shall have a procedure manual validated by the NRL which shall include 

the principles of each test, the preparation of reagents, standards and controls, calibration 

procedures, derivation of results, linearity of methods, sensitivity of the methods, cut-off 

values, mechanisms for reporting results, control criteria for unacceptable specimens and 

results, remedial actions to be taken when the test systems are outside of acceptable limits, 

reagent expiration dates, references and quality control measures. Copies of all procedures 

and dates on which they are in effect shall be maintained as part of the manual. 

12. Equipment and Instruments 

Volumetric pipettes and measuring devices shall be certified for accuracy or be checked 

by gravimetric, colorimetric or other verification procedures by the Department of Science 

and Technology - Industrial Technology Development Institute. Automatic pipettes and dilutors 

shall be checked for accuracy and reproducibility before being placed in service and 

checked periodically. Thereafter, there shall be written procedures for instruments set-up 

and normal operations, a schedule for checking critical operating characteristics, tolerance 

limits for acceptable function checks, and instructions for major troubleshooting and repair. 

Preventive maintenance records shall be kept. 

13. Calibrators and Controls

1262 


Laboratory calibrators and controls shall be prepared using pure drug reference materials, 

stock standard solutions obtained from other laboratories, or standard solutions obtained 

from commercial manufacturers. The calibrators and controls shall be properly labeled 

as to content and concentration. The standards (e.g. pure reference standards, stock 

standards solutions, purchased standards) shall be labeled with the following: date received 

(if applicable); date prepared or opened; date placed in service and expiration date. 

14. Urine Specimen Collection, Handling and Disposal 

The laboratory shall follow the DOH prescribed guidelines in the collection, handling 

and disposal of urine specimens. Universal precaution shall be observed at all times. 

15. Laboratory Report 

15.1 Screening test result form - the test result of an accredited laboratory shall 

be in the form prescribed by the DOH. 

15.2 Signatory of test result -a screening test result shall be reported as negative 

or positive. A confirmatory test shall report the presence or absence and the 

identity of the drug/metabolite tested as well as its concentration. 

15.3 Reporting test results - a screening test result shall be reported as negative 

or postive. A confirmatory test shall report the presence or absence and the 

identity of the drug/metabolite tested as well as its concentration. 

The original copy of the test result form shall be given to the client/donor 

immediately upon its completion. All specimens with positive screening test results 

shall be submitted for confirmation before a final report will be issued. Other 

copies of the said test result form shall be furnished immediately to the DOH and 

the requesting agency. The drug-testing laboratory shall retain one copy. 

The test results that are forwarded to the DOH shall include the membrane of the 

registered drug testing kit in the case of screening tests and a copy of the chromatogram 

in the case of confirmatory tests. 

15.4 Access to laboratory test results - the drug test result and the records shall 

be confidential subject to the usual accepted practices to protect the confidentiality 

of the test results. 

16. Proficiency Testing 

16.1 The NRL shall conduct a continuing assessment of the proficiency of Screening 

and Confirmatory Laboratories. All procedures associated with the handling 

and testing of the proficiency-testing sample shall to the greatest extent possible 

be carried out in a manner identical to that applied to routine specimens, unless 

otherwise specified. 

16.2 Results of proficiency test. The laboratory shall submit to the NRL the results 

of the test performed on the unknown sample within three (3) weeks after the 

receipt of the test sample. Said results shall be kept confidential.


16.3 Failure to pass proficiency test. A laboratory that fails to pass proficiency 

test conducted by the NRL shall be given another test not earlier than one (1) 

month after the failed test. However, failure to pass proficiency test shall result in 

the suspension of its accreditation. Such suspension shall be lifted only after 

passing the second proficiency test. Failure to pass the second proficiency test 

shall result in the revocation of its accreditation. 

SECTION 7. Validity of the Test Result: 

The drug test certificates on tests performed by accredited drug testing centers shall 

be valid for one (1) year period from the date of issue, which may be used for other purposes. 

SECTION 8. Allowable Service Fees: 

The drug-testing laboratory may collect a reasonable service fee for the performed 

examination, which shall not be greater than the maximum allowable service fee prescribed 

by the DOH. The maximum allowable service fees shall be adjusted from time to time. 

SECTION 9. Procedural Guidelines for Accreditation: 

The applicant shall follow these procedures for application of initial certificate of accreditation: 

1. Applicant accomplishes the required documents and submits them to the Bureau or CHD 

for endorsement to the Bureau. Upon filing of application, the applicant pays the corresponding 

fees to the Cashier of the DOH in person, or through postal money order. 

Documentary Requirements: 

1.1 BHFS Application Form - filed either at the Bureau or CHD 

1.2 Letter of Endorsement to the Bureau Director (if filed at the CHD) 

1.3 DTI/SEC Registration (for private laboratory) 

Enabling Act (for national government laboratory) 

Approved Board Resolution ( for local government laboratory) 

1.4 Mayorís Permit 

1.5 One (1) set of Floor Plan showing specific location of equipment and work 

areas required, appropriately dimensioned, properly identified and completely 

labeled. It shall be signed and sealed by an architect or engineer. 

1.6 List of Personnel, notarized, including photocopies of current PRC identification 

cards and certificates of training 

1.7 List of Equipment with specifications 

1.8 Contract of lease (if facility is rented) 

1.9 Procedure Manual 

1.10 Custody and Control Form 

The following requirements shall be submitted within the first six (6) months of 

operation after issuance of initial certificate of accreditation:

1264 


1.11 Documentation of Quality Control Program (for screening laboratory) 

1.12 Certification for Quality Standard System from a DOH-recognized certifying 

body (for confirmatory laboratory) 

2. The Bureau conducts survey on site to determine compliance with standards and technical 

requirements of accreditation. 

3. The Bureau approves or disapproves the issuance of certificate of accreditation. 

3.1 If approved, the Bureau registers the laboratory and issues an initial certificate 

of accreditation to the applicant upon deposit of twenty thousand pesos 

(P20,000) cash bond. 

3.2 If disapproved, the Bureau sends the findings and recommendations to the 

applicant for compliance. Failure to comply within fifteen (15) days shall be a 

ground for denial of the application. Hence, the applicant has to refile his application 

and pays the required accreditation fees. 

SECTION 10. Accreditation Fees - 

1. The following schedule of fees for initial and renewal of accreditation shall be paid to the 

Cashier of the DOH. 

Accreditation Fees 

1.1 Confirmatory laboratory Php10,000.00 

1.2 Screening laboratory Php 5,000.00 

The initial certificate of accreditation of private drug testing laboratories shall be issued 

upon deposit of twenty thousand pesos (P20,000.00) cash bond per laboratory. 

2. The Bureau is authorized to adjust the accreditation fees from time to time. 

SECTION 11. Contents of Certificate of Accreditation: 

The certificate of accreditation shall state on its face the name of the owner and head 

of the laboratory, the classification and validity period. It shall be signed by the Bureau or 

CHD Director. 

SECTION 12. Validity: 

The certificate of accreditation shall be valid for a period of two (2) years for Confirmatory 

Laboratory and one (1) year for a Screening Laboratory. 

SECTION 13. Renewal Certificate of Accreditation 

1. Application for renewal of accreditation shall be filed ninety (90) days before the expiry 

date to the Bureau or CHD under whose jurisdiction the laboratory is located. 

2. The applicant shall follow the following procedures for renewal of certificate of accreditation:


2.1 Applicant accomplishes the required documents and submits them to the 

Bureau or CHD. Upon filing of application, the applicant pays the corresponding 

fees for renewal to the Cashier of the Bureau or CHD in person, or through postal 

money order. 

Documentary requirements: 

2.1.1 Notarized: Application for Renewal of Certificate of Accreditation 

2.1.2 Notarized List of Personnel 

2.1.3 List of Equipment/Instrument 

2.1.4 Current Certificate of Accreditation 

2.1.5 Current Mayorís Permit 

2.1.6 Documentation of Chain of Custody 

2.1.7 Current Certification for Quality Standard System (renewed yearly) - for 

Confirmatory Laboratory 

2.1.8 Current Proficiency Test Result (renewed yearly) 

2.2 The Bureau or CHD conducts survey to determine compliance with standards 

and technical requirements for accreditation. 

2.3 The Bureau or CHD approves or disapproves renewal of certification of accreditation. 

2.3.1 If approved, the Bureau or CHD renews the certificate of accreditation. 

2.3.2 If disapproved, the Bureau or CHD sends the findings and recommendations 

to the applicant for compliance. Failure to comply within fifteen (15) days 

shall be a ground for suspension/revocation of accreditation. 

SECTION 14. Monitoring of Laboratories: 

The Bureau or CHD may conduct an on site monitoring visit of accredited laboratories. 

The monitoring visits shall be conducted unannounced. The monitoring visits shall document 

the overall quality of the laboratory setting. 

SECTION 15. Terms and Conditions of Accreditation: 

1. An accreditation shall be granted in accordance with prescribed accreditation requirements 

and on the basis of specific conditions and limitations established during survey. 

2. An accreditation that is not renewed on the expiry date shall be considered lapsed and 

registration shall be cancelled. A new application for the issuance of accreditation shall be 

required before a laboratory can be allowed to operate. 

3. The accreditation as herein granted as well as any right under the accreditation cannot be 

assigned or otherwise transferred directly or indirectly to any party. 

4. The Bureau shall be notified of any change in management name or ownership. In cases 

of transfer of location, a new application for accreditation shall be required.


5. Failure to report in writing within fifteen (15) days of any substantial change in the condition 

of the laboratory (e.g. changes in the physical plant, equipment or manpower) may be a 

basis for the suspension or revocation of the accreditation. 

6. A separate accreditation shall be required for all laboratories or branches maintained in 

separate premises but operated under the same management. 

7. The accreditation shall be placed in an area readily seen by the public. A copy of the rules 

and regulations shall be readily available for guidance of all personnel of the laboratory. 

SECTION 16. Violations: 

Violations of this Implementing Rules and Regulations shall include among others the 

commission of the following acts: 

1. Issuance of false or fraudulent drug test results. 

2. Failure to protect the confidentiality of drug test results. 

3. Failure to participate or pass the proficiency testing. 

4. Conviction of the owner or manager of a laboratory for any criminal offense committed as 

an incident to the operation of the laboratory. 

5. Failure to refer the positive screening test results to a Confirmatory Laboratory. 

6. Any other cause which materially affects the ability of the laboratory to ensure the full 

reliability and accuracy of drug tests and the accurate reporting of results. 

7. Failure on the part of the medical facility to submit documentation of Quality Control 

Program (for screening laboratory) and certification of Quality Standard System from a 

DOH-recognized certifying body (for confirmatory laboratory) within 6 (six) months of operation 

after issuance of initial certificate of accreditation will cause revocation of the initial 

certification of accreditation. 

8. Refusal to allow survey, monitoring of a laboratory by the Bureau or CHD at an appropriate 

time. 

9. Any act which is contrary to the accepted clinical laboratory practices. 

Commission or omission of any of the aforementioned acts shall be a ground for 

suspension/revocation of certificate of accreditation without prejudice to the filing of any 

appropriate criminal action under Section 32 of R.A. 9165. 

SECTION 17. Suspension or Revocation of Certificate of Accreditation: 

The Bureau on its own or based on complaint, shall investigate and after due hearings 

may suspend or revoke the accreditation of a laboratory for such period and under such 

terms as may be necessary to ensure the full reliability and accuracy of drug tests and the 

accurate reporting of tests results. 

If upon survey or monitoring visits, the drug testing laboratory is found to be violating 

the rules and regulations as well as other violations stipulated under Section 17, the Bureau 

may immediately preventively suspend the operation of the said laboratory. Preventive suspension 

shall not be more than sixty (60) days. 

SECTION 18. Reapplication for Certificate of Accreditation:


A laboratory whose Certificate of Accreditation has been revoked may reapply for the 

issuance of a new one upon compliance with the requirements established hereunder and/or 

the correction of the deficiency or violation, which resulted in the revocation. 

SECTION 19. Appeal: 

Any laboratory or any of its personnel aggrieved by the decision of the Bureau may, 

within fifteen (15) days after receipt of the notice of decision, file a notice of appeal with the 

Office of the Secretary, and serve a copy of the notice of appeal to the Bureau. Thereupon, 

the Bureau shall promptly certify and file a copy of the decision, including the transcript of 

the hearings on which the decision is based with the Office of the Secretary for review and 

consideration. 

SECTION 20. Penal Provisions: 

Any person authorized or accredited under this Act and its implementing rules to 

conduct drug examination or test, who issues false or fraudulent drug test result knowingly, 

willfully or through gross negligence, shall suffer the penalty of imprisonment ranging from 

six (6) years and one (1) day to twelve (12) years and a fine ranging from one hundred 

thousand pesos (P100,000.00) to five hundred thousand pesos (P500,000.00). Further, 

revocation of license to practice shall be recommended to the Professional Regulation Commission. 

SECTION 21. Transitory Provisions: 

Until such time that the NRL for toxicology of the DOH is established and operational, 

the DDB-Laboratory shall act as the NRL. 

In administrative regions where there are no Gas Chromatography-Mass Spectrometer 

(GCMS) nor High Performance Liquid Chromatography-Mass Spectrometer (HPLC-MS) 

equipment currently available, all DDB licensed drug testing laboratories using High Performance 

Liquid Chromatography (HPLC) may be allowed to operate as Confirmatory Laboratory 

using such machine provided that its photodiode array is not more than two (2) years. In 

the absence of GC-MS and HPLC with photodiode array of not more than two years, licensed 

drug-testing laboratories using Thin Layer Chromatography (TLC) may be allowed to 

perform confirmatory tests. 

In the event that a confirmatory laboratory with GC-MS or HPLC-MS is accredited by 

the DOH in administrative regions where they were not earlier available, use of HPLC with 

photo-diode array of not more than two years of TLC shall be allowed only for a maximum 

period of ninety (90) days from receipt of notice of such accreditation from the DOH, which 

notice must be sent within ten (10) days from approval. 

In the event that a confirmatory laboratory with HPLC with photodiode array of not 

more than two years is accredited by the DOH in administrative regions where GC-MS or 

HPLC-MS is not available, use of TLC shall be allowed only for a maximum period of ninety 

(90) days from receipt of notice of such accreditation from DOH, which notice must be sent 

within ten (10) days from approval.


When modern and accepted methods for confirmatory testing emerge, the DOH shall 

immediately conduct technical studies and submit recommendations to the DDB for appropriate 

action. 

The use of DDB validated drug testing kits shall be allowed until December 31, 2003. 

Thereafter, only Bureau of Food and Drugs registered kits shall be used. 

Manual processing of necessary documents shall be done in facilities where an Application 

Service Provider (ASP) is not available. 

These rules and regulations shall be subject for review annually. 

SECTION 23. Separability: 

In the event that any section, paragraph, sentence, clause or word of this order is 

declared invalid for whatever, any reason, other provisions thereof shall not be affected 

thereby. 

SECTION 24. Effectivity: 

These rules and regulations shall take effect upon approval of the Dangerous Drugs 

Board and publication in a newspaper of general circulation. 


Minimum Technical Requirements: 

(SGD.) MANUEL M. DAYRIT, M.D., MSC. 

Secretary of Health 

Annex A 

Service Confirmatory Laboratory Screening Laboratory 

Screening Test Immunoassay equipment or BFAD Immunoassay equipment 

registered drug-testing kit or Thin or BFAD registered-drug- 

Layer Chromatography (TLC) testing kit or Thin Layer 

Chromatography (TLC) 

Confirmatory 

Examination Gas Chromatograhy-Mass 

Spectrometer (GC-MS), High 

Performance Liquid Chromatography-Mass 

Spectrometer (HPLC-MS) or some such 

modern and accepted equipment 

Basic equipment: Basic equipment 

- Laboratory oven - Refrigerator/freezer 

- Analytical balance 

-Refrigerator


-Freezer 

-Fumehood 

-Other necessary equipment based on the 

procedure used. 

IT System Requirements for Confirmatory Laboratory and Screening Laboratory: 

1. Computer 

600 MHZ processor 

128 MB memory 

4 GB hard disk 

56 K modem 

2. Printer 

3. Account with local Internet Service Provider (ISP) 



--o0o-- 

Manual of Operations for Drug Testing Laboratories 



--o0o-- 

Bureau Memorandum No. 01, s. 2002 

Necessary Permits as Requirements for 

Issuance of License and Renewal of License 

The built environment in hospitals is becoming more complex as these institutions design 

their buildings and structures to respond to the demands of the increase in bed capacity 

and upgrading of service capability for quality health care service delivery. 

However, with the continuing development in hospitals comes the corresponding responsibility 

of keeping the buildings and structures properly maintained and safe especially 

against man-made disasters. 

It is therefore necessary that all hospitals shall conform to all applicable provisions of 

relevant laws and their implementing rules and regulations, which include, but not limited to, 

the following:

1270 


1. P.D. 1096 - National Building Code of the Philippines and its Implementing Rules and 

Regulations 

2. P.D. 1185 - Fire Code of the Philippines and Its Implementing Rules and Regulations 

3. P.D. 856 - Code on Sanitation of the Philippines and its Implementing Rules and Regulations 

4. B.P 344 - Accessibility Law and Its Implementing Rules and Regulations 

5. R.A. 1378 - National Plumbing Code of the Philippines and its Implementing Rules and 

Regulations 

6. R.A. 184 - Philippine Electrical Code 

It is informed that all hospitals shall secure the required permits from concerned agencies 

as a prerequisite for issuance of license and renewal of license to be made available 

during inspection by the licensing team of the Bureau of Health Facilities and Services and/ 

or Center for Health Development: 

1. For construction of a new hospital, and alteration, expansion or renovation of an existing 

hospital. 

1.1 Building Permit (Sanitary/Plumbing Permit, Electrical Permit, Mechanical Permit 

from the Office of the Building Official in the locality. 

1.2 Fire Safety Permit from the Bureau of Fire Protection in the locality. 

2. For new hospital (to be secured prior to initial license) 

2.1 Certificate of Occupancy from the Office of the Building Official in the locality 

2.2 Fire Safety Inspection Certificate from the Bureau of Fire Protection in the 

locality 

2.3 Sanitary Certificate from the Local Health Office 

3. For existing hospital (to be secured on a yearly basis) 

3.1 Certificate of Annual Inspection from the Office of the Building Official in the 

locality 

3.2 Fire Safety Inspection Certificate from the Bureau of Fire Protection in the 

locality 

3.3. Sanitary Certificate from the Local Health Office 


Adopted: 23 Jan. 2003



(SGD.) ATTY. NICOLAS B. LUTERO III, CESO III 

Director IV 

--o0o-- 


Effectivity of Administrative Order No. 70-A, s. 2002 dated January 3, 2002 - 

Revised Rules and Regulations Governing the Registration, Licensure and 

Operation of Hospitals and Other Health Facilities in the Philippines 

Please be informed that Administrative Order No. 70-A, s. 2002 dated January 3, 

2002 - Revised Rules and Regulations, Governing the Registration, Licensure and Operation 

of Hospitals and other Health Facilities in the Philippines shall take effect May 1, 2002. 

In view of this, all applications for permit to construct and license to operate received 

from May 1, 2002 onwards shall comply with all provisions of the new Administrative Order. 

All applications for permit to construct and license to operate received before said date, 

including all applications for renewal of license for CY 2002, shall observe all requirements of 

the previous Administrative Order. However, a period of two (2) years from May 1, 2002 shall 

be given for these hospitals to meet the provisions of the new Administrative Order. 


Adopted: 16 April 2002 




--o0o-- 


Clarification Regarding Administrative Order No. 59, s. 2001 - 

Rules and Regulations Governing the Establishment, Operation 

and Maintenance of Clinical Laboratories in the Philippines 

Pursuant to Administrative Order No. 59, s. 2001 - Rules and Regulations Governing 

the Establishment, Operation and Maintenance of Clinical Laboratories in the Philippines, 

the following clarification on certain provision/s shall take effect immediately: 

SECTION 7. Requirements and Procedures for Application of Permit to Construct 

and License to Operate

1272 


7.1 Application for Permit to Construct: The following are the documents required 

- 

7.1.1 Letter of Application to the Director of BHFS 

7.1.2 Four (4) sets of Site Development Plans and Floor Plans 

approved by an architect and/or engineer 

Four (4) sets of Floor Layout, showing location of equipment and areas 

required, appropriately dimensioned, properly identified and completey labeled. 






--o0o-- 


Exemption from Permit to Construct for Existing 

Health Facilities Providing Maternity Service 

Pursuant to Administrative Order No. 70-A, s. 2002 - Revised Rules and Regulations 

Governing the Registration, Licensure and Operation of Hospitals and Other Health Facilities 

in the Philippines, please be informed that all existing health facilities providing maternity 

service on pre-natal and post-natal care, normal spontaneous delivery, and care of newborn 

shall be exempted from permit to construct. They shall immediately apply for registration and 

initial license to operate as BIRTHING HOME, provided that: 

1. Existing facilities have operated before May 1, 2002; 

2. Existing facilities have secured DTI/SEC Registration and Business/Mayorís Permit 

before May 1, 2002. 

After issuance of initial license to operate, any alteration, expansion, renovation, change 

in classification, or increase in bed capacity shall require an application for permit to construct. 

Forms are available for download at the DOH internet (http://www.doh.gov.ph) 


Adopted: 13 Nov. 2002 



--o0o--



Implementing Rules and Regulations Governing Accreditation 

of Drug Abuse Treatment and Rehabilitation Centers and 

Accreditation of Center Personnel* 

Section 1. Scope 

These implementing rules and regulations shall apply to all Drug Abuse Treatment and 

Rehabilitation Centers in the Philippines and its personnel. 

Section 2. Authority 

These rules and regulations are issued to implement the provisions of Republic Act 

9165: ìComprehensive Dangerous Drugs Act of 2002î consistent with Executive Order 102, 

s. 1999: ìRedirecting the Functions and Operations of the Department of Healthî. 

Section 3. Regulatory Agency 

The Department of Health through the Bureau of Health Facilities and Services shall 

exercise the regulatory functions. 

Section 4. Definition of Terms 

Accreditation - a formal authorization issued by the DOH to an individual, partnership, 

corporation or association in compliance with all licensing requirements (input/structural 

standards) and accreditation requirements (process standards and outcome/output/impact 

standards) as prescribed in the Manual of Operations for Treatment and Rehabilitation 

Centers. 

BHFS - refers to the Bureau of Health Facilities and Services. 

Bureau Director - refers to the director of the Bureau of Health Facilities and Services. 

CHD - refers to the Center for Health Development, which is the DOH Regional Field Office. 

Center - any of the treatment and rehabilitation centers which undertake treatment, aftercare 

and follow up treatment of drug dependents. It includes institutions, agencies and the 

like whose purposes are: the development of skills, arts and technical know-how, counseling 

and/or inculcating civic, social and moral values to drug dependent patients, with the 

aim of weaning them away from dangerous drugs and keeping them drug-free, adapted to 

their families and peers and readjusted into the community as law abiding, useful and 

productive citizens. 

DOH - refers to the Department of Health 

*Also filed by Dangerous Drugs Board on 12 September 2003 under Board Regulation 

No. 4, s. 2003

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DOH Accredited Physician - a physician with background experience on psychological/ 

behavioral medicine whose application has been approved and duly authorized by the 

DOH to conduct dependency examination and treatment on persons believed to be using 

dangerous drugs. 

Drug Dependent - a person suffering from drug dependence. 

Drug Dependence - a cluster of physiological, behavioral and cognitive phenomena of 

variable intensity, in which the use of psychoactive drug takes on a high priority thereby 

involving among others, a strong desire or a sense of compulsion to take the substance 

and the difficulties in controlling substance taking behavior in terms of its onset, termination 

or levels of use. 

Non-Professional Center Personnel - graduate of less than four (4) year course, high 

school or elementary. 

Procedure Manual - a written document giving detailed steps to be followed when undertaking 

a particular task. 

Professional Center Personnel - a board certified or graduate of a four (4) year course. 

Rehabilitation - a dynamic process including after care and follow-up treatment directed 

towards the physical, emotional/psychological, vocational, social and spiritual change of a 

drug dependent to enable him/her to live without dangerous drugs, enjoy the fullest life 

compatible with his capabilities and potentials and render him/her able to become a law 

abiding and productive member of the community. 

Treatment - medical service rendered to a patient for the effective management of physical 

and mental conditions arising from an individualís drug abuse. 

Service Patient - one who cannot afford or partially afford to pay the treatment and rehabilitation 

services of the Center based on income or paying capacity. 

Section 5. Classification of Treatment and Rehabilitation Centers for Drug 

Dependents 

The Centers shall be classified as follows: 

1. Ownership 

1.1 Government - operated and maintained partially or wholly by the national, provincial, 

city or municipal government, or any other government agency. 

1.2 Private - privately owned, established and operated with funds through donation, 

principal, investment or other means, by any individual, corporation, association or organization. 

2. Institutional Character


2.1 Institution-based - a Center that operates within any institution. 

2.2 Free-standing - a Center that operates separately from any other institution. 

3. Service Capability 

3.1 Non-residential Treatment and Rehabilitation Center (Out-patient Center) - a health 

facility that provides diagnosis, treatment and management of drug dependents on an out 

patient basis. It maybe a drop-in/walk-in Center or any other office/facility used by support 

groups that provide consultation or counseling. From time to time, it may provide 

temporary shelter for patients in crisis for not more that twenty four (24) hours. 

3.2 Residential Treatment and Rehabilitation Center (In-patient Center) - a health facility 

that provides comprehensive rehabilitation services utilizing, among others, any of the 

accepted modalities: multidisciplinary team approach, therapeutic community approach 

and/or spiritual services towards the rehabilitation of a drug dependent. 

Section 6. Technical Requirements for Accreditation 

For a Center to be accredited, it shall comply with the following technical requirements: 

(refer to Annex A) 

1. Service Capability - services provided in accordance to its physical plant, personnel and 

equipment 

2. Personnel - minimum staffing of qualified and trained health and health related professionals 

and non-professionals. 

3. Equipment/Instruments - minimum tools to perform the required services. 

4. Physical Plant - well ventilated, lighted, clean, and safe with adequate water supply and 

functional structures sufficient to accommodate the activities. 

5. Procedural Manual - document describing the administrative as well as technical policies 

and procedures of the Center. It must contain among others the background of the Center, 

admission and exclusion criteria, description of services offered, treatment modality, 

major policies, disciplinary measures, source of funds, aftercare/referral. The Procedure 

Manual must be fully disseminated and implemented. 

6. Personnel Management - the Center must have a sound system of recruitment, selection 

and appointment of personnel to ensure that staff is competent and qualified to perform 

the services. 

7. Financial Management - the Center shall have a sound plan of financing which gives 

assurance of sufficient funds to enable it to carry out its defined purposes and provide 

appropriate services for drug dependents. The Center shall submit to DOH an Annual 

Financial Report. 

8. Records Management - patientís records must be complete and updated. Security and 

confidentiality must be maintained at all times. The Center shall ensure timely submission 

of Statistical Reports to the DOH.

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9. Treatment and Rehabilitation Program and Services - each Center must have a program 

with a treatment modality that is scientifically based, acceptable to standard norms and 

does not cause harm to the patients and as such, will restore an individualís physical, 

psychological and social capability. 

10. Referral Services - after identifying accurately the problems of the patient, the Center 

must be able to send/refer him to an agency/professional that can provide appropriate 

services. 

11. Training Program - to achieve an integrated, coordinated and comprehensive treatment 

and rehabilitation program, the Center shall require the technical staff to undergo 

periodic relevant trainings. 

12. Program Evaluation - program evaluation shall be conducted by the Center at least 

once a year. Findings of the program evaluation shall be the basis for policy formulation, 

modification and program development. 

13. Maintenance Program - the Center must have a preventive/corrective maintenance 

program for the physical plant as well as for its equipment and instruments. 

14. Disciplinary Action/Measures - the Center must institute disciplinary measures that are 

appropriate and humane. There shall be written policies regarding disciplinary measures/ 

sanction imposed by the Center. It shall be made available for review. 

Section 7. Allowable Service Fees 

All private residential Centers shall allocate five (5) percent of the total beds for service 

patients. Government residential Centers must not exceed fifty (50) percent of the total bed 

allocation for paying patients. Discounted rates shall be based on the guidelines prescribed 

by the Department of Social Welfare and Development. Further, cost sharing in the treatment 

and rehabilitation of any dependent shall follow what is prescribed in Section 74 of the 

Implementing Rules and Regulations of Republic Act 9165, otherwise known as the 

ìComprehensive Dangerous Drugs Act of 2002î. 

For a residential Center, service fees shall include fees for the recovery of board and 

lodging as well as materials and supplies. 

Section 8. Procedural Guidelines for Certificate of Accreditation 

I - Issuance of Permit to Construct for residential Centers 

The applicant shall secure a Permit to Construct from the BHFS for construction of a 

new facility, alteration, expansion or renovation of an existing health facility, change in 

classification or increase in bed capacity. It is a pre-requisite for accreditation. 

1. The applicant accomplishes the required documents and submits them to the CHD for 

endorsement to the BHFS. Upon filing of application, the applicant pays the corresponding 

fees to the Cashier of the DOH in person, or through postal money order. 

Documentary requirements - Permit to Construct


1.1 Letter of application to the BHFS Director 

1.2 Letter of endorsement to the BHFS (if filed at the CHD) 

1.3 Four (4) sets of Site Development Plan and Floor Plan signed and sealed by a 

licensed architect and/or engineer 

1.4 Zoning Certificate or Location Clearance from the City/Municipality Planning and 

Development Office 

1.5 DTI/SEC Registration (for private facilities) Enabling Act. Board Resolution (for 

government facilities) 

2. The BHFS reviews the documents and approves/disapproves the issuance of Permit to 

Construct. 

2.1 If approved, the BHFS issues a Permit to Construct to the applicant. 

2.2 If disapproved, the BHFS returns the documents, together with their findings and 

recommendations to the applicant. Failure to comply within thirty (30) days shall be a 

ground for denial of application. Hence, the applicant has to re-file his application and 

pays the required fees. 

II - Issuance of Certificate of Accreditation 

Prior to the operation of a Center, it must secure a Certificate of Accreditation 

1. The applicant accomplishes the required documents and submits them to the BHFS or 

CHD for endorsement to the Bureau. Upon filing of application, the applicant pays the 

corresponding fees to the Cashier of the DOH in person or through postal money order. 

Documentary requirements 

1.1 BHFS Application Form filed either at the Bureau or CHD 

1.2 Letter of endorsement to the Bureau Director if filed at the CHD 

1.3 Permit to Construct 

1.4 Mayorís Permit 

1.5 Building Permit 

1.6 Fire Protection Permit 

1.7 Health and Sanitation Permit 

1.8 List of personnel including biodata 

1.9 List of Equipment 

1.10 Procedure Manual to include among others the schedule of the structured activities 

1.11 Training Plan 

2. The BHFS conducts on site survey to determine compliance with standards/technical 

requirements. 

3. The BHFS approves/disapproves the issuance of Certificate of Accreditation.

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3.1 If approved, the BHFS accredits the Center and issues an initial Certificate of Accreditation 

to the applicant upon deposit of twenty thousand pesos (20,000.00) cash 

bond. 

3.2 If disapproved, the BHFS sends the findings and recommendations to the applicant. 

Failure to comply within fifteen (15) days shall be a ground for denial of the application. 

Hence, the applicant has to re-file his application and pay the required accreditation fees. 

Section 9. Permit to Construct and Accreditation Fees 

The following schedule of fees for initial and renewal of Certificate of Accreditation 

shall be paid to the Cashier of the DOH. 

Permit to Construct Fees Accreditation Fees 

Non Residential Center Php 500.00 Php 6,000.00 

Residential Center Php 1,000.00 Php14,000.00 

The initial Certificate of Accreditation of private Center shall be issued upon deposit of 

twenty thousand pesos (P20,000.00) cash bond per Center. 

Section 10. Content of Certificate of Accreditation 

The Certificate of Accreditation shall state on its face the name of the owner or operator 

of the Center, the service capability, the period for which it is valid, and the location at which 

said services shall be provided. It shall be signed by the Bureau or CHD Director. 

Section 11. Validity 

The Certificate of Accreditation shall be valid for a period of three (3) years. 

Section 12. Renewal of Accreditation 

1. Application for renewal of accreditation shall be filed ninety (90) days before the expiry 

date to the BHFS or CHD under whose jurisdiction the Center is located. 

2. The following are the procedures for application for renewal of accreditation: 

2.1 Applicant accomplishes the required documents and submits them to the BHFS or 

CHD. Upon filing of application, the applicant pays the corresponding fees for renewal to 

the Cashier of the DOH or CHD in person, or through postal money order. 

Documentary Requirements - Certificate of Accreditation: 

1. Application for Renewal of Accreditation 

2. List of Personnel and training(s) attended 

3. List of Equipment/Instrument 

4. Annual Statistical Report for the past three (3) years 

5. Annual Financial Report for the past three (3) years 

6. Annual Program Evaluation Report


2.2 The BHFS or CHD conducts on site survey to determine compliance with standards. 

2.3 The BHFS or CHD approves/disapproves the issuance of accreditation. 

2.3.1 If approved, the BHFS or CHD issues an accreditation to the applicant. 

2.3.2 If disapproved, the BHFS or CHD sends the findings and recommendations to the 

applicant for compliance. Failure to comply within fifteen (15) days shall be a ground for 

suspension/revocation of accreditation. 

Section 13. Monitoring of Centers 

The BHFS shall require all Centers to submit monthly Statistical Reports to the Dangerous 

Drugs Board Secretariat for the drug information system. Further, all Centers shall submit 

Annual Statistical Reports to the BHFS. 

The BHFS or CHD may conduct an on site monitoring of the accredited Center. The 

monitoring visits shall be conducted unannounced during regular office hours. BHFS monitoring 

team shall be allowed unrestricted ocular inspection of the Center, access to any case file or 

charts of patients, conduct random chart reviews and individual and/or group interviews with 

patients and/or employees of the Center. 

Section 14. Terms and Conditions of Accreditation 

1. An accreditation shall be granted in accordance with prescribed accreditation requirements 

and on the basis of specific conditions and limitations established during the survey. 

2. An accreditation that is not renewed at the expiry date shall be considered lapsed and 

registration shall be cancelled. A new application for registration and issuance of Certificate 

of Accreditation shall be required before a Center can be allowed to operate. 

3. The BHFS shall be notified of any change in management, name or ownership. In cases 

of transfer of location, a new application for registration and accreditation is required. 

4. Failure to report in writing within fifteen (15) days of any substantial change in the condition 

of the Center (e.g. changes in physical plant, equipment and personnel) may be a 

basis for the suspension or revocation of the accreditation. 

5. A separate accreditation shall be required for all Centers maintained in separate premises 

but operated under the same management. 

6. The Certificate of Accreditation shall be placed in an area readily seen by the public. A 

copy of the rules and regulations shall be readily available for guidance of all personnel of 

the Center. 

Section 15. Violations


Violations of the ìComprehensive Dangerous Drugs Act of 2002î or the rules and 

regulations issued in pursuance thereto include but not limited to the commission of the 

following acts: 

1. Conviction of the owner or manager of the Center for any criminal offense committed as 

an incident to its operation. 

2. Person who violates the confidentiality of records. 

3. Failure to comply with the prescribed guidelines in the Manual of Operations for Treatment 

and Rehabilitation Centers. 

Section 16. Suspension or Revocation of Certificate of Accreditation 

The BHFS on its own or based on complaint, investigate and after hearing, suspend or 

revoke the accreditation of a Center for such period and under such terms as may be 

necessary to protect the interests of the government and the public. 

If upon survey or monitoring visits, the Center is found violating the rules and regulations 

as well as other violations stipulated under Section 15, the BHFS may immediately preventively 

suspend the operation of the said Center. Preventive suspension shall not be more than sixty 

(60) days. 

Refusal of the Center to allow BHFS monitoring team to conduct a survey of the Center 

may be a ground for suspension of Certificate of Accreditation. 

Section 17. Reapplication for Accreditation 

A Center whose Certificate of Accreditation has been revoked may reapply for the 

issuance of a new one upon compliance with the requirements established hereunder and/or 

the correction of the deficiency, which resulted in the revocation. 

Section 18. Appeal 

Any Center or any of its personnel aggrieved by the decision of the BHFS may, within 

fifteen (15) days after receipt of the notice of decision, file a notice of appeal with the Office 

of the Secretary, and serve a copy of the notice of appeal to the BHFS. Thereupon, the 

BHFS shall promtly certify and file a copy of the decision, including the transcript of the 

hearings on which the decision is based within the Office of the Secretary, for review. 

Section 19. Accreditation of Center Personnel 

Accreditation of Center personnel shall be categorized as follows: 

1. DOH Accredited Physician 

2. DOH Accredited Professional 

3. DOH Accredited Non-Professional 

Accreditation of Physician


The prescribed requirements for the accreditation of physician who will conduct 

examination and treatment of drug dependents are the following: 

1. The physician must be registered with the Board of Medical Examinees and duly licensed 

to practice in the country. 

2. The physician must be a psychiatrist or in lieu thereof, he must have been in the general 

practice of medicine for at least three (3) years and must at least have supervised training 

in the diagnosis and management of drug dependents for at least one (1) month. 

3. The physician must be a member of good standing in a local medical society in his 

community. 

4. The applicant must have been actively involved in dangerous drugs control work for at 

least six (6) months prior to the filing of application for accreditation. 

Accreditation of Professional/Non Professional Center Personnel 

The prescribed requirements for the accreditation of Professional/Non Professional 

Center Personnel who will conduct the day to day operation are the following: 

1. The applicant must have been actively involved in the management of drug dependents for 

at least three (3) years prior to the filing of application for accreditation. 

2. The applicant must have undergone the Basic Training Course on Rehabilitation Management 

of Drug Dependents conducted by the DOH. 

Procedural Guidelines for Accreditation 

1. Applicant accomplishes the required form and submits all the documentary requirements 

to the BHFS. The applicant pays the corresponding fees to the Cashier of the DOH in 

person or through postal money order. 

Intitial Accreditation 

1.1 BHFS Application Form filed either at the BHFS or CHD 

1.2 Letter endorsement of the Bureau Director if filed at the CHD 

1.3 Photocopy of approriate Professional Regulation Commission Identification Card (if 

applicable) 

1.4 Certificate(s) of training related to treatment/management of drug dependents. 

1.5 Certification from the local Medical Society (for physicians only) 

Renewal of Accreditation 

1.6 Current PRC Identification Card (if applicable) 

1.7 Certificate(s) of training related to treatment/management of drug dependents 

2. The BHFS evaluates the documents submitted to determine compliance with the accreditation 

requirements.

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3. The BHFS approves/disapproves the issuance of Certificate of Accreditation. 

3.1 If approved, the BHFS registers the Center personnel and issues the Certificate of 

Accreditation to the applicant. 

3.2 If disapproved, the BHFS sends the findings and recommendations to the applicant 

for compliance. Failure to comply within three (3) days shall be a ground for denial of 

application (for initial) suspension or revocation (for renewal) of accreditation. 

Validity 

The Certificate of Accreditation shall be valid for a period of five (5) years. 

Accreditation Fees 

1. The applicant pays the amount of one thousand pesos (P1,000.00) for the accreditation 

of physician and five hundred pesos (P500.00) for the accreditation of professional/non 

professional center personnel to the Cashier of the DOH. 

2. The BHFS is authorized to adjust the schedule of fees from time to time. 

Section 20. Moratorium 

All DDB Accredited Centers shall be given two (2) years from approval and publication 

of these implementing rules and regulations to meet the new accreditation requirements. 

All DDB accredited physicians who were given lifetime-accreditation shall be given five 

(5) years to continue the conduct of examination and treatment of drug dependents from 

approval and publication of these implementing rules and regulations. Likewise, the rest of 

the DDB Accredited Center Personnel who were given lifetime-accreditation shall be given 

five (5) years to continue performance of their functions. Thereafter, they must renew their 

Certificate of Accreditation regularly. 

Section 21. Separability 

In the event that any section, paragraph, sentence, clause or word of this order is 

declared invalid for whatever reason, other provisions thereof shall not be affected thereby. 

Section 22. Effectivity 

These rules and regulations shall take effect upon adoption of the Dangerous Drugs 

Board and publication in a newspaper of general circulation. 


(SGD.) MANUEL M. DAYRIT, M.D., M.Sc. 

Secretary of Health


Technical Requirements 

ANNEX A 

A. Non Residential Treatment and Rehabilitation Center (Outpatient Center) 

Service Capability 

1. Assessment, treatment and management 

2. Emergency assistance 

2.1 Medical and psychiatric first aid treatment for drug overdose/withdrawal including 

minor trauma and other medical complications as well as psychiatric illness 

3. Information and referral 

3.1 Medical and psychiatric treatment 

3.2 Rehabilitation 

3.3 Other special services - shelter, food, clothing 

4. Follow-up and after care 

5. Counseling services including individual and group therapy, educational, vocational, occupational, 

spiritual and legal counseling 

6. Other support services 

6.1 Job placement referral 

7. Access to drug testing facility 

Personnel - all personnel must be drug free 

1. DOH Accredited Physician (part time) -1 

2. Licensed Nurse - 1 

3. Licensed Social Worker/Psychologist (part time) - 1 

4. Clerk - 1 

Equipment/Instrument 

1. Bench 

2. Cabinet with lock 

3. Clinical Weighing Scale 

4. Examining light 

5. Examining table 

6. Sphygmomanometer 

7. Stethoscope 

8. Table/chair 

9. Telephone

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Physical Plant - minimum of twenty (25) square meters 

1. Business area 

2. Consultation, examination and treatment room with lavatory/sink 

3. Toilet with lavatory 

4. Multi purpose area that can double as the reception/waiting area and meeting area 

for group/family 

B. Residential Treatment and Rehabilitation Center 

Service Capability 

1. Assessment, treatment and management 

2. Emergency Assistance 

1.1 Medical and psychiatric first aid for drug overdose/withdrawal, minor trauma and 

other medical complications as well as psychiatric illness 

3. Information and Referral 

1.1 Medical and psychiatric treatment 

1.2 Other special services, shelter, food clothing 

4. Follow-up and after care 

5. Counseling services including individual and group therapy, educational, vocational, occupational, 

spiritual and legal counseling 

6. Living accommodation 

7. Structured program of activities 

8. Rehabilitation service 

8.1 Treatment Modality 

8.2 Counseling Program 

8.3 Recreational Program 

8.4 Works and vocational skill training 

8.5 Family Program 

9. Other support services 

9.1 Job placement referral - optional 

9.2 In house education program - optional 

10. Access to drug testing facility 

Personnel - all personnel must be drug free 

1. Center/Program Director/Administrator with training on any behavioral sciences 

2. DOH Accredited Physician (on call) -1


3. Licensed Dentist (on call) - 1 

4. Licensed Nurse/Midwife - 1:50 

5. Licensed Social Worker - 1:50 

6. Psychologist - 1:50 

7. Clerk - 1:100 

8. Other non-professional staff - 4:100 

Physical Plant - minimum of four hundred (400) square meters for thirty (30) patients 

1. Registration area/Waiting area/reception 

2. Living quarters, separate rooms for male and female 

3. Toilet/bath/lavatory - one for every 10 patients 

4. Multi purpose area/recreational area 

5. Dining area 

6. Kitchen area 

7. Counseling/testing/examination room 

8. Administrative office/directors office (with secured storage files) 

9. Area for outdoor activity 

10. Emergency Clinic 

Equipment 

1. bed or double decked bed - 1 bed for every patient 

2. cabinet and locker 

3. dining table 

4. electric fan 

5. emergency medical cabinet/first aid kit 

6. examining light 

7. fire extinguishers 

8. recreational equipment 

9. refrigerator 

10. sofa set 

11. sphygmomanometer 

12. stethoscope 

13. stove 

14. table and chair 

15. telephone 

16. thermometer 

17. TV and/or karaoke 

18. typewriter/computer 

19. weighing scale 

CEBU PORT AUTHORITY 



Ban on Pedal-Operated Tricycles (Trisikads) at the Baseport of Cebu







--o0o-- 

CPA Memorandum Circular No. 09, s. 2003 

Implementing Guidelines on the Lease of Ticket Booth 

Spaces at the Passenger Terminal at Pier 3, Cebu Base Port 





--o0o-- 

Administrative Order 02-2003 

Ro-Ro Policy for the Port of Cebu, Prescribing Ro-Ro 

Wharfage Fees and Guidelines 



DANGEROUS DRUGS BOARD 


Board Regulation No. 1, series of 2003 

Implementing Guidelines Governing the 

Operationalization of the Special Drug Education Centers






--o0o-- 

Board Regulation No. 3, series of 2003 

Comprehensive Guidelines on Importation, Distribution, Manufacture, 

Prescription, Dispensing and Sale of, and Other Lawful Acts in Connection 

with any Dangerous Drugs, Controlled Precursors and Essential Chemicals 

and Other Similar or Analogous Substances 





--o0o-- 

Board Regulation No. 5, s. 2003 

Guidelines in the Implementation of Operations ìPrivate Eyeî 

Pursuant to Section 22, Article II of Republic Act No. 9165, the following guidelines are 

hereby promulgated: 

SECTION 1. Definitions - 

Article I 

Definition of Terms 

a. Cannabis or commonly known as ìMarijuanaî or ìIndian Hempî or by its any other name 

- embraces every kind, class, genus, or specie of the plant Cannabis Sativa L. including but 

not limited to, Cannabis americana, hashish, bhang, guaza, churrus ang ganjab, and embraces 

every kind, class and character of marijuana, whether dried or fresh and flowering, 

flowering or fruiting tops, or any part or portion of the plant and seeds thereof, and all its 

geographic varieties, whether as a reefer, resin, extract, tincture or in any form whatsoever. 

b. Chemical Diversion - the sale, distribution, supply or transport of legitimately imported, 

in-transit, manufactured or procured controlled precursors and essential chemicals, in diluted, 

mixtures or in concentrated form, to any person or entity engaged in the manufacture 

of any dangerous drugs, and shall include packaging, repackaging, labeling, relabeling or


concealment of such transaction through fraud, destruction of documents, fraudulent use of 

permits, misdeclaration, use of front companies or mail fraud; 

c. Clandestine Laboratory - any facility used for the illegal manufacture of any dangerous 

drug and/or controlled precursor and essential chemical; 

d. Controlled Precursors and Essential Chemicals - include those chemicals listed in 

Tables I and II of the 1988 UN Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic 

Substances as enumerated in the attached annex which is an integral part of the 

Act; 

e. Cultivation or Culture - Any act of knowingly planting, growing, raising, or permitting the 

planting, growing, or raising of any plant which is the source of dangerous drug; 

f. Dangerous Drugs - include those listed in the Schedules annexed to the 1961 Single 

Convention on Narcotic Drugs, as amended by the 1972 Protocol, and in the Schedules 

annexed to the 1971 Single Convention on Psychotropic Substances as enumerated in the 

attached annex which is an integral part of the Act; 

g. Delivery - any act of knowingly passing a dangerous drug to another, personally or 

otherwise, and by any means, with or without consideration; 

h. Den, Dive or Resort - a place where any dangerous drug and/or controlled precursor 

and essential chemical is administered, delivered, stored for illegal purposes, distributed, 

sold or used in any form; 

i. Drug Group - organized group of two (2) or more persons forming or joining together with 

the intention of committing any offense prescribed under R.A. 9165; 

j. Financier - any person who pays for, raises or supplies money for, or underwrites any of 

the illegal activities prescribed under R.A. 9165; 

k. Guidelines - refers to the Guidelines implementing Operations ìPrivate Eyeî; 

l. Illegal Trafficking - the illegal cultivation, culture, delivery, administration, dispensation, 

manufacture, sale, trading, transportation, distribution, importation, exportation and possession 

of any dangerous drug and/or controlled precursor and essential chemical; 

m. Informant - any person who by means of familiarity or close association with criminals is 

able to supply information about them or their activities to the PDEA; 

n. Information Report Form (IRF) - the document submitted by an informant containing 

facts in an illegal drug activity; 

o. Laboratory Equipment - the paraphernalia, apparatus, materials or appliances when 

used, intended for use or designed for use in the manufacture of any dangerous drug and/or 

controlled precursor and essential chemical, such as reaction vessel, preparative/purifying 

equipment, fermentors, separatory funnel, flask, heating mantle, gas generator, or their 

substitute;


p. Manufacture - the production, preparation, compounding or processing of any dangerous 

drug and/or controlled precursor and essential chemical, either directly or indirectly or 

by extraction from substances of natural origin, or independently by means of chemical 

synthesis or by a combination of extraction and chemical synthesis, and shall include any 

packaging or repackaging of such substances, design or configuration of its form, or labeling 

or relabeling of its container, except that such terms do not include the preparation, 

compounding, packaging or labeling of a drug or other substances by a duly authorized 

practitioner as an incident to his/her administration or dispensation of such drug or substance 

in the course of his/her professional practice including research, teaching and chemical 

analysis of dangerous drugs or such substances that are not intended for sale or for any 

other purpose; 

q. Methylenedioxymethamphetamine (MDMA) or commonly known as ìEcstasyî , or by its 

any other name - refers to the drug having such chemical composition, including any of its 

isomers or derivatives in any form; 

r. Methamphetamine Hydrochloride or commonly known as ìShabuî, ìIceî, ìMethî, or by 

its any other name - the drug having such chemical composition, including any of its 

isomers or derivatives in any form. 

s. Operation: ìPrivate Eyeî - is a citizen-based information collection program of the 

Dangerous Drugs Board, the Philippine Drug Enforcement Agency and the different nongovernment 

organizations engaged in the fight against illegal drugs which aims to counter 

fear and apathy as hindrances to active participation of the citizenry in reporting drug 

activities by ensuring anonymity of the informant and giving monetary rewards respectively. 

t. Pusher - any person who sells, trades, administers, dispenses, delivers or gives away to 

another, on any terms whatsoever, or distributes, dispatches in transit or transports dangerous 

drugs or who acts as a broker in any of such transactions, in violation of the Act; 

u. Selling - any act of giving away any dangerous drug and/or controlled precursor and 

essential chemical whether for money or any other consideration; 

v. Trading - transactions involving the illegal trafficking of dangerous drugs and/or controlled 

precursors and essential chemicals using electronic devices such as, but not limited to, text 

messages, e-mail, mobile or landlines, two-way radios, internet, instant messengers and 

chat rooms or acting as a broker in any of such transactions whether for money or any other 

consideration in violation of the Act; 

w. Use - any act of injecting, intravenously or intramuscularly, of consuming, either by 

chewing, smoking, sniffing, eating, swallowing, drinking or otherwise introducing into the 

physiological system of the body, any of the dangerous drugs; 

Article II 

Creation of Operation ìPrivate Eyeî Reward Committee 

SECTION 2. Composition - the Operation ìPrivate Eyeî Reward Committee is hereby 

created to deliberate on claims for rewards and grant the appropriate monetary rewards. It 

shall be composed of the Director General, PDEA as chairman, the Deputy Director General


for Operations of the PDEA; the Director for Financial Management Service, PDEA; two (2) 

from the business sector, one (1) from the academe, and one (1) from the religious sector as 

members. The Dangerous Drugs Board shall appoint men and women of proven integrity 

and probity from the business, religious and academe sectors as members of the committee. 

A majority of the members present in a meeting called by the Chairman for the purpose of 

deliberating and voting on claims for rewards shall constitute a quorum. 

SECTION 3. Secretariat - The Operation ìPrivate Eyeî shall be manned by a Secretariat 

whose members shall be appointed by the Chairman, Operation ìPrivate Eyeî from 

among the personnel of PDEA. It shall assist the Operation ìPrivate Eyeî Reward Committee 

in the exercise of its powers and functions. 

Article III 

Powers, Duties and Functions 

SECTION 4. Operation ìPrivate Eyeî Reward Committee shall have the following 

powers and functions: 

a. Orchestrate an integrated information campaign to encourage the active participation of 

the citizenry in identifying and reporting drug personalities and their nefarious activities in 

their respective neigborhoods and communities; 

b. Collect information on illegal drug transactions through the Information Report Forms 

(IRF); 

c. Receive, evaluate, process information and direct concerned PDEA and other law enforcement 

agencies to validate veracity of the report and conduct anti-illegal drug action 

regarding the referred information; 

d. Investigate and determine whether or not an anti-illegal drug operation which resulted in 

the arrest of suspects and seizure of illegal drugs and laboratory equipment was the product 

or the result of the information provided by the informant claiming for the reward; 

e. Provide rewards to informants who have provided timely and accurate information leading 

to apprehension, eradication, confiscation, or arrest of suspected drugs, trafficker, source, 

or dismantling of clandestine laboratories after thorough deliberation and majority vote of the 

Committee members meeting specifically for the purpose and further provided that there is a 

quorum. The secretariat may conduct investigations and researches to determine the value 

of drugs and equipment for purposes of determining the reward due; 

f. Raise funds for Operation ìPrivate Eye;î 

g. Grant rewards in special/meritorious cases even if the informant did not satisfy the procedural 

requirements, provided that the decision of the rewards committee is unanimous; and 

h. Operation ìPrivate Eyeî Reward Committee shall have the sole and exclusive discretion to 

grant rewards based on these Guidelines. 

SECTION 5. Chairman - The Chairman of Operation ìPrivate Eyeî shall have the 

following powers, duties and functions:


a. Appoint the members of the Operation ìPrivate Eyeî Secretariat coming from the PDEA 

as prescribed by these Guidelines; 

b. Approve and implement the program of action of Operation ìPrivate Eyeî; 

c. Call for a meeting of the Operation: ìPrivate Eyeî Reward Committee for the purpose of 

deliberating on the claims for rewards of informants; and 

d. Approve the release of funds for rewards based on the recommendation of the committee 

and for other activities of Operation ìPrivate Eyeî. 

SECTION 6. Operation ìPrivate Eyeî Secretariat. The Private Eye Secretariat shall: 

a. Prepare the program of action of the project on a yearly basis incorporating therein the 

targets for the year and expected funding requirement; 

b. Receive Information Report Forms, task operating units of the PDEA and other law enforcement 

agencies, monitor result of operations and submit a report of investigation on the 

claims for reward to the Operation ìPrivate Eyeî Reward Committee for deliberation; 

c. Conduct investigation and research in relation to its function; and 

d. Contact and inform the informant/claimant or his representative of the approval/ disapproval 

of the claim and the amount of reward to be given. 

Article IV 

Procedures and Requirements 

SECTION 7. Requirements and Procedures in Order to Qualify for the Reward - To 

Qualify for the renewal under Operation ìPrivate Eyeî, the following requirements must be 

complied with: 

a. The informant is not a member of the Dangerous Drugs Board and its secretariat, 

Philippine Drug Enforcement Agency, Philippine National Police, Armed Forces of the Philippines, 

National Bureau of Investigation, Philippine Coast Guard, Bureau of Customs or any 

government agency exercising enforcement function; 

b. The IRF containing the detailed information on illegal drug activity must reach the PDEA 

before the commencement of the successful anti-illegal drug operation; 

c. The PDEA National Office shall direct the PDEA Regional Offices, PDEA Services or 

other law enforcement units to conduct the anti-illegal drug operation based on the information 

derived from the IRF; 

d. There must be an anti-illegal drug operation that resulted in arrests and/or seizures as 

enumerated in these Guidelines; 

e. The reward shall be given after verification of all information and estimate of the reward 

are finalized and approved by the Operation ìPrivate Eyeî Reward Commitee;

1292 


f. The reward must be claimed at the PDEA personally by the claimant presenting the original 

copy of the IRF; 

g. Rewards not claimed within one year after the approval of the Rewards Committee are 

deemed forfeited; and 

h. The Operation: ìPrivate Eyeî Committee shall have the sole power and responsibility in 

approving claims for rewards. 

SECTION 8. Procedure in Accomplishing the Information Report Form (IRF) - 

a. The summary of information must be in the handwriting of the informant or in the case the 

informant cannot write, by and the person with the informantís approval and direction. In the 

latter case, it is necessary that the thumb-mark be that of the informant; 

b. The following questions and information requirements in the IRF must be accomplished as 

follows: 

What: refers to the illegal drug activity being reported, like importation of dangerous 

drugs, sale, administration, delivery, distribution and transportation, manufacture, of dangerous 

drugs, possession and other prohibited acts provided for in Section II of the Act; 

Who: refers to persons and drug groups directly involved in the illegal drug activity, 

financiers and protectors; 

Where: refers to the exact address of the place where the illegal drug activity will 

happen, is happening or has happened. The street number, barangay, town/city and province 

must be included; 

When: refers to the date and if possible the time that the illegal drug activity will 

happen, is happening or has happened if there is a possibility that the activity will be repeated. 

If possible, enough time must be given to PDEA to develop and plan the operation to 

increase the success rate; 

Why: refers to the motive of the person involved in the illegal activity or the reasons 

why the informant believes that an illegal drug activity is taking place; 

How: refers to the method used in the illegal drug activity that might help PDEA in its 

operation. This may include among others, the type of vessels/vehicles used, the method of 

delivery and other relevant information; 

Others: refer to other data that might be helpful to law enforcement agencies in the 

conduct of the operation, maps, sketches, photographs and other documents can be attached 

to the IRF; 

Progress Report: refers to the intention of the informant to give additional information 

to PDEA; 

Codename: refers to any alias used by the informant for the purpose of identification 

by the Operation ìPrivate Eyeî secretariat. This is used to conceal the identity of the informant 

following the principle enunciated in this project.


Thumb-Mark: refers to the right thumb-mark of the informant which will identify him as 

the rightful claimant of the reward; and 

Information Report Form (IRF) No. refers to the serial number of the form. 

c. The codename and thumb-mark are necessary in filling up the IRF. The absence of those 

requirements shall be ground for denial of the claim for reward. 

SECTION 9. Submission of IRF to PDEA - 

a. The original IRF serves as evidence that the claimant is the informant who reported the 

illegal drug activity, hence it must be in the possession of the informant at the time that he is 

claiming for the reward. Only the photocopy of the original shall be mailed or sent to the 

PDEA; 

b. Illegal drug activity may be reported to Operation ìPrivate Eyeî secretariat through the 

following means: 

By mail or courier/facsimile to the following addresses: 

PDEA National Office 

Operation: ìPrivate Eyeî 

Camp Crame, Quezon City 

Fax No. 7224270 

PDEA Regional Offices 

SECTION 10. Procedures in Providing Information on Illegal Drugs Activity Through 

E-mail - 

a. Section 8, Article IV of these Guidelines shall be applied to all informants sending information 

via e-mail in order to qualify for reward. 

b. That the informant must accomplish the Operation ìPrivate Eyeî Information Report Form 

(IRF) attached to the PDEA website. 

c. The Private Eye Secretariat will send a confirmation via e-mail to the informant that the 

information has been received and a password will be provided. 

d. The informant must remember the password provided by the Operation ìPrivate Eyeî 

Secretariat for confirmation when claiming the reward, provided that the information sent 

resulted in a successful operation. 

e. That the PDEA shall maintain a high level of the security in safeguarding the system and 

the information contained in the website. 

Article V 

Reward Schedule

1294 


SECTION 11. Reward Schedule, Unless Otherwise revised by the Dangerous Drugs 

Board, the reward schedule shall be as follows: 

a. Confiscation or Recovery of Shabu, Cocaine, Heroin 

Less than 200 grams Minimum of P1,000 + 100/gm in excess of 1 gm 

200 gms to less than 500 gms P20,000 +P80/gm in excess in 200 gms 

500 gms to less than 1 kg P44,000 +P60/gm in excess in 500 gms 

1.0 kg to less than 2 kgs P74,000 + 50/gm in excess of 1 kgm 

2.0 kgs to less than 5 kgs P124,000 + P40/gm in excess of 2,000 gms 

5.0 kgs to less than 10 kgs P244,000 + P30/gm in excess of 5 kgs 

10 kgs to less than 20 kgs P394,000 + P20/gm in excess of 10 kgs 

20 kgs to less than 50 kgs P594,000 +P10/gm in excess of 20 kgs 

50 kgs to less than 100 kgs P894,000 +P5/gm in excess of 50 kgs 

100 kgs to less than 200 kgs P1.144 million + P2,500/kg in excess of 100 kgs 

200 kgs or more P1.395 million + P1,500/kg in excess of 200 kgs 

In the event that Ephedrine or Pseudoephedrine is confiscated, the reward shall be 

computed at 80% of the reward schedule as provided above. 

An additional of 20% of the total reward shall be given to the informant if drug pusher/ 

trafficker is arrested in the operation. The purity of the confiscated drugs shall be considered 

in the computation of the reward following the formula: computed reward multiplied by 

percentage purity of the confiscated illegal drugs as certified by government forensic laboratories. 

b. Confiscation/Recovery of Ecstasy Tablets (MDMA) and other Designer Drugs 

13 to 266 tablets P100/tablet 

267 to 666 tablets P20,000 + P80/tablet in excess of 266 tablets 

667 to 1,333 tablets P44,000 + P60/tablet in excess of 666 tablets 

1,334 to 2,666 tablets PP74,000 + P50/tablet in excess of 1,333 tablets 

2,667 to 6,666 tablets P124,000 + P40/tablet in excess of 2,666 tablets 

26,667 to 66,66 tablets P594,000 + P10/tablet in excess of 26,666 tablets 

66,667 to 133,333 tablets P894,000 +P5/tablet in excess of 66,666 tablets 

133,334 to 266,666 tablets P1,144 million + P2,500/1,334 tablets in excess of 133,334 

tablets 

266,667 to 666,666 tablets P1,395 million + P1,500/1,334 tablets in excess of 266,667 

tablets 

An additional of 20% of the total reward shall be given to the informant if the drug 

pusher/trafficker is arrested during the operation. The purity of the confiscated drugs shall 

be considered in the computation of the reward following the formula: computed reward 

mutiplied by percentage purity of the confiscated illegal drugs as certified by government 

forensic laboratories. 

c. Confiscation or Recovery of Other Diverted Precursors - Ten percent (10%) of the 

current local market value as determined by the board shall be given as reward when N- 

Acetylanthranilic Acid, Ergometrine, Isosafrole, Lysergic Acid, 3.4-methelenedioxyphenyl-


2-propanone, 1-phenyl-2-propanone, Piperonal and Safrole are confiscated. Five percent 

(5%) of the current local market value of essential chemicals shall be given as reward when 

Acetone, Acetic anhydride, Anthranillic Acid, Ether Acid, Ethyl Ether, Hydrochloric acid, 

Methyl ethyl ketone, Phenylacetic acid, Piperidine, Potassium permanganate, Sulfuric acid, 

and toluene is confiscated. Furthermore, the purity of the confiscated precursors and essential 

chemicals shall be considered in the computation of the reward following the formula: 

computed reward mutliplied by percentage purity of the confiscated precursors and essential 

chemicals as certified by government forensic laboratories. 

d. Confiscation or Recovery of Marijuana, Hashish, Seeds - Two percent (2%) of the 

DDB value of the confiscated/destroyed crops and its derivatives up to a maximum of 

P500,000.00 shall be given to informants who gave information provided that the cultivator/ 

planter is arrested. 

e. Dismantling of Clandestine Laboratories - For purposes of the Operation ìPrivate Eyeî 

Reward System, dismantled, clandestine laboratories for shabu shall be classified and be 

given the following reward: 

1. Small Clandestine Laboratory (Production Capacity is less than 10 kilos/batch) 

- Reward of P500,000.00 + computed reward under Section 11, paragraph 

a, b and c of the Guidelines 

2. Medium Clandestine Laboratory (Production capacity of 10 kilos or more but 

less than 50 kilos/batch) 

-Reward of P1,000,000.00 + computed reward under Section 11, paragraph 

a, b and c of the Guidelines 

3. Large Clandestine Laboratory (Production capacity of 50 kilos or more/batch) 

-Reward of P1.5 Million + computed reward under Section 11, paragraph a, b 

and c of the Guidelines. 

Article VI 

Miscellaneous Provisions 

SECTION 12. Funding - Funds needed for the reward shall be derived from yearly 

appropriation provided by Congress to the DDB and the PDEA and from funds raised by the 

Operation ìPrivate Eyeî Rewards Committee and other non-government organizations. 

SECTION 13. Pending Claims for Reward - All claims for rewards pending with the 

Dangerous Drugs Board and the former National Drug Law Enforcement and Prevention 

Coordination Center shall be turned over to the PDEA Operation: ìPrivate Eyeî Committee 

for its proper disposition. 

SECTION 14. Separability Clause - If any provision of these Guidelines or the application 

thereof to any person or circumstance is held to be invalid, the other provisions of 

these Guidelines and the application of such provision to other persons or circumstances 

shall not be affected thereby.


SECTION 15. Effectivity - These Guidelines shall take effect immediately after its 

approval by the Dangerous Drugs Board. 


(SGD.) JAIME M. VIBAR (SGD.) MIGUEL A. PEREZ-RUBIO 

(Representing the President, (President, Katotohanan Foundation -NGO) 

Integrated Bar of the Philippines) Regular Member 

Regular Member 

(SGD.) EDGAR C. GALVANTE (SGD.) ANTONIO S. LOPEZ 

Undersecretary (Undersecretary, Representing the 

Regular Member Secretary of Health) 

Ex-Officio Member 

(SGD.) AGNES VST DEVANADERA (SGD.) LOURDES G. BALANON 

(Undersecretary, Representing the (Undersecretary, Representing the 

Department of Interior and Local Government) Secretary of Social Welfare and 

Ex-Officio Member and Development) 


(SGD.) FRANKLIN M. EBDALIN (SGD.) RAMON C. BACANI 


Secretary of Foreign Affairs) Secretary of Education) 

Ex-Officio Member Ex-Officio Member 

(SGD.) ANSELMO S. AVENIDO, JR. (SGD.) MA. MERCEDITAS N. GUTIERREZ 

(Director-General, Philippine Drug (Undersecretary, Representing the 

Enforcement Agency) Department of Justice) 


(SGD.) PAOLO BENIGNO A. AQUINO IV (SGD.) BERNARDO T. LASTIMOSO 

(Chairperson, National Youth Commission) Undersecretary, Permanent Member, 

Ex-Officio Member Dangerous Drugs Board 

(SGD.) ISABEL F. INLAYO 

(Director, Representing the Chair, 

Commission on Higher Education) 


(SGD.) JOSE D. LINA, JR. 

Secretary, Department of the Interior and Local Government and 

OIC Chairman, Dangerous Drugs Board 

Attested: 

(SGD.) EFREN Q. FERNANDEZ 

Undersecretary 

Executive Director, Dangerous Drugs Board 

--o0o--




General Guidelines for the Conduct of Random 

Drug Testing for Secondary and Tertiary Students 

Pursuant to Section 36 (c), Article III of Republic Act No. 9166, the following guidelines 

are hereby promulgated. 

The guidelines shall be applicable to the random drug testing of students in public and 

private secondary, tertiary/higher education institutions and post-secondary technical vocational 

schools. These guidelines outline the purposes of the random drug-testing program, as 

well as procedures and necessary consequences of a positive drug test result after confirmation. 

All procedures undertaken shall take into account the ideals of fairness and rehabilitation 

and not isolation of the drug dependent. The school must not violate the constitutional 

rights to due process, equal protection and self-incrimination. 

A. GUIDING PRINCIPLES IN THE IMPLEMENTATION OF RANDOM DRUG TESTING IN 

SCHOOLS AND MANAGEMENT OF DRUG TEST RESULTS 

1. Government recognizes the primary responsibility of the family, particularly the parents 

for the education and awareness of its members of the ill effects of dangerous drugs. 

2. Parental involvement shall be maximized in the implementation of drug education, random 

drug testing, treatment and rehabilitation of drug users and dependents. 

3. The school, with the assistance of Local Government Units (LGUs) and other agencies 

where the school is located, has the obligation to employ every reasonable means to provide 

a healthy and drug-free environment to its populace. 

4. Cognizant of the right of the students to continue and complete their studies, the government 

and the schools shall give emphasis to the implementation of measures aimed at guidance 

and counselling together with the treatment and rehabilitation of any student found to 

have used or to be dependent on dangerous drugs. 

5. Academic freedom of institutions of higher learning shall be respected in the implementation 

of random drug testing and all other pertinent provisions of RA 9165. 

6. The Implementation of drug abuse prevention and education programs in schools shall be 

intensified as an integral part of the over-all demand reduction efforts of the government. 

7. The random drug testing shall be implemented as a collaborative undertaking of the government, 

the schools, the students and their parents. The whole process shall not in any 

manner be utilized to harass the students. 

8. Random drug testing shall be implemented primarily for prevention and rehabilitation.


9. The drug-testing program shall guarantee and respect the personal privacy and dignity of 

the student. 

10. The drug test results shall be treated with utmost confidentiality. 

11. The test results shall not be used in any criminal proceedings. 

B. PURPOSES OF RANDOM DRUG TESTING 

1. To determine the prevalence of drug users among the students 

2. To assess the effectivity of school-based and community-based prevention programs 

3. To deter the use of illegal drugs 

4. To facilitate the rehabilitation of drug users and dependents. 

5. To strengthen the collaboration efforts on identified agencies against the use of illegal 

drugs and in the rehabilitation of drug users and dependents. 

C. DEFINITION OF TERMS 

ìDrug Counselorî shall mean a person trained in the techniques of guidance counseling 

particularly dealing with cases of drug dependency. The Drug Testing Coordinator shall 

designate such person. 

ìDrug Testing Coordinatorî shall be the point person in the school tasked with handling 

random drug testing which shall be the principal of a secondary school, the administrator of 

a technical vocational education and training institution or the administrator appointed by the 

president/chief executive officer in tertiary institutions. 

ìParentsî shall, for purposes of these guidelines, include court appointed guardians. 

ìRandom selectionî refers to the unbiased process of selecting students who are to undergo 

drug testing. 

ìRehabilitationî is the dynamic process, including after-care and follow-up treatment, directed 

towards the physical, emotional/psychological, vocational, social and spiritual change/ 

enhancement of a drug dependent to enable him/her to live his/her capabilities and potentials 

and render him/her to become a law-abiding and productive member of the community. 

ìSchoolsî shall mean an institution that has as its primary purpose the education of students 

including secondary, tertiary and technical vocational education and training institutions. 

ìSelection Boardî shall be the board constituted at the level of the school composed of the 

Drug Testing Coordinator as chairperson, one representative each from the students, faculty 

and parents as members. The authorized governing body duly recognized by their respective 

constituents shall choose the representatives from these stakeholders based on a set of 

selection criteria formulated for this purpose. In the absence of a parentís association, the 

School Head may appoint any parent who shall be a member of the Selection Board. 

ìSupervising Agencyî shall refer to the government agency that exercises supervision over 

the school such as the Department of Education (DepEd), Commission on Higher Education 

(CHED), or the Technical Education and Skills Development Authority (TESDA).


D. PROCEDURES IN THE CONDUCT OF RANDOM DRUG TESTING 

1. Notification 

a. The Supervising Agency through an appropriate order that includes these guidelines on 

random drug testing, shall inform all schools under its supervision about the governmentís 

actions against illegal drugs. 

The schoolsí administration shall be required to explain these provisions and their procedures 

to the school community and when applicable, include these in the schoolsí handbook 

or listing of procedures. (The Supervising Agenciesí Memorandum Circulars should 

include a list of DOH-accredited Testing Centers/Laboratories) 

b. All students and their parents shall be notified in writing on the process and manner by 

which the random drug testing shall be conducted. Such notification may be sent at any time 

during the school term. Failure to return the acknowledgment receipt shall not be a bar to the 

conduct of the drug testing. 

2. Samples 

a. The Supervising Agency shall inform randomly selected schools on their inclusion in the 

random drug testing program. 

b. The whole student population of the school selected shall be included in the random 

sampling. 

c. The number of samples should yield a statistical 95% confidence level for the whole 

student population. 

3. Selection of Samples 

a. The Drug Testing Coordinator shall convene the Selection Board within five days from the 

receipt of notice from the Supervising Agency stating that the school is included in the 

program. 

b. On the day of the testing, the Selection Board shall conduct the random selection of those 

to be tested. 

c. The Selection Board shall ensure the confidentiality and integrity of the random selection 

process. 

d. The selection process shall be random through a lottery, which may be computerized, or 

in any other manner that shall be agreed upon by the Board 

e. The random selection of students and the drug testing shall be done on the same way. 

f. Prior to testing, the selected students shall be asked to reveal the prescription medicines, 

vitamins, food supplements that they had ingested within the past five (5) days. The Drug 

Testing Coordinator shall keep the listing and utilize this in the evaluation of the confirmatory 

drug test.


g. The laboratory shall follow the DOH prescribed guidelines in the collection of urine specimens. 

Universal precautions shall be observed at all times. DOH Prescribed Guidelines shall 

be posted in strategic places/visible areas of the school. 

h. The monitor assigned to ensure the integrity of the collection process should be of the 

same sex as the student. 

i. The drug testing shall be done in the school and conducted by a duly accredited drugtesting 

laboratory, the school, through its respective health personnel, shall assist the Drug 

Testing Laboratory in the conduct of the drug testing. 

j. The Drug Testing Coordinator shall ensure the confidentiality and integrity of the random 

drug testing for the students, teachers, administration and personnel of the school. It is 

strongly recommended that the drug testing for students, the teachers, administration and 

personnel be done simultaneously. 

4. Treatment of Random Drug Test Results 

a. The results of the test shall be strictly confidential. No school shall publish or post results 

whether positive or negative. 

b. Any person who violates the rules of confidentiality of the results and selection shall be 

liable under Section 72 of RA 9165 and such other appropriate laws. 

c. The laboratory shall place the drug test result in a sealed envelope and deliver the same via 

personal service to the Drug Testing Coordinator. The Drug Testing Coordinator shall then 

inform all the students tested individually of the test results. 

d. In case the test results are positive, the Drug Testing Coordinator shall inform both the 

student and parent concerned that a confirmatory test shall be conducted. The student shall 

be told to inform his/her parents of the scheduled conference with the Drug Testing Coordinator. 

The student shall be advised to refrain from revealing the test results to other persons. 

e. During the scheduled conference, the Drug Testing Coordinator shall relay to the parents 

full information on the process that shall be undertaken for the confirmatory test. In the event 

that the parents do not appear on the scheduled conference, the student shall be informed of 

the schedule of the confirmatory test. 

f. The confirmatory drug test shall be conducted in the same manner as the initial drug test. 

g. The results of the confirmatory test shall be transmitted by the laboratory in a sealed 

envelope and handed directly to the Drug Testing Coordinator. 

h. The Drug Testing Coordinator shall inform both the parents and the student of the results of 

the test. 

i. The Drug Testing Coordinator shall not delegate such task of informing the student and 

parent to any other person, nor shall the Drug Testing Coordinator reveal the results of the 

test to any person other than the student and parent.


k. The Drug Testing Coordinator shall refer the student and his/her parent to governmentowned 

DOH-accredited facility or DOH-accredited government physician to determine the 

studentís dependency level. 

l. The student may opt for a private DOH-accredited facility or physician for this initial 

determination provided it is at his/her own expense. 

m. In the event that it is determined that the student is a drug dependent, the school may 

impose the appropriate sanctions against the student as provided for in the schoolís Student 

Handbook and the Manual of Regulations for Private Schools, provided that in the case of 

public secondary schools, if the student is later on found to have been rehabilitated, the 

student shall then be allowed to re-enroll. 

n. The student shall then undergo a three (3) month observation and counseling period under 

the supervision of the DOH-accredited facility or physician in consultation with the parent. 

Such process of observation and counseling shall be done in coordination with the Drug 

Counselor of the school. 

o. At the end of the three months, it is hoped that with the counseling done, the student will be 

properly rehabilitated. 

If student shows no signs of improvement, recovery or fails the drug test the second time, 

the DOH-accredited facility or physician, may make a recommendation to the student, parent, 

and Drug Testing Coordinator to have the student referred to a DOH-accredited facility 

suited to the studentís level of dependency. If another drug testing is conducted for another 

period on the same student population, and the student is found positive the second time, the 

school shall proceed in accordance with Section 61, R.A. 9165. 

The parent and the student may choose to enroll the student in a private rehabilitation 

center or program or opt to avail of the rehabilitation services of the government through a 

DOH-accredited facility. 

If the parents refuse to act, the school shall proceed in accordance to Sec. 61 of RA 

9165 without prejudice to the provision of Section 73, RA 9165. 

E. REPORTORIAL REQUIREMENTS OF RESULTS OF THE RANDOM DRUG TESTING 

1. The Drug Testing Coordinator, Drug Counselor and employees of DOH-accredited facilities, 

testing laboratories, shall not reveal the names of the students or test results to any other 

persons except to the students concerned or his/her parents. 

2. The aggregate test results from each school which shall not include the identities of the 

students tested, shall be submitted by the School Head to the Division Superintendent of 

DepEd for secondary schools, the Regional Director of CHED for tertiary schools and 

Training Institution Administrator for TESDA for consolidation for the purpose of evaluating 

the efficacy and effectiveness of drug abuse prevention programs. 

F. Training of Guidance Counselors


The Department of Education, Commission on Higher Education, Technical Education 

and Skills Development Authority, the Philippine Drug Enforcement Agency and Dangerous 

Drugs Board in coordination with each other, shall formulate and conduct the training program 

for guidance counselors for the purpose of enhancing their skills in handling drug 

abuse prevention programs and handling drug dependency cases. 

G. EXPENSES OF THE PROGRAM 

The Department of Health, in coordination with the Supervising Agencies shall designate 

the drug testing laboratories that shall be utilized for purposes of the program. 

Payment of testing fees shall be done by the government thru Department of Health to 

the Drug Testing Laboratories. 

H. ENFORCEMENT OF COMPLIANCE 

Students who refuse to undergo random drug testing shall be dealth with in accordance 

with the rules and regulations of the schools: provided that at no time shall refusal to 

undergo testing give rise to a presumption of drug use or dependency; provided further that 

the school may impose sanctions on such refusal other than the offense of drug use or 

dependency. 

Schools that refuse to implement the random drug testing program shall be liable under 

Section 32 of RA 9165 without prejudice to other administrative sanctions imposed by the 

Supervising Agencies. The Supervising Agency shall report the same to the Philippine Drug 

Enforcement Agency (PDEA) and the Dangerous Drugs Board (DDB). 


Separability clause . If any provision of these Guidelines or the application thereof to 

any person or circumstance is held to be invalid, the other provisions of these Guidelines 

and the application of such provision to other persons or circumstances shall not be affected 

thereby. 

Effectivity. These Guidelines shall take effect immediately after its approval by the 

Dangerous Drugs Board. 



Representing the President, (President, Katotohanan Foundation -NGO) 

Integrated Bar of the Philippines Regular Member 



Undersecretary , Permanent Member (Undersecretary, Representing the 

Dangerous Drugs Board Secretary of Health) 

Ex-Officio Member




Department of Interior and Local Government) Secretary of Social Welfare and 







(SGD.) ROLANDO R. DIZON (SGD.) ANSELMO S. AVENIDO, JR. 

(Chairman, Commission on Higher (Director-General, Philippine Drug 

Education) Enforcement Agency) 



(Chairperson, National Youth Commission) (Undersecretary, Permanent Member 

Ex-Officio Member Dangerous Drugs Board) 

(SGD.) MERCEDITAS N. GUTIERREZ 

(Undersecretary, Representing the DOJ) 



Secretary, Department of Interior and Local Government and 



Attested: 




--o0o-- 


General Guidelines for the Implementation of Mandatory Drug 

Testing to Officers and Members of the Military, Police, and Other 

Law Enforcement Agencies 

I 

References 

1. Section 36, Article III of Republic Act 9165, otherwise known as the Comprehensive 

Dangerous Drugs Act of 2002 mandates the conduct of random drug testing to officers and


employees of public and private offices as contained in the companyís work rules and 

regulations, which shall be borne by the employer, for purposes of reducing the risk in the 

workplace. Likewise, students of tertiary and secondary schools shall, with notice to parents, 

undergo a random drug testing. Mandatory drug test shall be conducted to all applicants for 

driverís license, firearmís license and permit to carry firearms. The same Section mandates 

the conduct of an annual mandatory drug test of the officers and members of the military, 

police, and other law enforcement agencies. Moreover, all candidates for public office are 

required to undergo mandatory drug testing. In addition to the penalties stated in the Section, 

those found to be positive for dangerous drugs use shall be subject to the provisions of 

Section 15 of this Act. 

2. AFP Articles of War; 

3. Republic Act 6975; 

4. Republic Act 8551; 

5. The Civil Service Law and Rules; and 

6. The DOH-IRR and Manual of Operations on Drug Testing 

II. 

Rationale 

It is the policy of the State to safeguard the integrity of the territory; and the well being 

of its citizenry from the harmful effects of dangerous drugs on their physical and mental wellbeing, 

and to defend the same against acts or omissions detrimental to their development 

and preservation. It is also the policy of the State to promote a high standard of ethics in the 

public service. Public officials and employees shall at all times be accountable to the people 

and shall discharge their duties with utmost responsibility, integrity, competence and loyalty, 

act with patriotism and justice, lead modest lives, and uphold public interest over personal 

interest. Hence, to maintain these standards, public officials and employees must be free 

from using dangerous drugs. 

Toward this end, the Government shall pursue a drug testing program in compliance 

with Section 36 of RA 9165 requiring all officers and members of the military and law 

enforcement agencies, such as the Philippine National Police, Bureau of Fire Protection, 

and the Bureau of Jail Management and Penology, among others, to undergo mandatory 

drug testing. 

In the interest of public service, the following rules are hereby adopted in order to carry 

out the mandatory drug testing of the officers and personnel of the above-mentioned agencies 

pursuant to the aforesaid Section of RA 9165. 

III 


a. Accreditation - The formal authorization issued by the Department of Health (DOH) to an 

individual, partnership, corporation or association to operate a laboratory and rehabilitation


facility after compliance with the standards set at a maximum achievable level to stimulate 

improvement over time; 

b. Board - refers to the Dangerous Drugs Board under Sec. 77, Art. IX of RA 9165 (Comprehensive 

Dangerous Drug Act of 2002); 

c. Center - Any of the treatment and rehabilitation centers which undertake the treatment, 

after-care and follow up teatment of drug dependents as referred to in Section 75, Article 

VIII of RA 9165. It includes institutions, agencies and the like whose purposes are : the 

development of skills, arts and technical know-how; counseling; and/or inculcating civic, 

social and moral values to drug patients, with the aim of weaning them away from dangerous 

drugs and keeping them drug-free, adapted to their families and peers, and readjusted into 

the community as law abiding, useful and productive citizens; 

d. Confinement - refers to the residential treatment and rehabilitation of drug dependent 

personnel in the center; 

e. Confirmatory Test - An analytical test using a device tool or equipment with different 

chemical or physical principle that is more specific which will validate and, confirm the result 

of the screening test. It refers to the second or further analytical procedure to more accurately 

determine the presence of dangerous drugs in a specimen; 

f. Custody and Control Form (CCF) - A DOH approved form used to document the collection, 

transport, security, and test results of the specimen; 

g. Dangerous Drugs - Include those listed in the schedules annexed to the 1961 Single 

Convention on Narcotics Drugs, as amended by the 1972 Protocol, and in the Schedules 

annexed to the 1971 Single Convention on Psychotropic Substances as enumerated in the 

annex, which is an integral part of RA 9165; 

h. Dependence - is a distortion of normal physiological process which results from a prolonged 

administration of addicting drugs and which is manifested by the necessity for the 

presence of adequate amount of one of these drugs in the body for the maintenance of 

physical equilibrium; 

i. Drug Abuse - is the use of a chemical substance, licit or illicit which results in an individualís 

physical, mental, emotional or social impairment; 

j. Drug dependent- refers to an individual who is dependent on a certain drug or drugs; 

k. GCMS - Gas Chromatography and Mass Spectrometry, powerful separation technique 

use to analyze drug. Toxic substance, explosive and unknown samples; 

l. ìFor Causeî or ìProbable Causeî testing - refers to the kind of drug testing which requires 

a probable cause or a reasonable ground to believe that the person to be tested is using or is 

under the influence of dangerous drugs; 

m. Laboratory - Refers to the facility of a private or government agency that is capable of 

testing a specimen to determine the presence of dangerous drugs therein;


n. Mandatory drug testing - refers to the compulsory submission of a client/donor/subject for 

drug testing as required by RA 9165 and by the agenciesí internal rules and regulations; 

o. Random drug testing - refers to the test performed on personnel who are selected following 

no specific pattern and without prior notice; 

p. Rehabilitation - The dynamic process, including after-care and follow-up treatment, directed 

towards the physical, emotional/psychological vocational; social and spiritual change/ 

enhancement of a drug dependent to enable him/her to live without dangerous drugs, enjoy 

the fullest life compatible with his/her capabilities and potentials and render him/her able to 

become a law-abiding and productive member of the community; 

q. Screening Test - A rapid test performed to establish a potential/presumptive positive result. 

It refers to the immunoassay test to eliminate a ìnegativeî specimen, i.e. one without the 

presence of dangerous drugs, from further consideration and to idenfity the presumptively 

positive specimen that requires confirmatory test; 

r. Use - Any act of injecting, intravenously or intramuscularly or consuming, either by chewing, 

smoking, sniffing, eating, swallowing, drinking or otherwise introducing into the physiological 

system of the body of any of the dangerous drugs. 

IV 

General Guidelines 

1. All officers and members, both Uniformed and Non-Uniformed Personnel (UP/NUP), of 

the military, to include the para-military forces, police, jail, fire, and other law enforcement 

agencies shall be subjected to annual mandatory drug testing. The selection of the personnel 

would be done on a random basis but no personnel must be exempt from the chance of being 

chosen. 

2. The drug testing shall be conducted by any government forensic laboratory or by any 

DOH accredited drug-testing laboratory, under the strict supervision of the agency concerned. 

V. 

Procedures for the Conduct of Drug Testing 

1. The authorized specimen collector will ask the subject personnel/applicant to remove any 

unnecessary outer garments such as a coat or jacket that might conceal items or substances 

that could be used to tamper with or adulterate the subject personnel/applicantís urine specimen. 

The authorized specimen collector will ensure that all personal belongings such as a 

puse or briefcase remain with the outer garments. 

2. The subject personnel/applicant will be instructed to wash and dry his/her hands prior to 

urination. After washing hands, subject personnel/applicant will remain in the presence of 

the authorized specimen collector and will not have access to any unregulated source of 

water, soap, dispenser, cleaning agent, or any other materials that could be used to adulterate 

the specimen.


3. The authorized specimen collector will give the subject personnel/applicant a clean specimen 

container. The subject personnel/applicant may provide his/her specimen in a privacy 

of a toilet cubicle or otherwise partitioned area that allows for individual privacy. The authorized 

specimen collector will remain outside the cubicle until the specimen is collected. The 

subject personnel/applicant will be instructed not to flush the toilet until the specimen is 

handed to the authorized specimen collector. 

4. Upon receiving the specimen from the subject personnel/applicant, the authorized specimen 

collector will: 

a. Check the volume of the urine in the specimen container. 

b. Check the temperature of the urine specimen. 

c. Inspect the specimen to determine its color and appearance for any signs of 

contaminants. Any unusual findings will be noted on the chain of custody form. 

5. Both the subject personnel/applicant and the authorized specimen collector will keep the 

specimen container/specimen bottles in view at all times prior to the urine specimen being 

sealed and labelled. 

6. The specimen bottle will have an identification label that contains pertinent information 

such as date of specimen collection, signature of the subject personnel/applicant, specimen 

ID number. 

7. The authorized specimen collector will fill-up completely the specimen Custody and 

Control Form (CCF) and distribute each copy as required. 

VI 

Treatment of Drug Test Results 

1. In accordance with Section 38 of RA 9165, if the urine specimen tested positive, the same 

shall be challenged within fifteen (15) days after the receipt of the result through a confirmatory 

test conducted by any government forensic laboratory or DOH accredited laboratory. 

2. In case of a confirmed positive drug test results, the personnel shall be proceeded against 

in accordance with the internal rules and regulations of the concerned agency. 

3. Confirmed positive test results of applicants for entry shall be a ground for disqualification. 

4. Laboratory report/s of positive results of the screening test and/or after confirmatory test 

shall be treated with confidentiality and shall be disclosed in accordance with the internal 

rules and regulations of the concerned agency. 

5. If confirmed positive, the same shall be ìprima facieî evidence that such person has used 

dangerous drugs, which is without prejudice to the prosecution for other violations of the 

provisions of RA 9165; Provided, that a positive screening test must be confirmed for it to be 

valid in a court of law.


V. 

Funding 

The cost of drug testing of the personnel shall be borne by the concerned agency. 








Permanent Member, Dangerous Drugs Board Secretary of Health) 




Department of Interior and Local Government Secretary of Social Welfare and 












(Chairperson, National Youth Commission) (Undersecretary, Permanent Member, 

Ex-Officio Member Dangerous Drugs Board) 

(SGD.) MA. MERCEDITAS N. GUTIERREZ 

(Undersecretary, Representing the DOJ) 





Attested: 




--o0o--




Guidelines for the Implementation of a Drug Free Workplace 

Policies and Programs for the Private Sector 

In accordance with Article V of Republic Act No. 9165, otherwise known as the Comprehensive 

Dangerous Drugs Act of 2002, and its Implementing Rules and Regulations and 

in consultation with the Tripartite Task Force created under DOLE Department Order No. 

37-03, s. 2002 (Tripartite Task Force), the following guidelines are hereby issued to assist 

employers and employees in the formulation of company policies and programs to achieve a 

drug-free workplace. 

A. 

Coverage 

1. These guidelines shall apply to all establishments in the private sector, including their 

contractors and concessionaires. 

B. 

Formulation of Drug-Free Workplace Policies and Programs 

1. It shall be mandatory for all private establishments employing ten (10) or more workers to 

formulate and implement drug abuse prevention and control programs in the workplace, 

including the formulation and adoption of company policies against dangerous drug use. 

Establishments with less than ten (10) workers are also encouraged to formulate and adopt 

drug-free policies and programs in the workplace. 

2. The workplace policies and programs shall be prepared jointly by management and labor 

representatives and shall be made an integral part of the companyís occupational safety and 

health and related workplace programs. 

3. In organized establishments, the workplace policies and programs shall be included as 

part of the Collective Bargaining Agreements. 

4. Assistance in the formulation and implementation of a Drug-Free Workplace Policies and 

Programs may be sought from the Tripartite Task Force (see Annex 1*), through the Occupational 

Safety and Health Center. The Regional Offices of the DOLE shall serve as focal 

center in their respective areas of jurisdiction in providing information on RA 9165 and on 

the prevention and control of drug abuse in the workplace. 

C. 

Components of a Drug-Free Workplace Policies and Programs 

1. Workplace policies and programs on drug abuse prevention and control to be adopted by 

companies shall include, among others, the following components: 


Quezon City

1310 


a. Advocacy, Education and Training 

i. Employers shall be responsible for increasing awareness and education of their officers 

and employees on the adverse effects of dangerous drugs as well as the monitoring of 

employees susceptible to drug abuse. Topics which may be included in the orientation education 

program shall include, among others, the following: 

- Salient Features of RA 9165 (the Act) and its Implementing Rules and Regulations (IRR) 

- The Company policies and programs on drug-free workplace 

- Adverse effects of abuse and/or misuse of dangerous drugs on the person, workplace, 

family and the community 

- Preventive measures against drug abuse 

- Steps to take when intervention is needed, as well as the services available for treatment 

and rehabilitation. 

ii. Employers are enjoined to display a billboard or streamer in conspicuous places in the 

workplace with standard message like ìTHIS IS A DRUG-FREE WORKPLACE: LETíS KEEP 

IT THIS WAY!î or such other messages of similar import. 

iii. Curricula developed by the Task Force shall be used as widely as possible for awareness 

raising and training. May be accessed through the OSHC website (www.oshc.dole.gov.ph) 

iv. Training on prevention, clinical assessment, and counseling of workers and other related 

activities shall be given to occupational safety and health personnel, the human resources 

manager and the employers and workers representatives. These trained personnel shall 

form part of an Assessment Team which shall address all aspects of drug abuse prevention, 

treatment and rehabilitation. 

v. In the absence of such capability, particularly in small establishments, DOLE shall, to the 

extent possible, provide relevant information on experts and services in their localities. 

vi. In the context of their Corporate Social Responsibility Programs, employers are encouraged 

to extend drug abuse prevention advocacy and training to their workerís families and 

their respective communities. 

b. Drug Testing Program for Officers and Employees 

i. Employers shall require their officials and employees to undergo a random drug test (as 

defined in Annex 2) in accordance with the companyís work rules and regulations for purposes 

of reducing the risk in the workplace. Strict confidentiality shall be observed with 

regard to screening and the screening results. 

ii. Drug testing for teaching and non-teaching staff in private schools shall be in accordance 

with the guidelines provided by DepED, CHED and TESDA. 

iii. Drug testing shall conform with the procedures as prescribed by the Department of 

Health (DOH) (www.doh.gov.ph). Only drug testing centers accredited by the DOH shall be 

utilized. A list of the accredited centers may be accessed through the OSHC website (www. 

oshc.dole.gov.ph).


iv. Drug testing shall consist of both the screening test and the confirmatory test; the latter to 

be carried out should the screening test turn positive. The employee concerned must be 

informed of the test results whether positive or negative. 

v. Where the confirmatory test turns positive, the companyís Assessment Team shall evaluate 

the results and determine the level of care and administrative interventions that can be 

extended to the concerned employee. 

vi. A drug test is valid for one year; however, additional drug testing may be required for just 

cause as in any of the following cases: 

- After workplace-related accidents, including near miss; 

- Following treatment and rehabilitation to establish fitness for returning to work/resumption 

of job 

- In the light of clinical findings and/or upon recommendation of the assessment team. 

c. Treatment, Rehabilitation and Referral 

i. The drug prevention and control program shall include treatment, rehabilitation and referral 

procedure to be provided by the company staff or by an external provider. It shall also 

include a provision for employee assistance and counseling programs for emotionallystressed 

employees. 

ii. The Assessment Team shall determine whether or not an officer or employee found positive 

for drugs would need referral for treatment and/or rehabilitation in a DOH accredited 

center. 

iii. This option is given only to officers and employees who are diagnosed with drug dependence 

for the first time, or who turn to the Assessment Team for assistance, or who would 

benefit from the treatment and rehabilitation. 

iv. Following rehabilitation, the Assessment Team, in consultation with the head of the rehabilitation 

center, shall evaluate the status of the drug dependent employee and recommend to 

the employer the resumption of the employeeís job if he/she poses no serious danger to his/ 

her co-employees and/or the workplace. 

v. Repeated drug use even after ample opportunity for treatment and rehabilitation shall be 

dealt with the corresponding penalties under the Act and its IRR. 

vi. An updated list of drug treatment and rehabilitation centers accredited by the DOH shall 

be disseminated through the OSHC website (www.oshc.dole.gov.ph) 

d. Monitoring and Evaluation 

i. The implementation of the drug-free workplace policies and programs shall be monitored 

and evaluated periodically by the employer to ensure that the goal of a drug-free workplace 

is met. The Health and Safety Committee or other similar Committee may be tasked for this 

purpose. 

D. 

Roles, Rights and Responsibilities of Employers and Employees

1312 


1. The employer shall ensure that the workplace policies and programs on the prevention and 

control of dangerous drugs, including drug testing, shall be disseminated to all officers and 

employees.The employee shall obtain a written acknowledgement from the employees that 

the policy has been read and understood by them. 

2. The employer shall maintain the confidentiality of all information relating to drug tests or to 

the identification of drug users in the workplace; exceptions may be made only where required 

by law, in case of overriding public health and safety concerns; or where such 

exceptions have been authorized in writing by the persons concerned. 

3. Labor unions, federations, workers organizations and associations are enjoined to take an 

active role in educating and training their members on drug abuse prevention and control. 

They shall, in cooperation with their respective private sector partners, develop and implement 

joint continuing programs and information campaigns, including the conduct of capability 

- building programs, peer counseling and values education with the end in view of 

promoting a positive lifestyle and a drug-free workplace. 

4. All officers and employees shall enjoy the right to due process, absence of which will 

render the referral procedure ineffective. 

E. 

Enforcement 

1. The Labor Inspectorate of the DOLE Regional Offices shall be responsible for monitoring 

compliance of establishments with the provisions of Article V of the Act and its IRR and this 

Department Order. 

2. The dissemination of information on pertinent provisions of RA 9165 and the IRR shall be 

included in the advisory visits of the Labor Inspectorate. 

3. The DOLE may, where deemed necessary and appropriate, delegate the monitoring of 

compliance of establishments with the provisions of Article V of the Act to Local Government 

Units thru a Memorandum of Agreement. 

F. 

Consequences of Policy Violations 

1. Any officer or employee who uses, possesses, distributes, sells or attempts to sell, tolerates, 

or transfers dangerous drugs or otherwise commits other unlawful acts as defined 

under Article II of RA 9165 and its Implementing Rules and Regulations shall be subject to the 

pertinent provisions of the said Act. 

2. Any officer or employee found positive for use of dangerous drugs shall be dealth with 

administratively in accordance with the provisions of Article 282 of Book VI of the Labor 

Code and under RA 9165. 

G. 

Effectivity


1. All concerned shall comply with all the provisions of this Department Order within six 

months from its publication in a newspaper of general circulation. 


Annex 2 

Guidelines for the Implementation of A Drug-Free Workplace Policies and Programs 

Definition of Terms: 

a. Administer - any act of introducing any dangerous drug into the body of any person, with 

or without his/her knowledge, by injection, inhalation, ingestion or other means, or of committing 

any act of indispensable assistance to a person in administering a dangerous drug to 

himself/herself unless administered by a duly licensed practitioner for purposes of medication; 

b. Assessment Team - will be composed of the safety and health committee including 

occupational safety and health personnel, human resources managers, employers and 

workersí representatives trained to address all aspects of prevention, treatment and rehabilitation. 

c. Confirmatory Test - an analytical test using a device, tool or equipment with a different 

chemical or physical principle that is more specific which will validate and confirm the result 

of the screening test. It refers to the second or further analytical procedure to more accurately 

determine the presence of dangerous drugs in a specimen. 

d. Dangerous Drugs - include those listed in the Schedules annexed to the 1961 Single 

Convention on Narcotic Drugs, as amended by the 1972 Protocol, and in the Schedules as 

enumerated in the attached Annex which is an integral part of this Act. (Annex A) 

e. Employee - shall mean any person hired, permitted or suffered to work by an employer. 

The term employee includes permanent, regular, temporary, casual, part-time, and contractual 

workers. 

f. Employer - includes any person or entity acting directly, or indirectly in the interest of the 

employer, in relation to an employee and shall include non-profit private institutions or 

organizations. 

g. Instrument - any thing that is used or intended to be used, in any manner, in the commission 

or illegal drug trafficking or related offenses; 

h. Interested Party - refers to the courts, law enforcement agencies or the employer, and 

workerís representatives. 

i. Near Miss - an incident arising from or in the course of work which could have led to 

injuries or fatalities of the workers and/or considerable damage to the employer had it not 

been curtailed.



j. Prevention - is the promotion of drug-free lifestyle thru strategies such as advocacy, 

information dissemination, and capability building through training. 

k. Private Sector Organizations - refer to privately owned companies,corporations, associations, 

foundations, and the like. 

l. Random Drug Test - refers to unannounced schedule of testing with each employee having 

an equal chance of being selected for testing. The policy on the conduct of random drug test 

should be known to both employers and employees. 

m. Screening Test - a rapid test performed to establish potential/presumptive positive result. It 

refers to the immunoassay test to eliminate a ìnegativeî specimen, i.e. one without the 

presence of dangerous drugs, from further consideration and to identify the presumptively 

positive specimen that requires confirmatory test; 

n. Sell/Sale - Any act of giving away any dangerous drug and/or controlled precursor and 

essential chemical whether for money or any other consideration. 

o. Treatment, Rehabilitation and Counseling - the dynamic process, including after-care and 

follow-up treatment, directed towards the physical, emotional/psychological, vocational, social 

and spiritual change/enhancement of a drug dependent to enable him/her to live without 

dangerous drugs, enjoy the fullest life compatible with his/her capacibilities and potentials 

and render him/her able to become a law-abiding and productive member of the community; 

p. Use - any act of injecting, intravenously or intramuscularly, of consuming, either by 

chewing, smoking, sniffing, eating, swallowing, drinking or otherwise introducing into the 

physiological system of the body, any of the dangerous drugs. 

q. Work Accident - shall mean an unplanned or unexpected occurrence that may or may not 

result in personal injury, property damage, work stoppage or interference or any combination 

thereof of which arises out of and in the course of employment. 

r. Workplace - means the office, premises of worksite, where the workers are habitually 

employed and shall include the office or place, where the workers who have no fixed or 

definite worksite regularly report for assignment in the course of their employment. It shall 

also include venues used by the employer for company functions. 







Dangerous Drugs Board Secretary of Health) 

Ex-Officio Member




Department of Interior and Local Government Secretary of Social Welfare and 












(Chairperson, National Youth Commission) (Undersecretary, Permanent Member, 

Ex-Officio Member Dangerous Drugs Board 

(SGD.) MA. MERCEDITAS N. GUTIERREZ (SGD.) PATRICIA A. STO. TOMAS 

(Undersecretary, Representing the DOJ (Secretary of Labor and Employment) 

Ex-Officio Member) Ex-Officio Member 




Attested: 




DEPARTMENT OF AGRICULTURE 


Memorandum Circular No. 9, s. 2003 

Schedule of Fees Pursuant to Section 17, DA AO 8, 

Series of 2002 and Related Guidelines

1316 






--o0o-- 

Memorandum Order No. 15, s. 2003 

Temporary Ban on the Importation of Live Cattle, Sheep and Goats, 

Their Meat and Meat Products; Bovine Embryo; Meat and Bone Meal; 

and Other Feed Ingredients Derived from the Said Animals from Canada 






--o0o-- 

Memorandum Order No. 25, s. 2003 

Supplemental Guidelines in the Labeling of Cartons 

and Monitoring of Utilization of Indian Buffalo Meat 




--o0o-- 

Bureau of Animal Industry Administrative Order No. 17, s. 2003 

Revised Fees of Established Laboratory Services and Products, 

Included Are Fees of the New Services Available at the Drug 

Assay Laboratory - Chemistry Section of the Laboratory 

Services Division, Bureau of Animal Industry 


--o0o--




Administrative Order No. 18 

Additional Schedule of Fees and Charges for Services 

Rendered by the Fertilizer and Pesticide Authority 




--o0o-- 

Department Order No. 2 

Deputation Order to Enforce Certain Provisions of RA 7394 

(Consumer Act of the Philippines) and RA 7581 (The Price Act) 

by DAís Consumer Oriented Agencies 

In the interest of public service and in line with the policy of the State to protect the 

interest of the consumers and promote his general welfare, and in order to arrive at speedy 

and immediate solutions and remedies to the effective enforcement of the Consumer Act of 

the Philippines (RA 7394) and the Price Act (RA 7581) and their respective implementing 

rules and regulations, the following heads of agencies are hereby deputized as duly authorized 

representatives of the Department of Agriculture to implement the provisions of the 

above cited consumer protection laws with respect to products falling within the jurisdiction of 

their concerned agencies: 

BUREAU OF ANIMAL INDUSTRY 

BUREAU OF PLANT INDUSTRY 

BUREAU OF FISHERIES AND AQUATIC RESOURCES 

FERTILIZER AND PESTICIDES AUTHORITY 

NATIONAL FOOD AUTHORITY 

NATIONAL MEAT AND INSPECTION COMMISSION 

PHILIPPINE COCONUT AUTHORITY 

PHILIPPINE FISHERIES DEVELOPMENT AUTHORITY 

SUGAR REGULATORY ADMINISTRATION 

For this purpose, the above are directed to monitor/check compliance with the requirements 

set forth by the above-cited laws and their IRR, including but not limited to product 

quality and safety, product labeling, advertising and promotion, price tag, reasonable pricing 

and consumer complaints. 

All complaints involving violations of the Consumer Act shall be mediated and/or arbitrated 

as the case may be, pursuant to Joint DTI-DOH-DA Administrative Order No. 1, dated

1318 


December 27, 1993, implementing Chapter III of RA 7394 Outside of the Consumer Act, 

complaints shall be addressed accordingly. 

All concerned are hereby further directed to make periodic written report of the extent 

of the enforcement of the order to the Office of the Assistant Secretary for Field Operations. 

This Order takes effect immediately. 



(SGD.) LUIS P. LORENZO, JR. 

Secretary 

--o0o-- 

Administrative Order No. 19, s. 2003 

Good Manufacturing Practice (GMP) Certification and Audit 

of Drug Manufacturing Plants for Animal Health Products 

WHEREAS, Section A of the Memorandum of Agreement (MOA) between the Bureau 

of Animal Industry (BAI) and the Bureau of Food and Drugs (BFAD) dated September 25, 

1991 states that BAI shall take charge of the licensing of the establishments which engage in 

the manufacture, distribution and sale of veterinary drugs or products; 

WHEREAS, the Department of Agriculture (DA) requires the accreditation of drug 

manufacturing plants for animal health products before being allowed to manufacture and 

sell their products in the Philippines; 

WHEREAS, this is consistent with the DA mandate to ensure the safety and quality of 

animal health products for livestock, poultry and pets and which promote public health as 

required by the Consumer Act of the Philippines; 

WHEREAS, GMP will ensure the manufacture of safe and quality animal health products; 

NOW, THEREFORE, I, Luis P. Lorenzo, Jr. Secretary of Agriculture, do hereby issue 

this Order: 

1. Requiring the certification and audit of all drug manufacturing plants for animal 

health products to comply with the internationally recognized standards in Current Good 

Manufacturing Practices (GMP) program under the Codex Alimentarius guidelines and 

Section 26a of RA 3720 in addition to those already provided for in relevant orders concerning 

the manufacture of animal health products in livestock, poultry and pets. 

2. An independent certification body accredited by BAI shall conduct the audit and 

issue the Certificate of GMP Compliance on a yearly basis with the manufacturing plant 

shouldering the cost of the audit at all times.


3. The Director of BAI shall formulate the guidelines for the effective implementation of 

this Order. 





Secretary 

--o0o-- 


Deputation Order to Enforce Republic Act No. 7581 (Price Act) 

Pursuant to Sec. 10 (14) of R.A. 7581, otherwise referred to as the Price Act, the 

Office of the Mayor of the Cities and Municipalities enumerated below and/or his duly authorized 

representative, in the interest of the service, and in order to effectively protect the 

public and apply swift and effective solution to the problem of overpriced basic necessities 

during periods of calamity, emergency, widespread illegal price manipulations and other 

similar situations, are hereby deputized as the implementing arm of the Department of Agriculture. 

This is to ensure that prices of basic necessities are automatically frozen at their 

prevailing levels, whenever the President, under Sec. 6 of the Price Act (R.A. 7581), declares 

their respective City or Municipality under a state of calamity, and upon the declaration 

of a mandated price control of basic necessities under Section 7 of the Price Act; and 

whenever there is prevalence of illegal acts of price manipulation, Section 5 of the Price Act 

is enforced. 

1. Kalookan City 10. Paranaque City 

2. Las Pinas City 11. Pasay City 

3. Makati City 12. Pasig City 

4. Malabon City 13. Municipality of Pateros 

5. Mandaluyong City 14. Quezon City 

6. Marikina City 15. Municipality of San Juan 

7. City of Manila 16. Municipality of Taguig 

8. Muntinlupa City 17. Valenzuela City 

9. Navotas City 

The following are the list of basic necessities covered by this Deputation Order: 

1. rice 

2. corn 

3. cooking oil 

4. fresh, dried fish and other marine products 

5. fresh pork, beef and poultry meat 

6. fresh eggs


7. fresh milk 

8. fresh vegetables 

9. root crops 

10. sugar 

Extent of Authority and Responsibility of the Deputized Officials 

1. The deputized officials may conduct investigations of any violation of this Act and, after 

due notice and hearing, impose administrative fines in such amount as he may deem 

reasonable which shall in no case be less than One Thousand Pesos (P1,000.00) nor more 

than One Million Pesos (P1,000,000.00). In the imposition of administrative fines, the following 

factors shall be taken into consideration: 

a. Whether the subject of the violation is a basic necessity or a prime commodity; 

violations involving basic necessities shall be deemed more serious; 

b. Whether the subject of the violation is under price control under Sections 6 

and 7 of this Act; violations involving basic necessities and prime commodities 

under price control shall be deemed more serious; 

c. The number of violations committed respondents who had previously been 

found to have violated any of the provisions of this Act shall be imposed a higher 

fine; and 

d. Such other considerations as may be deemed necessary to carry out the 

intents, purposes and provisions of this Act. 

2. The deputized official may require the attendance and testimony of witnesses of the 

production of goods, objects, books, papers, documents, contracts, records, financial statements, 

accounts, agreements and such other evidences material in the determination of any 

violation of this Act; 

3. Without prejudice to the power to issue temporary closure or temporary restraining order 

for a period which shall not be more than ten (10) days, he may, after due notice and 

hearing, issue cease and desist orders; reprimand; censure; suspend, revoke or cancel any 

permit, license, authority or registration issued by his office; or order the permanent closure 

of any establishment violating the provisions of this Act; 

4. The deputized official may initiate summary proceedings to cause the seizure by the 

Government of basic necessities and prime commodities subject of a violation of this Act and 

order their sale to the public at reasonable prices whenever the nature of or the demand for 

such good so requires: Provided, That, pending litigation, the proceeds of the sale shall be 

held in trust or escrow by the implementing agency: Provided, further, That, should the 

owner of the basic necessity or prime commodity seized and sold be found not liable for the 

violation which was the basis of the seizure, the proceeds from their sale shall be paid to 

him, otherwise, they shall accrue to the general fund of the Government and: Provided, 

finally, That, the head of the implementing agency shall cause the broadcast in radio or 

television and the publication in at least two (2) newspapers of general circulation of the fact 

of sale or disposition of such seized goods at least three (3) days before the date of sale or 

disposition;


This authority shall be published in two (2) newspapers of general circulation and shall 

take effect immediately after publication and shall remain effective until revoked. 




Secretary 

--o0o-- 

Memorandum Circular No. 12 

Annexes I, II, and III, Pursuant to Memorandum 

Circular No. 8 s. 2003 and DA AO No. 8, s. 2002 

Pursuant to DA Administrative Order No. 8, s. 2002 ìRules and Regulations on the 

Importation and Release Into the Environment of Plants and Plant Products Derived From the 

Use of Modern Biotechnologyî and DA Memorandum Circular No. 8, s. 2003 ìGuidelines for 

the Phytosanitary Inspection of Regulated Articles for Food, Feed and Processingî, I am 

authorizing the release of the following Annexes: 

Annex I: Approval Registry for the Importation of Regulated Articles for Direct Use 

for Food, Feed or Processing 

Annex I is the initial list of approved GM plant products in the country, and which shall 

form part of the ìApproval Registry for Direct Use for Food, Feed or Processingî (the Annex 

I List). It is based on the technical recommendations of the DA regulatory agencies led by 

the Bureau of Plant Industry (BPI) and the Scientific and Technical Review Panel (STRP). 

All plant products in the Annex I List have undergone the approval process required by 

AO 8, including a satisfactory risk assessment conducted by DA regulatory agencies and 

the STRP. The plant products in the Annex I List will be allowed entry if accompanied by the 

usual BPI/BAI import permit and/or phytosanitary permit. Pursuant to Section 12 H of AO 8, 

a notification shall be submitted to the BPI within 15 days from arrival of the shipment. 

Pursuant to Section II of MC 8, a Declaration of GMO content will be submitted to the Bureau 

of Plant Industry, upon arrival of the shipment. 

Annex II. Approval Registry of Regulated Articles for Propagation, For Which its 

Plant Products Have Been Approved for Direct Use as Food, Feed, And/Or Processing 

Annex II is the list of plants which have been approved for local propagation in accordance 

with AO 8 and have undergone the phase-by-phase, step-by-step risk assessment: 

from contained use under the supervision of the National Committee on Biosafety of the 

Philippines (NCBP); to field tests under the supervision of NCBP or DA, as the case may be; 

and propagation under the DA. 

These plant products have undergone satisfactory food, feed and environmental safety 

assessment mandated under AO 8 when they were evaluated for propagation.

1322 


Plant products listed in the Annex II shall be entered by the Bureau of Plant Industry 

into ANNEX I List as they are likewise approved for direct use as food, feed and or processing. 

Annex III. List of Regulated Articles for Importation For Direct Use Requiring a Declaration 

of GMO Content 

The Bureau of Plant Industry shall also maintain a list of regulated articles for direct use 

consisting of all commercialized GM plant products (the ìAnnex III Listî). 

All plant products in Annex III List are those that: (1) have a genetically engineered 

counterpart, which has been commercialized or released into the market; (2) are in primary/ 

natural state or semi-processed form; and (3) required an import permit and/or phytosanitary 

certificate. 

All plant products in the Annex III List shall be required to be accompanied by a 

Declaration of GMO Content which shall be submitted to the Plant Quarantine Service of the 

Bureau of Plant Industry, upon the arrival of such shipment. Those with a Declaration of non- 

GMO content will be allowed entry. For those with a positive GMO declaration, they must also 

be in Annex I List before they are allowed entry. 

All the above-mentioned registries (i.e., Annex I List, Annex II List and Annex III List) 

shall be updated, as necessary, by the Bureau of Plant Industry. 





Secretary 

--o0o-- 

Memorandum Order No. 27 

Lifting the Temporary Ban on the Importation of Meat 

and Meat Products Derived from Cattle from Canada 




--o0o--



Expansion of MO 18, Series of 1999 to Include/Cover the Inspection on Pork 

and Pork Product for Export from Mainland South Korea to the Philippines 


Date Filed: 03 Sept. 2003 




--o0o-- 


Amendment to Administrative Order No. 50, s. 2000 



DEPARTMENT OF BUDGET AND MANAGEMENT 


Department of Budget and Management and 

Commission on Higher Education Joint Circular No. 1, s. 2003 

SUC Leveling Instrument and Guidelines 

for the Implementation Thereof 

1.0 This Circular is issued to revise the SUC leveling criteria contained in National Compensation 

Circular (NCC) No. 56, dated September 30, 1989, implementing RA 6758, the Compensation 

and Position Classification Act of 1989. Said NCC 56 provides for four levels of 

SUCs which shall be the basis of the classification of SUC President and Vice-President 

positions. 

2.0 The new SUC Leveling Instrument, jointly formulated by the CHED, DBM and the Philippine 

Association of State Universities and Colleges (PASUC), attached herewith as Annex 

A* shall be the basis for determining the classification and salary grade of the SUC President 

and the allowable number of Vice Presidents to be designated. 



1324 


3.0 To implement the said Instrument, all SUCs shall submit to the CHED Regional Office 

concerned all pertinent documents for evaluation. The initial evaluation shall be done jointly 

by the regional offices of CHED and DBM. The results shall be forwarded for final approval 

by the National Evaluation Committee (NEC) co-chaired by CHED and DBM. The NEC shall 

be composed of three (3) other members, one from DBM, one from CHED, and the PASUC 

Executive Director. Such evaluation shall be undertaken once every three (3) years starting 

2003. 

4.0 The existing classification and salary grade of the SUC President in a SUC whose 

institutional level as evaluated under the Instrument is higher than its present level shall be 

adjusted accordingly. 

5.0 On the other hand, the classification and salary grade of a SUC President in a SUC 

whose institutional level as evaluated under the Instrument, is lower than its present level shall 

be maintained. However, once vacated, the classification and salary grade of said position 

must conform to the SUC level as evaluated. 

6.0 No new plantilla position of Vice-President shall be created. Instead, designations may 

be made in accordance with the classification of the SUCs as evaluated under this Instrument. 

7.0 All existing plantilla positions of Vice-President may be maintained and shall be considered 

coterminus with the incumbent. Such position shall be abolished once vacated. 

8.0 The number of Vice-Presidents, both designated and appointed, shall not exceed the 

number prescribed for its level as evaluated under the Instrument. 

9.0 No incumbent shall suffer a reduction in salary, allowances and benefits as a consequence 

of the implementation of the SUC Leveling Instrument. 

10.0 No release shall be made for the initial implementation of this Circular. It is understood 

that any amount needed shall be sourced from available savings or income of the SUC 

concerned. 

11.0 This Circular shall take effect immediately. 


(SGD.) EMILIA T. BONCODIN (SGD.) ESTER A. GARCIA 

Secretary Chairperson 

Department of Budget and Management Commission on Higher Education 


--o0o-- 

National Budget Circular No. 488-A 

Clarification on the Procedures Relative to 

Fund Transfers to Operating Units


1.0 Pursuant to National Budget Circular (NBC) No. 488, the transfer of fund (allotment and 

cash support) covering Centrally Managed Items (CMIs/lump-sum amounts under agency 

budgets shall be done by the department/agency concerned thru the following: 

1.1. Transfer of allotment thru Sub-Allotment Advice to the Operating Units (OUs); 

and 

1.2 Covering cash support shall be through: 

1.2.1 Additional Notice of Cash Allocation (NCA) to be issued by DBM directly 

to the recipient OUs; or 

1.2.2 Notice of Transfer of Allocation (NTA), whereby the department/agency 

shall instruct their MDS-GSB to transfer a specific amount out of their NCA available 

book balance, to the MDS accounts of the OUs. 

2.0 Operating Units or OUs shall refer to agencies receiving NCA directly from the DBM. 

This is consistent with the definition provided under item 5.1.1 of NBC No. 487 (i.e., FY 2003 

Fund Release System) and prior yearsí issuances on fund release. 

3.0 The procedures prescribed under NBC No. 488 shall not be applicable to the following: 

3.1 Cash transfer without corresponding allotment such as trust receipts under 

Executive Order No. 388 and cash deposit for funding of continuous form checks 

covering salaries, other benefits, among others; and 

3.2 Loan proceeds under Working Fund for foreign-assisted projects. 

4.0 Cases not covered by the provisions of this Circular and NBC No. 488 shall be referred 

to the DBM for resolution. 



(SGD.) EMILIA T. BONCODIN 

Secretary 

--o0o-- 

Local Budget Memorandum No. 2003-42 

Initial FY 2004 Internal Revenue Allotment (IRA) 

and other Related Budget Preparation Matters 

1.0 

Purpose


This Memorandum is issued to: 

1.1 Notify local government units (LGUs) of the initial FY 2004 Internal Revenue Allotment 

(IRA) allocation to be used in the preparation of the FY 2004 local budgets; and 

1.2 Remind LGUs of the prescribed forms, procedures and schedules in the preparation of 

the FY 2004 local budgets and adopt the expenditure and income accounts under the New 

Government Accounting System (NGAS). 

2.0 


2.1 For purposes of preparing the FY 2004 budget of local governments, the final IRA for FY 

2003 in the amount of P141.00 Billion will be used as the initial IRA level for FY 2004. 

2.2 Additional IRA for FY 2004 in compliance with Section 284 of Republic Act (R.A.) No. 

7160, the Local Government Code of 1991, will be ascertained after December 31, 2003 

upon the enactment and approval of the General Appropriations Act (GAA) for FY 2004. This 

will consider changes in allocation due to conversion/creation of new LGUs as of December 

15, 2003, if any. The utilization of such additional IRA will be subject to the enactment of a 

supplemental appropriation ordinance by the local sanggunian. 

3.0 

Distribution of the Initial IRA 

3.1 The distribution of the initial P141.00 Billion IRA among the levels of the local government 

is as follows: 

Level of LGUs Share Equivalent to 1992 Share Determined on Total IRA 

Cost of Devolved the basis of Section 285 Shares 

Functions/City-Funded of R.A. No. 7160 

Hospitals, as of 31 December 

1992 

Provinces P2.848 P30.941 P33.789 

Cities .906 30.941 31.847 

Municipalities 2.720 45.739 48.459 

Barangays .000 26.905 26.905 

Total P6.474 P134.526 P141.000 

3.2 The P6.474 Billion Guaranteed Share Equivalent to the Actual Cost of Devolved National 

Functions/City-Funded Hospitals as of December 1992 is net of P10.239 Million representing 

the cost of devolved functions of the Puerto Princesa Provincial Hospital. Said hospital 

was renationalized by virtue of R.A. No. 8549 dated February 28, 1998 and the Memorandum 

of Agreement and Implementing Rules and Regulations covering the renationalization 

was signed by Secretary Manuel M. Dayrit of the Department of Health and Governor Joel T. 

Reyes of the Province of Palawan on February 18, 2003. 

3.3. The detailed distribution is shown in Annex A*. 




4.0 

Use of the IRA 

4.1 As mandated under Section 17 (g) of the Code, the IRA and other local resources shall 

first cover the cost of providing basic services and facilities, particularly those that have been 

devolved by the National Government, before applying the same for other purposes. 

4.2 In addition, LGUs are reminded that full provision must first be made for Magna Carta 

benefits under R.A. No. 7305 in their respective local budgets, before they can provide for 

non-mandatory PS items such as adoption of the salary schedule for higher class LGUs. 

LGUs shall also provide for commitments, covered by duly approved contracts. 

5.0 

Special Shares 

5.1 In addition to the IRA, some LGUs are entitled to the following revenue shares: 

- Share in the proceeds from the utilization and development of national wealth 

within their territorial jurisdiction pursuant to Article 409 of the Implementing Rules 

and Regulations of R.A. No. 7160; 

- Excise tax on Virginia Tobacco pursuant to R.A. No. 7171; 

- Gross income taxes paid by all businesses and enterprise within the ECOZONES 

pursuant to R.A. No. 7227; 

- Value Added tax pursuant to R.A. No. 7643; and 

- Franchise Tax pursuant to R.A. Nos. 7953 and 8407. 

5.2 LGUs are advised to coordinate with the appropriate revenue collecting agencies 

and government corporations to determine the amount that will be incorporated 

in their FY 2004 Annual Budgets. 

6.0 

Preparation of Local Budgets 

6.1 The FY 2004 Annual Budgets of LGUs shall be prepared in accordance with the forms, 

procedures and schedules prescribed under the Budget Operations Manual for LGUs issued 

under DBM-COA Joint Circular No. 93-2 dated June 8, 1993 pursuant to Section 354 of the 

Code. The expenditure and income accounts to be use shall be consistent with the NGAs. 

6.2 To the extent possible, the budget proposal shall incorporate indicative budget levels for 

FYs 2005 and 2006, consistent with a medium-term budget framework. 

6.3 To supplement the information provided in the prescribed forms, local chief executives 

shall include the following features in budget preparation directives or ìbudget callsî to their 

respective departments and offices: 

6.3.1 the physical accomplishments of LGUs taking into account clear and measurable 

performance indicators for each of their programs to ensure that these 

contribute to their established medium-term and long-range goals;


6.3.2 the income sources that will finance the proposal with emphasis on new 

and/or locally initiated revenue or income-generating measures; 

6.3.3 the allocation of the proposed FY 2004 Annual Budget, including various 

levels of disaggregation, as follows: 

6.3.3.1 by sector; 

6.3.3.2 by object class of expenditure (PS, MOOE and CO); 

6.3.3.3 by department/office; 

6.3.3.4 in terms of mandatory expenditures vis-a-vis expenditure for 

investment and/or expansion of existing service delivery; 

6.3.3.5 budget per capita. 

6.3.4 the staffing and compensation profile of the LGU. 

6.4 Appropriations for ìPrior Yearís Obligationsî which are to be included in the FY 2004 

Annual Budgets shall be in accordance with the NGAs. 

6.5 Pursuant to R.A. No. 7192, LGUs shall mainstream Gender and Development (GAD) in 

their respective programs, activities and projects. LGUs are ordered to provide at least 5% 

out of their CY 2004 budget to support GAD. 

6.6 The FY 2004 budget shall likewise consider facilities that will enhance the mobility, safety 

and welfare of differently abled persons, pursuant to R.A. No. 7227 and Batas Pambansa 

Blg. 344. 

6.7 The general limitations under Section 325 of the Code particularly paragraph (a) shall 

be strictly adhered to. In particular Local Budget Circular No. 75 dated July 12, 2002, 

pertaining to the determination of items falling under the 45% - 55% Personal Services (PS) 

limitations shall be strictly observed. 

7.0 

Submission of Budget Summaries 

7.1 Special, highly-urbanized and independent component cities, provinces as well as municipalities 

in Metro Manila shall submit to the Department of Budget and Management (DBM), 

through the DBM Regional Offices concerned, a comparative statement of income and expenditures 

for FY 2002 (actual), FY 2003 (current program) and FY 2004 (proposed program) 

using the form indicated as Annex B* of this Memorandum. The budget summary that 

will be submitted by the province shall contain the consolidated budgets of cities and municipalities 

within its geographical coverage. In the same manner, the budget summary that will 

be submitted by the cities and municipalities to their respective province shall contain the 

consolidated budgets of the barangays within their geographical coverage. 

8.0 Provision of Technical Assistance 

Technical assistance in the preparation of the FY 2004 Annual Budget may be requested 

from the DBM Regional Offices concerned. 


Quezon City.


9.0 

The cooperation of all concerned is earnestly requested. 




Secretary 

--o0o-- 

Joint Circular No. 1 - DBM/NEDA/NYC 

Joint Circular on Monitoring of Youth Programs and Projects Implemented 

by Government Agencies Based on Section 28 of the General Provision, 

of the General Appropriations Act, Fy 2003 (Republic Act No. 9206) 

1.0 

Objectives 

1.1. To come up with a monitoring scheme for skills training and employment for the out-ofschool 

youth (OSY), as well as summer jobs for students for a period not exceeding two 

months; 

1.2 To come up with a common reference to all agencies concerned for the implementation 

of Section 28 of the General Provision, of the General Appropriations Act, FY 2003 (e.g., 

stipend, age qualification, etc.); 

1.3 To provide reportorial requirements necessary for the monitoring of the agencyís youth 

development plan and budget; and 

1.4 To provide relevant data for youth policy formulation. 

2.0 

Policy Guidelines 

2.1 Pursuant to the approval of Executive Order No. 484 also known as Medium-Term Youth 

Development Plan (MTYDP): 1999-2004, agencies are mandated to institutionalize youth 

development programs, activities, and projects in their annual planning, programming, and 

budgeting processes, implementation, and monitoring and evaluation; and 

2.2 All government agencies are encouraged to observe the implementation of Section 28 of 

the General Provision, of the General Appropriations Act (GAA), which is anchored on the 

1987 Philippine Constitution or on the youth programs, projects and activities which are 

specifically mentioned in the MTYDP and the Youth Doors.


3.0 


For purposes of this Joint Circular, the following terms shall guide the agencies in the 

submission of their accomplishment report: 

3.1 Skills Training- refers to technology training in the field of Land Tranportation, Hotel and 

Restaurant Management, Electrical, Electronics and Communications, Refrigeration and Air- 

Conditioning, Machinery and Technology, Welding and Construction; 

3.2 Out-of School Youth (OSY) - refers to youth not enrolled in any formal or vocational 

school, not employed or self-employed, and are not college or technical/vocational school 

graduates, ages 15-30 years old; 

3.3 Employment - refers to profitable work done by the students and out-of-school youths not 

exceeding two months in government agencies; 

3.4 Summer Job - refers to employment given by government agencies to students and outof-school 

youths from April to May of every year; 

3.5 Stipend - refers to the periodic allowance given to students and out-of-school youths 

employed by government agencies from April to May of every year and the stipend/or 

allowance is equivalent to 75% of the present minimum hiring rate per month of the agency 

concernd; 

3.6 Student - refers to youth enrolled in tertiary schools and vocational school aged 18 to 21 

years old; 

3.7 Government Internship Program (GIP) - refers to youth participation in public service by 

involving them in programs and projects implemented by government agencies and departments; 

3.8 Medium Term Youth Development Plan - a development plan containing gains and challenges 

regarding the youth sector. It also contains strategies or action points in addressing 

youth issues and concerns; 

3.9 Youth Doors - refers to a compendium of initiatives of the National Government in respond 

to the needs of Filipino Youth; 

3.10 Indicative Budget Ceiling - refers to the budget ceiling of each department or other 

Executive Office (OEO) which corresponds to their specific appropriation levels, net of their 

built-in appropriation for terminal leave benefits. This level may, however, be adjusted based 

on demonstrated absorptive capacity in relation to the agency Major Final Outputs (MFOs). 

This budget level may also be adjusted on the basis of sectoral priorities as finally determined 

by the President and the Cabinet; and 

3.11 Philippine Medium Term Youth Development Plan (PMTYDP) refers to the Philippine 

governmentís directional framework to pursue full equality and development for youth sector, 

in compliance with the Youth in Nation Building Act (Republic Act 8044) and the 1987 constitutional 

provision of Art. 2, Section 13.


4.0 


4.1 The National Youth Commission (NYC) shall provide the appropriate monitoring scheme 

form (See Attached Form, Annex A*) to the concerned agencies. They shall furnish a consolidated 

accomplishment report for the first semester every November 30 of the current 

year and the end report on or before March 31 of the succeeding year and thereafter, to the 

National Economic and Development Authority (NEDA) and the Department of Budget and 

Management (DBM) for monitoring and evaluating the youth programs and projects being 

implemented by concerned agencies and departments; 

4.2 Government Owned and Controlled Corporations (GOCCs) and the Local Government 

Units (LGUs) are likewise encouraged to implement Section 28 of the General Appropriations 

Act; 

4.3 All Heads of youth-serving agencies shall give priority in their indicative Budget Ceiling 

the implementation of Section 28 of the General Appropriations Act. These agencies are 

hereby encouraged to include in their succeeding budget proposal, programs in response to 

the needs/issues of the youth as identified by the National Youth Commission (NYC). These 

are in the areas of, but not limited to, Education; Employment; Values; Participation; Health; 

Special Needs and Environment; and other agencies are likewise enjoined to implement 

youth-oriented programs in coordination with NYC, such as the Government Internship Program 

(GIP), among others. 

4.4.The National Economic and Development Authority (NEDA) shall ensure that youth concerns 

are incorporated in the Medium Term Philippine Development Plan; (MTPDP) and the 

priority youth sector programs, activities and projects (PAPs) to be certified by the NYC are 

included in the Medium-Term Public Investment Program (MTPIP). 

5.0 

Procedural Guidelines 

5.1 Agencies covered by this Circular, including their regional offices, shall submit their 

accomplishment report using Annex A form to NYC, not later than every 31st of October of 

the current year their 1st semester Accomplishment Report. The end Report shall be submitted 

on or before 28th of February of the following year; and 

5.2 The National Youth Commission shall submit an annual Accomplishment Report using 

ANNEX A* to Congress, copy furnish, the Department of Budget and Management (DBM) 

and the National Economic Development Authority (NEDA). The DBM shall use these reports 

in the review and evaluation of the agency budget proposals. 

6.0 

Resolution Clause 

6.1 Cases not covered by this Circular shall be referred to DBM, NEDA and/or NYC for 

resolution. 




7.0 

Effectivity 





Secretary 

Department of Budget and Management 

(SGD.) ROMULO L. NERI 

Director General 

National Economic Development Authority 

(SGD.) PAOLO BENIGNO A. AQUINO IV 

Chairman and Chief Executive Officer 

National Youth Commission 

--o0o-- 

Joint DBM-CHED Circular No. 2 

Allowable Number of Vice President Positions in SUCs 

1.0 This Circular is issued to prescribe the allowable number of Vice Presidents(VP) in a 

SUC falling under any of the four (4) institutional levels, as established under National 

Compensation Circular (NCC) No. 56, dated September 30, 1989, Implementing Republic 

Act (RA) No. 6758 otherwise known as the Compensation and Position Classification Act of 

1989, and based on the criteria as prescribed in Joint DBM-CHED Circular No. 1, s. 2003 

dated May 29, 2003. 

2.0 The existing levels of VP positions as provided in the Index of Occupational Services, 

Position Titles and Salary Grades are as follows: 

SUC Level Position Title and Salary Grade 

4 SUC Vice-President IV, SG 28 

3 SUC Vice-President III, SG 27 

2 SUC Vice-President II, SG 26 

1 SUC Vice-President I, SG 25 

3.0 Section 6 of RA 8292 allows more than one (1) VP per SUC. For this purpose, designations 

shall be made instead of creating regular VP positions and issuing permanent appointments 

thereto. This will extend the opportunity for undertaking executive responsibilities to 

those who are qualified and inclined for such work and give the Board the flexibility for 

developing promising SUC personnel for higher responsibilities.


4.0 The Governing Board for each SUC, upon recommendation of the SUC President may 

designate VPs in lieu of creation/appointment, the number of which shall depend on the SUC 

level, as follows: 

SUC Level No. of VPs 

4 3 

3 2 

2 2 

1 1 

The designated VP for Administrative Affairs may not necessarily be a member of the 

faculty. 

5.0 The SUC President has the authority/flexibility to choose the area of responsibility that 

will be handled by each VP. 

6.0 Faculty members who are designated VPs shall be entitled to the difference between 

their present salaries and the 1st step of the salary grade of a permanent VP position as 

shown in Section 2 hereof. 

7.0 Designated VPs shall also be entitled to representation and transportation allowances 

(RATA) at the rates indicated in the General Appropriations Act for officials who are considered 

to be of equivalent rank as follows: 

SUC Level Official of Equivalent Rank 

4 Bureau Director 

3 Assistant Bureau Director 

2 Bureau Regional Director 

1 Assistant Bureau Regional Director 

8.0 A designated VP who is already receiving a salary higher than the 1st step of a permanent 

position of VP, shall only be entitled to the corresponding RATA for the position. In no 

case shall the designeeís basic salary plus the salary difference exceed the hiring rate 

prescribed for a permanently appointed VP for the particular SUC level. 

9.0 SUCs that already have filled permanent VP positions may still designate additional VPs 

up to the prescribed number only as specified herein, inclusive of the former. Vacant VP 

positions shall be immediately abolished. Those with incumbents shall be abolished once 

vacated. 

10.0 SUCs may designate additional VPs in excess of the allowable number as may be 

warranted in conformance with Section 6 of RA 8292, subject to the approval of the respective 

Governing Boards provided that funding shall not be sourced from their appropriations. 



Secretary 

Department of Budget and Management


(SGD.) BRO. ROLANDO R. DIZON 

Chairperson 

Commission on Higher Education 

DEPARTMENT OF EDUCATION 


DepED Order No. 33, s. 2003 

Youth Smoking Prevention (YSP) Program 

1. In line with the Republic Act 8749 known as Philippine Clean Air Act of 1999, the Department 

of Education (DepEd) prohibits smoking and the sale of cigarettes and other tobacco 

products inside public and private school campuses, buildings, offices, including the premises 

and buildings of the division, regional and national offices. Said campuses, premises, 

buildings and offices shall be declared as ìNo Smoking Areasî or ìZones of Healthî. 

2. Hence, the DepEd through the Center for Students and Co-Curricular Affairs (CSCA) and 

the School Health and Nutrition Center (SHNC) spearheads the Youth Smoking Prevention 

(YSP) Program. All public and private schools, division and regional offices shall implement 

this program. 

3. Topic on Smoking Prevention shall be integrated in Health Education and be part of the 

Student Council agenda or other school-related activities. 

4. Enclosed are the background/rationale, legal bases, projects, activities and directives, 

responsibilities and sanctions of the program. 

5. For further information and coordination regarding the Youth Smoking Prevention (YSP) 

Program, please get in touch with the CSCA c/o Mr. Joey G. Pelaez, CSCA Executive 

Director, G/F Mabini Bldg., DepEd Complex, Meralco Avenue, Pasig City or through Telefax 

nos. 631-8495 or 636-3603 or the SHNC at telephone no. 633-7245. 

6. Immediate dissemination of and compliance with this Order is directed. 

Adopted: 29 April 2003 

1.0 Background/Rationale 

(SGD.) EDILBERTO C. DE JESUS 

Secretary 

YOUTH SMOKING PREVENTION (YSP) PROGRAM 

The Framework Convention on Tobacco Control, the worldís first international treaty on 

health, was concluded by nearly 170 countries in a global bid to quit a habit that kills almost


five million people a year. The pact seeks to tackle the devastating consequences of tobacco 

use and exposure to smoke with measures ranging from a halt to advertising to a ban on 

cigarette sales to minors. 

The treaty, of which the Philippines is a signatory and which will come into force once 

forty (40) signatory countries have formally ratified it, declared that the spread of the tobacco 

epidemic is a global problem with serious consequences for public health that calls for 

an effective, appropriate and comprehensive international response. 

In the home front, youth smoking proves to be very alarming in the wake of revealing 

current statistics on the extent of youth below eighteen (18) years old who actually smoke or 

whose health have been precariously endangered by exposure to tobacco smoke. More 

often, for young people, cigarette smoking is a precursor to drug abuse and other vices. 

2.0 Legal bases 

The 1987 Constitution mandates the State to protect and promote the right to health of 

the people and instill health consciousness among them. The State recognizes the vital role 

of the youth in nation-building and shall promote and protect their physical, moral, spiritual, 

intellectual and social well-being. 

Republic Act No. 8749, otherwise known as the Philippine Clean Air Act of 1999, 

prohibits smoking inside public buildings or enclosed public places. 

3.0 Declaration of Policy 

Pursuant thereto and especially where schoolchildren and youth are immediately and 

dangerously affected and disadvantaged, it is the policy of the Department of Education to 

prohibit smoking inside public and private school campuses, buildings, offices, including the 

premises and buildings of division, regional and national offices. Said campuses, premises, 

buildings, and offices are declared as NO SMOKING AREAS or ZONES OF HEALTH. 

4.0 Projects, Activities and Directives 

In connection, the following initiative and directives must be taken into consideration: 

4.1 All schools and offices are directed to implement projects and activities to increase 

awareness of the YSP program campaign and strengthen projects and initiatives in maintaining 

smoke-free campuses, premises, buildings and offices. 

4.2 All schools, buildings and offices are required to post big ëNO SMOKINGí notices or other 

campaigns in at least five (5) conspicuous places. 

4.3 All schools, buildings and offices shall post a copy of this Order in bulletin boards and 

information counters. 

4.4 All schools are enjoined to establish YSP clubs or other organizations similar thereto, 

conduct and/or attend symposia, workshop and training relevant thereto.


4.5 YSP projects, activities and campaigns shall be made an integral part of the program and 

projects of the Student Government Organization. 

4.6 Cigarette smoking and tobacco use shall be a ground for disqualification for student 

membership in any school clubs or organizations. 

5.0 Responsibilities and Sanctions 

5.1 Monitoring of compliance with the policy on non-smoking and non-sale of cigarettes and 

other tobacco products, reporting violations of the same, and providing sanctions shall be the 

main responsibility of the school or office head. 

5.2 School Teachers and Department Heads, and Education Supervisors in Health shall 

assist the school or office heads, respectively, in monitoring and reporting violations. They 

are also designated as coordinators of the DepEd in the implementation of projects and 

activities relative to the Youth Smoking Prevention (YSP) program. 

5.3 At the central office, the Administrative Service shall have the duty of monitoring compliance 

and reporting violations of the policy on non-smoking and non-sale of cigarettes and 

other tobacco products, including the posting of appropriate notices within the compound. 

5.4 DepEd personnel and students found violating this Order shall be subject to proper 

administrative and disciplinary sanctions. 




--o0o-- 

DepEd Order No. 34, s. 2003 

Anti-Sars Campaign in Schools* 



--o0o-- 


Implementation of the Citizenship Advancement Training (CAT) 

at the Fourth Year High School Level* 


U.P. Law Complex, Diliman, Quezon City)






--o0o-- 


Revised Implementing Guidelines of the 2002 Secondary 

Education Curriculum Effective School Year 2003-2004 



--o0o-- 


Regulating the Collection of Voluntary Contributions from 

Students of Public Elementary and Secondary Schools 

1. Pursuant to the Constitutional mandate for free public basic education as well as existing 

laws, students in public elementary and secondary schools shall be enrolled without having to 

pay any amount as a requirement for enrollment. 

2. Contributions for the following organizations and fund raising activities may be collected at 

any time including the enrollment period provided that a student has already enrolled and that 

these are solicited on a voluntary basis. Moreover, the payment of such contributions shall 

not be made a requirement for admission or for the release of report cards and test results 

or for clearance purposes in case of transfer of students to other schools: 

a. Boy Scouts of the Philippines 

b. Girl Scouts of the Philippines 

c. Philippine National Red Cross 

d. Anti-TB Educational Fund Drive 

3. Collection of the PTA/PTCA fees is also allowed during the enrollment period subject to the 

conditions stipulated in DepEd Order No. 23, s. 2003 on Revised Guidelines Concerning 

PTAs/PTCAs at the School Level and the conditions in Paragraph 2 of this Order. 

The PTCA may also initiate the collection of the identification card fee if the school 

authorities in consultation with the PTCA decide to provide identification cards for the students. 

It is suggested that the fee shall be set by the individual elementary and secondary 

school but shall not exceed P20.00 per student. 

Similarly, for schools that publish school papers, collection of the school publication 

fee, which shall be set by the individual elementary and secondary school but which shall not


exceed P50.00 per elementary school student, and P75.00 per secondary school student, 

may also be undertaken by the PTCA. The collection shall be deposited in an authorized 

depository bank as trust fund for the school publication. It must be emphasized that the 

school publication fee is voluntary contribution. 

4. Regional directors, schools superintendents, school principals, school heads and teachers 

are directed to strictly implement this Order. Monitoring by the regional directors and 

schools superintendents of all schools in their areas is required to check the implementation 

of this Order. Any violation shall be dealt with administratively, including any case of collections 

other than those authorized in Paragraphs 2, and 3 which are made as a requirement 

for enrollment. 

5. For immediate dissemination and compliance. 




Secretary 

--o0o-- 


Implementing Guidelines for Educational Service Contracting 

(ESC) and Tuition Fee Supplement (TFS) for SY 2003-2004 

1. For the guidance of all concerned, the attached implementing guidelines of the Educational 

Service Contracting (ESC) and Tuition Fee Supplement (TFS) shall take effect in SY 

2003-2004. 

2. The Fund for Assistance to Private Education (FAPE) shall continue to function as service 

provider for the implementation of the ESC-TFS Programs for School Year 2003-2004. 

3. All previous DepEd rules, regulations and other issuances or parts thereof, which are 

inconsistent with this Order are hereby repealed or modified accordingly. 

4. Immediate dissemination of this Order is desired. 




Secretary 

--o0o--



Values Education in the Basic Education Curriculum 

1. To ensure effective implementation of Values Education which is one of the emphasis of 

the restructured Basic Education Curriculum, values education teachers should be utilized 

fully to help the other subject area teachers integrate values development in the subject area 

they teach. 

2. This Order is being issued for the following reasons: 

a. to effectively reinforce the role of every teacher as a values education teacher 

thus strenthening the Departmentís collective efforts in developing desirable values 

among the students; 

b. to be able to meaningfully integrate values development in the lesson of every 

teacher in each discipline; 

c. to be able to assist teachers in the valuing processes while at the same time 

developing the competencies in the subject area they teach; 

d. to ensure that values education is purposefully planned as regular lessons in 

the subject and not taken as incidental lessons in the process; 

e. to ensure that trained values education teachers or those who majored in 

values education are duly recognized to perform functions relevant to their expertise 

and competence; and 

f. to properly evaluate the result of interventions conducted both inside and outside 

the classroom. 

3. The following provisions should be observed: 

a. Values education teachers should provide assistance to the subject area teachers 

in integrating values development in their lessons. This does not mean forcing 

values integration if it is not relevant to the lesson. 

b. Values education teachers should conduct training or lesson demonstrations if 

necessary. 

c. The value focus may sometimes arise out of the teacherís observation of the 

daily behavior of students in their class which may not necessarily be related to 

the lesson on hand. The subject area teacher should address this. 

d. The revised Values Education Framework is still the basic material source for 

the core values that need to be developed. This will be made available in the 

division offices by June this year. The approved textbooks in the secondary level 

can still be used as references.


e. The Values Education Department at the secondary level belongs to the 

MAKABAYAN learning area and should sit in the collaborative planning of the 

teachers in this group. 

f. As any other area teacher, proportionate teacher loading should be taken into 

consideration. 

4. For immediate dissemination and compliance. 



(SGD.) EDLIBERTO C. DE JESUS 

Secretary 

--o0o-- 


Ascertaining the Authenticity of School Records 

1. The proliferation of spurious school records (fake transcript of records and diplomas) that 

usually originate from the so-called ìRecto Universityî has been pointed out by some 

educational institutions. 

2. There is therefore a need to check this malpractice in order to protect the integrity of such 

credentials. 

3. In view hereof, all DepEd officials, particularly school heads and personnel who handle 

school records are hereby directed to be more vigilant in ascertaining the authenticity of the 

school records and licenses being presented to them by individuals who are seeking employment 

here and abroad. 

4. Those actually found to be using fake credentials for appointment/promotion should be 

dealt with accordingly. 

5. Immediate dissemination of and strict compliance with this Order is directed. 



(SGD.) RAMON C. BACANI 



--o0o--



Hiring of Teacher Eligibles Who Failed To Register Under R.A. 7836 

1. For the information and guidance of all concerned, enclosed is a copy of Civil Service 

Commission Resolution No. 0121180 dated September 13, 2002 regarding the hiring of 

teacher eligibles who failed to register under R.A. No. 7836. 

2. Immediate dissemination of this Order is directed. 


(SGD.) RAMON C. BACANI 



CSC Resolution No. 021180 

Undersecretary Ramon C. Bacani of the Department of Education (DepEd) is requesting 

the Commission to allow teacher applicants who hold civil service eligibilities issued by 

the Civil Service Commission (Teacher Eligibility) and the then Department of Education, 

Culture and Sports jointly with the Civil Service Commission (PBET) to teach even if they 

failed to register without need of examination with the Professional Regulation Commission 

(PRC) within the period prescribed under RA 7836. 

In his letter-request dated July 17, 2002, Undersecretary Bacani represents as follows: 

ìIt is the position of this Department that these teachers, by virtue of their eligibilities 

have a vested right to practice teaching profession, which cannot be impaired 

by their non-registration with PRC pursuant to RA 7836. If non-passers in 

the LET are allowed to teach as para-teachers, then those who passed the PBET 

but failed to register should also be allowed to teach x x xî 

The issue in the instant case, is that there are teacher applicants who are eligibles 

(PBET and Teacher Examination passers) but failed to register within the prescribed period, 

that is, September 20, 2000. As a result, they can not practice the teaching profession 

unless they are issued certificate of registration and valid license from the PRC pursuant to 

Section 27 of RA 7836, which specifically provides that, ìno person shall practice or offer 

to practice the teaching profession in the Philippines without having previously obtained a 

valid certificate of registration and a valid professional license from the Professional Regulation 

Commissionî 

Under CSC Resolution 974571 dated December 9, 1997, ìprovisional appointments of 

incumbent teachers who are not qualified to register without examination or who, albeit 

qualified, failed to register, shall be allowed to continue in the teaching service upon submission 

of temporary or special permits issued by the BPT. They shall be under provisional 

status until September 20, 2000.î

1342 


Said Resolution likewise provides that ìappointment of para-teachers who have submitted 

special or temporary permits issued by the BPT may be approved as provisional.î 

Section 3 (k), Article 1 of the Rules and Regulations Implementing the ìPhilippine Teachers 

Professionalization Act of 1994î defines Para-Teachers as ìone who did not pass the 

Licensure Examination for Teachers (LET) but is issued by the Board a special or temporary 

permit to teach and who may be assigned by DECS to schools as it may determineî. 

Based on the abovecited rules, teachers who have no valid certification of registration 

and valid professional license may be appointed under provisional status. 

RA 7836 otherwise known as the Philippine Teachers Professionalization Act of 1994 

allows Para-Teachers (those who did not pass the LET but is issued by the Board a special 

or temporary permit) to teach. Therefore, teachers who passed the PBET/Teacher Examination 

and granted eligibility but failed to register may likewise be allowed to teach. 

WHEREFORE, considering that teacher positions are under the dearth category, the 

Commission resolves as it is hereby resolved to grant the request of Undersecretary Bacani 

to allow the appointment under provisional status of teachers who are holders of PBET or 

Teacher eligibility but failed to register within the prescribed period, provided, that they shall 

be replaced anytime as soon as there are qualified applicants who were issued certificate of 

registration and valid license who are actually and immediately available; and provided 

further, that said provisional appointment shall be effective not beyond the school year 

during which it was issued. 

This Resolution shall take effect immediately. 

Quezon City. Sept. 13, 2003 

(SGD.) KARINA CONSTANTINO-DAVID 

Chairman 

(SGD.) JOSE F. ERESTAIN, JR. (SGD.) J. WALDEMAR V. VALMORES 

Commissioner Commissioner 


Attested by: 

(SGD.) ARIEL G. RONQUILLO 

Director III 

--o0o-- 


Adoptive Measures in Filling Up Vacant Teaching Positions 

1. In order to address the imbalances resulting from the excess/shortage of teachers in the 

public school system due to the increase or decrease in enrolment and non-availability of


new teaching positions in the General Appropriations Act for CY 2003, a Teacher Deployment 

Analysis (Rainbow Spectrum) has been formulated, copy enclosed. 

2. Guided by this analysis, the following policies shall be strictly observed by the DepEd 

officials concerned in the filling-up of existing vacancies for teaching positions in the Division 

Offices, to wit: 

a. No appointment or assignment shall be issued by the Schools Division Superintendent 

to any existing vacant teaching positions arising from natural vacancies 

such as retirement, death, resignation, promotion, transfer in his/her division 

without prior clearance/authorization from the Regional Director concerned. 

b. In this regard, the Regional Director shall only issue authority to fill-up vacancies 

for public schools where such natural vacancy/ies exist under the HOT colored 

schools namely: 

1st priority - Black - no nationally funded teachers 

2nd priority - Red-severe teacher shortage 

3rd priority - Orange - moderate teacher shortage 

4th priority - Gold - manageable ratio 

Provided however, that public schools falling under the category of COOL colored 

schools which are offering multi-grade classes and servicing school-less barangay 

with newly constructed classroom as part of their catchment areas may be issued 

authority to fill-up vacancies. 

The Regional Director shall be guided by the Teacher Deployment Analysis (Regional 

Level) copy enclosed, covering his/her region in the issuance of authority 

to fill-up vacancies. 

c. Existing vacancies for teaching positions in the public schools classified as 

COOL colored schools shall not be filled-up, namely: 

Blue - excessive surplus teacher provision 

Sky Blue - moderate surplus teacher provision 

Green - generous teacher provision 

Yellow - national mean ratio 

For this purpose, the Regional Director shall in no case issue an authority to fill 

up such vacancies until such time that these teaching positions have been redeployed 

to other public schools. These vacant teaching positions shall be redeployed 

or transferred by the Schools Division Superintendent concerned to the 

different public schools classified as HOT colored schools taking into consideration 

the following priorities in their redeployment, as follows: 

1st priority - Black - no nationally funded teacher 

2nd priority - Red - severe teacher shortage 

3rd priority - Orange - moderate teacher shortage 

4th priority - Gold - manageable ratio 

5th priority - Cool Colored School - multigrade classes

1344 


The Schools Division Superintendent shall likewise be guided by the Teacher 

Deployment Analysis (Division Level) covering his/her division in the redeployment 

of these positions. This will be provided by the Division Office concerned to 

the different public schools. 

d. After the transfer/redeployment, the Schools Division Superintendent concerned 

may fill-up such vacancies subject to the clearance/authority from the Regional 

Director and upon submission of the List of redeployment to the Regional Office. 

e. The report of redeployment shall also be submitted to the DBM Regional office 

for its reference in the subsequent release of allotment and NCA to the DepEd 

Regional Office. 

f. The Regional Director shall submit to the Central Office thru the Office of 

Assistant Secretary for Planning immediately the comprehensive report of redeployment 

in his/her region and list of public schools issued the authority to fill-up 

vacancies. 

3. Appointment or assignment to be made by the Schools Division Superintendent relative to 

the existing teaching vacancies shall be governed by the guidelines to be issued relative to 

recruitment, appointment or assignment of public school teachers. 

4. Any DepEd official or employee who shall be found violating this issuance or part hereof 

shall be charged administratively. 





Secretary 

--o0o-- 


Teacher Orientation to Public Sector Unionism 

1. Consistent with the constitutional right to self-organization of civil servants and the guidelines 

issued on this matter under Executive Order No. 180, all public school teachers and 

other non-teaching personnel must be provided with relevant and adequate information on 

the legal bases of public sector unionism. This includes the information on their benefits or 

advantages derived from their active participation in the union to protect their interest which 

lead to the delivery of a more effective, efficient and dependable services to the general 

public. 

2. Public fora initiated by any duly registered public sector employeesí organization for the 

purpose of orienting the teaching and non-teaching personnel on the foregoing matters 

should be supported and encouraged.


3. Accordingly, all school principals and schools superintendents shall allow teachers and 

even non-teaching personnel to participate in any public employeesí organization sponsored 

seminar upon proper leave from school authorities provided that such activities shall not 

prejudice or disrupt the public service, in particular education related programs and activities. 



Date Filed: 25 June 2003 


Secretary 

--o0o-- 


Policy on Educational Field Trips 

(Supplemental to DECS Order No. 56, s. 2001 

and DepEd Order No. 51, s. 2002) 

1. With reference to field trips and other forms of outing, the following guidelines are being 

issued in addition to those contained in DECS ORDER No. 56, s. 2001 and DepEd Order 

No. 51, s. 2002 (copies enclosed); 

a. No field trip should be undertaken without the written consent of the parents, 

or studentís guardians; 

b. Where a majority joins the field trip, there should be no punitive measures or 

activities such as tests related to the trip, that will put the students who could not 

join the field trip at a disadvantage. They should be given activities in school to 

compensate for their inability to join the field trip. 

c. The field trip should be well planned ahead of time with the students, so that 

they know exactly what to look for in the field trip. Safety measures should be 

discussed before the field trip; 

d. Places to visit should be educational places, such as cultural and historical 

sites or science exhibits in museums which complement or supplement classroom 

lessons; 

e. Trips to malls and attendance at noon time TV shows, especially during class 

hours are discouraged; 

f. As much as possible, field trips should not put an additional financial burden on 

the parents. Possible sponsors or other sources can be tapped for the purpose; 

and


g. Attention is called to the other provisions of the previous DepEd Orders on field 

trips which still hold true. 




Secretary 

DepEd Order No. 51, s. 2002 

Policy on Educational Field Trips 

(Supplement to DepEd Order No. 56, s. 2001) 

Attachment 

In light of the recent vehicular accident in Isabela resulting in the death of several 

elementary schoolchildren who went on an educational field trip, the following guidelines are 

being issued in addition to those contained in DepEd Order No. 56, s. 2001 (copy attached*) 

1. Written consent from parents of schoolchildren joining the field trip should always be 

secured. 

2. School teachers should always accompany the schoolchildren from the time they assemble 

for the field trip up to the time they leave for their respective homes. Parent volunteers 

should also be encouraged to join the field trip to help in looking after the schoolchildren. 

3. The principal or teacher responsible for organizing the field trip should select the safest 

means of transportation. Passengers should be loaded into the vehicle in accordance with 

the maximum passenger capacity. Schoolchildren should not be allowed to ride on the roof of 

motor vehicles or on the boarding platform (ìsabitî) 

4. Drivers should be advised to drive with extreme care considering the number of schoolchildren-passengers. 

Furthermore they should be advised against taking any alcoholic drinks 

for the entire duration of the field trip. 

5. If the field trip involves swimming or some other recreational activity or sport after the visit 

to the places of interest, teachers (or lifeguards in the case of swimming) should be strategically 

stationed to watch over the schoolchildren. 

6. To the extent that resources would allow, the school principals or teachers should arrange 

for optional accident insurance coverage for the schoolchildren who will join the field trip. 

The above guidelines are only some of the many possible precautionary measures. 

School principals and teachers are enjoined to identify additional measures, guided by the 

principle that since they exercise temporary parental authority over the schoolchildren, they 

should treat them in a manner that a responsible and caring parent would treat his/her own 

children. 




For immediate and wide dissemination. 

Adopted: 25 Oct. 2002 



Secretary 

--o0o-- 

DepEd Order No. 53, s. 2002 

Updated Guidelines on Grant of Vacation Service Credits to Teachers 

1. In line with the policy of this Office to periodically review existing rules and regulations with 

a view to improve the delivery of education services, the various issuances on the grant of 

vacation service credits to teachers on teachersí leave basis are hereby updated and 

consolidated as follows: 

a. Statement of Policy 

The basic policy in the grant of vacation service credit is that it should be given only for 

work beyond regular functions or beyond regular work hours/days where payment of honorarium 

or overtime pay is not possible. In addition, there are situations wherein extraordinary 

work is demanded from teachers including those which expose their lives to certain risk and 

for which monetary compensation is not enough. Thus, extra non-monetary compensation is 

justified. 

b. Definition of Terms 

a. For purposes of this Order, the term, ìteacherî shall refer to teachers who do 

not have to report for classes during the Christmas and long summer vacation 

and still be entitled to their regular compensation. 

b. The term, teachersí vacation service credits refers to the leave credits 

earned for services rendered on activities during summer or Christmas vacation 

or in the course of the regular school year, as authorized by the proper authority. 

c. The term normal teaching load shall refer to six (6) hours of actual classroom 

teaching a day. 

c. Uses of vacation service credits 

Vacation service credits are used to offset absences of a teacher due to illness. To 

offset absences on account of illness, one (1) work day service credit is used to offset one 

(1) day of absence.


d. Activities Eligible for the Grant of Service Credits 

Service credits may be granted for the following activities: 

a. service rendered during registration and election days as long as these are 

mandated duties under existing laws; 

b. services rendered during calamity and rehabilitation when schools are used as 

evacuation centers; 

c. services rendered in connection with the conduct of remedial classes during 

the summer or Christmas vacation or outside of regular school days; 

d. services rendered in connection with early opening of the school year; 

e. services rendered during school sports competitions held outside of regular 

school days; 

f. services rendered by those who train teachers in addition to their normal teaching 

loads; 

g. teaching overload not compensated by honoraria; 

h. teaching in non-formal education classes in addition to teaching in formal 

education classes carrying a normal teaching load; 

i. work done during regular school days if these are in addition to the normal 

teaching load; 

j. conduct of testing activities held outside of school days; and 

k. attendance/participation in special DepEd projects and activities which are 

short-term in duration such as English, Science and Math Mentorsí, Training, 

curriculum writing workshop, planning workshop, etc., if such are held during the 

summer vacation or during weekends. 

A premium of 20% may be granted for educational activities (as opposed to noneducational 

activities such as election duties, calamity assistance) which require specialized 

expertise. 

e. Activities Not Eligible for the Grant of Service Credits 

Service credits shall not be granted for the following activities: 

a. In-service training programs fully funded by the government; 

b. assignment to clerical work, such as checking forms and finishing reports 

commonly required in connection with the opening and closing of classes; 

c. reassignment of teachers to duty in another bureau or office; (detailed in 

another government office)


d. assignment in connection with exhibits at a fair; 

e. postponement of a regular teacherís vacation; and 

f. time spent in travelling to and from station to the place where services are 

rendered. 

f. Procedure in the Grant of Service Credits 

a. The following steps shall be followed in the grant of service credits: 

a.1 Head of office/school recommends approval of request to render vacation 

service 

a.2 Schools Division Superintendent approves/disapproves request 

a.3 If reason for request is not among those listed above, request should be 

forwarded to the Regional Director for action if activity is regionwide and to the 

Central Office through the Regional Director if activity is DepEd-wide. For attendance/participation 

in DepEd-wide programs and projects, the Central Office 

shall make the necessary issuances on the grant of vacation service credits. 

b. The following documents/requirements shall be accomplished/submitted after 

completion of vacation service: 

g. Other Rules 

b.1 accomplishment report 

b.2 duly signed DTR/CS Form 48 

The following rules shall also apply in the grant or use of service credits: 

a. One work day of vacation service credit is granted for one day (eight hours) of 

service; 

b. The number of days of vacation service credits granted to a teacher shall not 

exceed 15 work days in one year except in cases authorized by the Secretary 

upon the recommendation of the Regional Director; 

c. Vacation service credits shall not be granted for services rendered without 

previous authority; 

d. Teachers on detail in offices or assigned to non-teaching jobs are on the 

vacation-sick leave basis and should not therefore be granted vacation service 

credits; 

e. In the monetization of teachers leave credits, unused vacation service credits 

shall be converted into vacation-sick leave credits. After monetization, the remaining 

vacation-sick leave credits shall be converted back to vacation service 

credits;


The formulas in the convertion of vacation service credits to the vacation and sick 

leave credits is as follows: 

Vacation and Sick Leave* = 30y/69 

Where 30 = Number of days in a month 

Y = Total number of teacherís service credits 

69 = 58 days of summer vacation plus 

11 days of Christmas vacation 

*No. of days derived shall be divided equally into vacation and sick leave credits 

The formula in the conversion of vacation and sick leave credits to vacation 

service credits is as follows: 

Y = V + SL 

----------- X 69 

30 

f. The vacation service credits of a teacher who transfers to a non-teaching 

position may be converted into vacation-sick leave credits and vice-versa; and 

g. Unused vacation service credits of teachers who resigned, retired, or are 

separated from the service through no fault of their own on or after January 16. 

1986 shall be paid the money value of their unused vacation service credits 

converted to vacation and sick leave credits. 

h. These guidelines shall take effect immediately. 

2. Strict compliance with this Order is directed. 




Secretary 

--o0o-- 

DECS-TESDA-CHED Joint Implementing Rules and Regulations 

of ìAdopt a School Act of 1998î (R.A. No. 8525) 

Pursuant to Section 8 of Republic Act No. 8525, otherwise known as the ìAdopt a 

School Act of 1998î enacted on February 14, 1998, the following rules and regulations are 

hereby adopted to implement the provisions of the said Act: 

PART I. PRELIMINARY PROVISIONS 

RULE Title - These rules and regulations shall be known as the Implementing Rules of the 

Adopt a School Act of 1998 (R.A. No. 8525) hereinafter referred to as the ìRulesî.


RULE Purpose - The purpose of these Rules is to ensure the effective and efficient implementation 

and enforcement of the provisions of Republic Act No. 8525. 

RULE Definition of Terms - When used in these Rules, the following terms shall be defined 

as follows: 

a. Act refers to Republic Act No. 8525. 

b. Adopting Private Entity refers to an individual engaged in trade or business 

or in the practice of his profession or other business organizations, like a partnership, 

corporation or cooperative, either resident or non-resident, who/which 

teams up with the Department of Education (DepEd), Commission on Higher 

Education (CHED) or with the Technical Education Skills and Development 

Authority (TESDA), towards providing much needed assistance and service to 

public school. 

c. Adopt-a-School Program refers to a mechanism which allows private entities 

to assist public school in particular aspect of educational program within 

an agreed period of time. 

d. Assistance refers to the help/aid/contribution/donation provided by an adopting 

entity to a public school. Assistance maybe in the form of infrastructure, 

teaching and skills development, learning support, computer and science laboratories, 

and food and nutrition. 

e. Agreement refers to a Memorandum of Agreement (MOA) entered into by 

and between the adopting private entity and the public school specifying the 

terms and conditions of the adoption, including tasks and responsibilities of the 

contracting parties. 

f. Coordinating Council refers to a body chaired by the Secretary of DEPED 

and co-chaired by Chairman of CHED and the Director-General of the TESDA 

and with the Chairperson of the National Anti-Poverty Council (NAPC)1 and a 

representative from a National Federation of Chambers of Commerce and Industry 

to be appointed by the President of the Philippines, as members. It shall 

be tasked to coordinate, monitor and decide on policy matters related to the 

implementation of the Adopt a School Program. 

g. Public School refers to a government school, whether elementary, secondary, 

post-secondary or tertiary, which enters into an Agreement with an adopting 

entity concerning assistance herein referred to. 

h. National Secretariat refers to an office composed of representatives of the 

three education agencies, namely DepEd, CHED and TESDA which will provide 

overall management and coordination of the Program. 

i. Secretariat refers to an office created in the respective offices of DepEd, 

CHED and TESDA with the primary function of managing and coordinating the 

Program. 

PART II. PROCEDURES FOR PARTICIPATION IN 

THE ADOPT-A-SCHOOL PROGRAM 

In order to participate in the Adopt a School Program, the following procedures and 

requirements should be complied with: 

RULE Agreement between the Adopting Private Entity and the School - A Memorandum of 

Agreement (MOA) specifying the details of the adoption shall be entered into between the


Adopting Private Entity and the head of the school concerned, and thereafter ratified by the 

concerned Regional Director of CHED, Provincial Director of TESDA and Division Superintendent 

of DepEd. 

The Agreement shall be for a minimum of at least two (2) years subject to extension. 

Provided that said period maybe shortened if the Adopting Private Entity is dissolved prior to 

the end of such period or unless otherwise terminated due to failure of the Adopting Private 

Entity to possess qualifications as stated in this Act. 

RULE Qualifications for Participating Schools - Any government school in all levels may 

participate in the program. Priorities shall be given to schools located in poorest provinces, 

low-income municipalities and other local government units (LGUs) experiencing severe 

classroom shortages, insufficient budget or having numerous poor but high performing learners. 

RULE Periodic Review - A review of the adoption shall be undertaken by the Local School 

Board (LSB) of the province or city where the school is located, about the implementation of 

the Adopt a School Program pursuant to guidelines as maybe periodically issued by the 

Coordinating Council including but not limited to: 

a. Delivery and utilization of the proposed project; 

b. Impact of the proposed project on the school and the community in terms of 

social benefits; and 

c. Participation of the other stakeholders to support the project. 

LSB, Provincial Technical Education and Skills Development Committee (PTESDC) and 

CHED/PASUC Regional Offices are encouraged to conduct review of the program and 

submit their recommendations to the Coordinating Council. Further, they may also recommend 

the termination of the program due to poor performance of parties and other grounds 

as maybe issued by the Coordinating Council. The Adopting Private Entity may appeal the 

assessment of the LSB, PTESDC and CHED to the Coordinating Council whose decision 

shall be final and appealable. 

PART III. TAX INCENTIVES 

RULE Additional Deduction for Expenses Incurred for the Adoption - Provisions of existing 

laws to the contrary notwithstanding, expenses incurred by the Adopting Private Entity for 

the ìAdopt-A-School Programî shall be allowed an additional deduction from the gross income 

equivalent to fifty percent (50%) of such expenses. 

The tax incentives provided herein as well as valuation of assistance shall be covered 

by BIR Revenue Regulation No. 10-2003. 

RULE Claim for Tax Deduction by Private Resident - At the end of fiscal year, the Adopting 

Private Entity shall file an application for tax deduction accompanied by supporting documents 

to Coordinating Council through the National Secretariat. 

The Coordinating Council shall act on the application within thirty (30) days from receipt 

of application by the Secretariat. After approval of the application by the Coordinating


Council, the Secretariat shall endorse it to the Regional District Officer (RDO) of the Bureau 

of Internal Revenue (BIR) having jurisdiction over the place of busines of the Adopting 

Private Entity; copy furnished the RDO having jurisdiction over the property if the donation 

or contribution is in the form of real property. 

RULE Foreign Donations - Any application for tax/duty free importation of foreign donation 

shall be endorsed by DepEdís Division School Superintendent, TESDAís Provincial Director 

and CHEDís Regional Director. The applicant shall submit the aforecited endorsement, MOA 

and the following documents to the Secretariat for consideration of the Coordinating Council. 

1. An application letter for duty/tax free importation; 

2. Deed of Undertaking indicating that donated articles shall be used actually and 

directly for educational purposes; 

3. Donated articles shall not be resold or transferred for material consideration. 

The Coordinating Council shall then transmit all approved application for tax/duty free 

importation of foreign donations to the Department of Finance for their appropriate action. 

RULE Additional Incentives - The adopting company or enterprise, in addition to the incentive 

provided in the preceding section, shall be entitled to have its name emblazoned beneath 

the name of the school after words indicating that the school is under the ìAdopt-a-School 

Program.î Moreover, the Adopting Private Entity shall be represented in the local school 

board of the municipality where the adopted elementary or high school is located. 

PART IV. 

PROGRAM ADMINISTRATION 

RULE Coordinating Council - The Coordinating Council is hereby created to spearhead the 

implementation of this Act. It shall have the following powers and functions: 

a. Serve as an advisory body on all policy matters pertaining to the program; 

b. Provide policy guidance and direction for the implementation of the provisions 

of RA 8525; 

c. Formulate policies and guidelines to ensure the proper implementation of the 

Program; and 

d. Monitor and evaluate the implementation of the Program. 

The Council shall have a regular meeting once every three (3) months or as the need 

arises. A member may be represented by a person in case of the absence by any member 

of the Coordinating Council, the absent member is required to send a representative who 

must possess the rank of at least an Undersecretary/Commissioner/Deputy Director-General 

or higher. 

Whenever a member is unable to attend the meeting of the Coordinating Council, he 

shall send a representative who must be an Undersecretary or its equivalent rank such as 

Commissioner or Deputy Director General: Provided, That the highest ranking member 

present shall preside over the meeting in case the Chairperson is absent. 

RULE Secretariat - The National Secretariat shall be composed of representatives of DepEd, 

TESDA and CHED. It shall be provided technical and administrative support from DepEd and


shall hold office in the premises of DepEd. Further, it shall be mandated to provide overall 

management and coordination of the Program and to perform the following functions: 

a. Implement the policies set by the Coordinating Council; 

b. Coordinate the Program at all levels; 

c. Recommend policies, plans and priorities to the Coordinating Council; 

d. Provide technical assistance and support in critical areas and stages of implementation; 

e. Endorse to the Regional District Office (RDO) of the Bureau of Internal Revenue 

(BIR) documents relative to the availment of the tax incentive provisions of 

the Adopt-a-School Law after the application is approved by the Coordinating 

Council, and 

f. Perform other functions as necessary. 

Further, DepEd, CHED and TESDA shall make provisions for the organization of their 

own Secretariat to manage and coordinate the implementation of the Program by the respective 

agencies. 

RULE Benefits, Privileges and Emoluments of the Council and Secretariat - The members 

of the Coordinating Council and the representatives of tri-focal agencies to the Secretariat 

shall not receive compensation in connection with the performance of their functions. Provided, 

that they shall be entitled to reimbursements for reasonable expenses related to their 

performance of activities directly connected with the implementation of the Act. 

PART V. MISCELLANEOUS PROVISIONS 

RULE Separability - The provisions of these Rules are hereby declared to be separable. In 

the event that one or more of its provisions are held to be invalid, the validity of the other 

provisions shall not be affected thereby. 

RULE Effectivity - These Rules shall take effect thirty (30) days after its publication in a 

national newspaper of general circulation and submission of a copy to the University of the 

Philippines Law Center. 


Secretary, Department of Education 

(SGD.) ROLANDO R. DIZON 

Chairman, Commission of Higher Education 

(SGD.) ALCESTIS M. GUIANG 

Director-General, Technical Education on Skills Development Authority 

DEPARTMENT OF ENVIRONMENT AND NATURAL RE- 

SOURCES 

Date Filed: 04 July 2003


DENR Administrative Order No. 2003-24 

Implementing Rules and Regulations of the Chainsaw Act of 2002 

(R.A. No. 9175) Entitled ìAn Act Regulating the Ownership, Possession, 

Sale, Importation and Use of Chainsaws, Penalizing Violations 

Thereof and For Other Purposesî 

Pursuant to Section 9 of R.A No. 9175, otherwise known as the ìChainsaw Act of 

2002î, the rules and regulations governing the implementation of the Act is hereby promulgated 

for the compliance and guidance of all concerned. 

CHAPTER I 

BASIC POLICY, OBJECTIVES AND DEFINITIONS 

Section 1. Basic Policy. It is the policy of the State, consistent with the Constitution, to 

conserve, develop and protect the forest resources through sustainable forest management 

(SFM). Towards this end the State shall pursue an aggressive forest protection program 

geared towards eliminating illegal logging and other forms of forest destruction which are 

being facilitated with the use of chainsaws. 

Sec. 2. Objectives. This Order is promulgated to achieve the following objectives: 

2.1 To regulate the purchase, ownership, possession, sale, transfer, importation and/or 

use of chainsaws to prevent them from being used in illegal logging or unauthorized 

clearing of forests; 

2.2 To establish and maintain national and local databases on existing number of 

chainsaws, authorized dealers, authorized users, importation and sales thereof, among 

others; and 

2.3 To facilitate the monitoring of the operations of chainsaw importers, users, and 

others. 

Sec. 3. Definition of terms. As used in, and for the purpose of these guidelines, the 

following terms and phrases shall be understood to mean: 

3.1 Chainsaw - refers to any portable power saw or similar cutting implement rendered 

operative by an electric or internal combustion engine or similar means, that may be 

used for, but is not limited to, the felling of trees or the cutting of timber. 

3.2 Chainsaw dealer - shall refer to a person, natural or juridical, engaged in the 

manufacture, importation, distribution, purchase and/or sale of chainsaws, as authorized 

by the DENR. 

3.3 Chainsaw user - any person, natural or juridical, who uses and/or operates a 

chainsaw for the purpose of felling, bucking, trimming and/or breakdown into suitable 

sizes of timber, coconut, anahaw, and other palms and similar woody materials, as 

authorized by the DENR. 

3.4 Chainsaw owner/possessor - any person, natural or juridical, who owns/possesses 

a chainsaw, as authorized by the DENR. 

3.5 Department - refers to the Department of Environment and Natural Resources (DENR). 

3.6 Forestland - refers to the land of the public domain which have not been declared 

as alienable and disposable land and includes the public forest, the permanent forest


or forest reserve, forest reservations, timber lands, grazing lands, game refuge and 

bird sanctuaries. 

3.7 Legal purpose - includes activities such as tree pruning, tree surgery, landscaping, 

timber stand improvement, and other allied silvicultural activities. 

3.8 Orchard - lands planted with fruit trees and other trees of economic value, including 

bamboo, coconut, anahaw and other palms. 

3.9 Secretary - refers to the Secretary of the DENR. 

3.10 Industrial Tree Farmer - a person engaged in large-scale tree farming in private 

lands 

CHAPTER II 

SCOPE 

Sec. 4. Scope. These rules and regulations shall cover the purchase, manufacture, 

ownership, possession, sale, transfer, importation and use of chainsaws. The registration of 

chainsaws with the DENR prior to the effectivity of this Order shall be considered terminated. 

Henceforth, all chainsaw owners shall apply for registration within three months from the 

effectivity of this Order. 

In the province of Palawan, the provisions of R.A. No. 9175 shall be implemented by 

the Palawan Council for Sustainable Development pursuant to R.A. No. 7611 or the Strategic 

Environmental Plan for Palawan. Report on issued Certificate of Registration or permit shall 

be furnished the FMB Secretariat thru the Provincial Environment and Natural Resources 

Officer (PENRO) of Palawan. 

CHAPTER III 


Sec. 5. Persons authorized to purchase, transfer the ownership, import, 

manufacture, distribute, and/or sell, re-sell chainsaws. Only persons duly authorized by 

the DENR shall be allowed to purchase, transfer the ownership, import, manufacture, distribute 

and/or sell, re-sell chainsaws. 

Sec. 6. Persons authorized to own, possess and use chainsaws. The Department 

shall issue a Certificate of Registration to owners, possessors and/or users of chainsaws 

who fall under any of the following categories: 

6.1 Holder of a subsisting Timber License Agreement, Production Sharing Agreement, 

Co-Production Sharing Agreement, or a Private Land Timber Permit/Special Private 

Land Timber Permit, Community-Based Forest Management Agreement (CBFMA), 

Integrated Forest Management Agreement (IFMA), Socialized Industrial Forest Management 

Agreement (SlFMA), or other similar tenurial instruments 

6.2 Orchard or fruit tree farmer 

6.3 Industrial tree farmer 

6.4 Licensed wood processor and the chainsaw shall be used for the cutting of timber 

that has been legally sold to said applicant. 

6.5 Any one who shows satisfactory proof that the possession and/or use of chainsaw 

is for a legal purpose 

6.6 Agencies of the government, government-owned and controlled corporations (GOCCs) 

that use chainsaws in some aspects of their functions.


Sec. 7. Registration of Chainsaws. Upon effectivity hereof, all persons, partnerships, 

or corporations who own or are otherwise in possession of chainsaws must register 

the same with the Department through any of its Community Environment and Natural Resources 

Officers (CENRO) who shall issue the corresponding Certificate of Registration if 

he finds such persons, partnerships or corporations to be qualified hereunder. 

The Certificate of Registration number, the date of registration and expiry date shall be 

indicated in a serialized sticker to be attached to the chainsaw. 

A Certificate of Registration of a chainsaw used for legitimate purpose shall be valid for 

two (2) years upon issuance, renewable for the same period; provided that Certificate of 

Registration issued to non-commercial orchard and fruit tree farmers, and similar entities 

whose line of business or work are not related to wood and/or timber production, processing 

and trade shall be valid for a period of five (5) years upon issuance, renewable for the same 

period. 

Certificate of Registration shall also serve as the permit to own, possess and/or use the 

registered chainsaw. 

Sec. 8. Requirements for Certificate of Registration. The applicants for registration 

of chainsaws shall submit to the Community Environment and Natural Resources Officer 

(CENRO) concerned all the following requirements: 

8.1 Original/new application 

8.1.1 Holder of a subsisting Timber License Agreement, Production Sharing Agreement, 

Co-Production Sharing Agreement, or a Private Land Timber Permit/Special Private 

Land Timber Permit, CBFMA, IFMA, SIFMA, or other similar tenurial instruments 

ï Duly accomplished application form 

ï Copy of the tenurial instrument 

ï Detailed specification of chainsaws to be registered (brand, model, engine 

capacity, serial number), purpose of use, areas/location where it is to be used, 

name of owner, date of purchase, and name of dealer. 

ï Proof of ownership of chainsaw (sales invoice, deed of sale, etc.) 

ï Registration fee 

8.1.2 Orchard or fruit tree farmer or industrial tree farmer 






ï Copy of certificate of tree plantation ownership 

ï Certification from Barangay Captain concerned that applicant is an orchard or 

tree farmer. 

ï Registration fee


8.1.3 Licensed Wood Processors 


ï Copy of approved Wood Processing Plant Permit 

ï Detailed specification of chainsaws to be registered (model, brand, engine 


name of owner, data of purchase, and name of dealer. 



8.1.4 Agencies of the government, government-owned and controlled corporations. 


ï Certification from Head of Office or his/her authorized representative that 

chainsaws are owned/possessed by the office and used for legal purpose 

(specify) 

ï Detailed specification of chainsaws owned/possessed (brand, model, engine 




8.1.5 Other persons/entities who can show satisfactory proof that the possession and/or use 

of chainsaws is for legal purpose. 


ï Copy of the Business Permit from the Local Government Unit or Affidavit that 

chainsaw is needed in applicantís work/profession and will be used for legal 

purpose. 



name of owner, data of purchase, and name of dealer. 


8.2 Application for Renewal 

8.2.1 Duly accomplished application form 

8.2.2 Photo copy of the latest Certificate of Registration of chainsaw 

8.2.3 Registration fee 

Sec. 9. Requirements for permit/authority to purchase, import, manufacture and/ 

or transfer ownership, sell/dispose, lease, rent, lend chainsaws. Applicants for permit/ 

authority shall submit the following requirements: 

9.1 Permit to Purchase or Import 

9.1.1 Duty accomplished application form together with the following details: 

ï Number of chainsaws to be purchased/imported with specifications 

ï Purpose for purchasing/importing


ï Name and address of seller/supplier 

ï Expected time of arrival at port of entry and/or release from the Bureau of 

Customs, if imported 

ï Import Entry Declaration from the Bangko Sentral ng Pilipinas 

9.1.2 Business name registration of applicant from DTI, SEC registration or CDA registration 

9.1.3 If applicant is an individual, Affidavit that he will use the chainsaw for a legal purpose 

only (e.g., tree pruning, tree surgery, landscaping, timber stand improvement, and 

other allied silvicultural activities). 

9.1.4 Copy of purchase orders, if imported 

9.1.5 Permit fee 

9.2 Permit to manufacture 

9.2.1 Duly accomplished application form together with the following details: 

ï Number and type of chainsaws to be manufactured 

ï Source of materials, parts or accessories 

9.2.2 Business name registration of applicant from DTI, SEC registration or CDA registration 


9.3 Permit to sell/re-sell/dispose/distribute/transfer of ownership 

9.2.4 Duly accomplished application form together with the number and specifications of 

chainsaws to be sold 

9.2.5 Proof of ownership of chainsaws (sales invoice, deed of sale, etc.) 

9.2.6 Business registration from DTI or in case of individual transactions, this requirement 

may be dispensed with. 


9.4 Authority to lease, rent or lend 

9.4.1 Letter request 

9.4.2 Contract of lease, rent, lending 

9.4.3 Copy of chainsaw registration 

Sec. 10. Issuing Authority. Application for Permit to Import and Manufacture chainsaws 

shall be filed at the Office of the Regional Executive Director who shall have it processed and 

approved/disapproved within 15 working days. The permit shall be valid for a period of one 

(1) year. The original copy of the permit shall be issued to the chainsaw importer or manufacturer 

a duplicate copy to the FMB Secretariat, a triplicate copy to the Regional Executive 

Director and authenticated copy to the Bureau of Customs, in case of imported chainsaws.


Applications for permits to purchase, transfer of ownership and/or sell, re- sell/dispose/ 

distribute chainsaws shall be filed at the Office of the CENRO shall have it processed and 

approved/disapproved within 15 working days. The permit shall be valid for a period of one 

(1) year. The original copy of the permit shall be issued to the chainsaw importer or manufacturer, 

a duplicate copy to the FMB Secretariat, and a triplicate copy to the CENRO. 

Certificate of Registration shall be issued by the CENRO concerned to qualified applicants 

within 15 working days upon application. The CENRO shall maintain a registry book 

and submit a periodic report of all registered chainsaws to the Secretary through channels. 

The original copy of the Certificate of Registration shall be kept by the owner of the 

chainsaw, a duplicate copy by CENRO and a triplicate copy by FMB Secretariat while an 

authenticated copy of Certificate of Registration shall be in the person operating the chainsaw 

at all times together with an authenticated copy of official receipt of registration. 

Sec. 11. Registration and Permit Fee. A permit fee of P500.00 for the purchase, 

importation, manufacture, sale, re-sale, transfer and/or disposition of chainsaws shall be 

collected for every permit issued. A registration fee of P500.00 shall be collected for every 

chainsaw registered. The same amount shall be paid for renewal of registration or permit. 

CHAPTER IV 

PENAL PROVISIONS 

Sec. 12. The following acts are punishable under this Order. 

12.1 Selling, Purchasing, Re-selling, Transferring, Distributing or Possessing a 

Chainsaw Without a Proper Permit. Any person who sells, purchases, transfers the 

ownership, distributes, or otherwise disposes or possess a chainsaw without first securing 

the necessary permit from the Department shall be punished with imprisonment 

of four (4) years, two (2) months and one (1) day to six (6) years or a fine of not less 

than Fifteen Thousand Pesos (P15,000.00) but not more than Thirty Thousand Pesos 

(P30,000.00) or both at the discretion of the court, and the chainsaw/s confiscated in 

favor of the government. 

12.2 Unlawful Importation or Manufacturing of Chainsaw. Any person who imports or 

manufactures a chainsaw without obtaining prior authorization from the Department 

shall be punished by imprisonment of not less than one (1) month nor more than six (6) 

months and a fine of not less than One Thousand Pesos (P1,000.00) nor more than 

Four Thousand Pesos (P4,000.00). 

12.3 Tampering of Engine Serial Number. Any person who is found to have defaced or 

tampered with the original registered engine serial number of any chain saw unit shall 

be punished by imprisonment of not less than one (1) month nor more than six (6) 

months and a fine of not less than One Thousand Pesos (P1,000.00) nor more than 

Four Thousand Pesos (P4,000.00). 

12.4 Actual Unlawful Use of Chainsaw. Any person who is found to be in possession of a 

chainsaw and uses the same to cut trees and timber forest land or elsewhere except as 

authorized by the Department shall be penalized with imprisonment of six (6) years and


one (1) day to eight (8) years or a fine of not less than Thirty Thousand Pesos 

(P30,000.00) but not more than Fifty Thousand Pesos (P50,000.00) or both at the 

discretion of the court without prejudice to being prosecuted for a separate offense 

that may have been simultaneously committed. The chainsaw unlawfully used shall be 

likewise confiscated in favor of the government. 

If the violation under this Section is committed by or through the command or order of 

another person, partnership or corporation, the penalties herein provided shall likewise be 

imposed on such other person, or the responsible officer(s) in such partnership or corporation. 

If the offender is a public official or employee, in addition to the above penalties, the 

offender shall be removed from office and perpetually disqualified from holding any public 

office. 

The chainsaws confiscated under this Section shall be turned-over to the DENR which 

shall sell the same through public auction to persons duly authorized to own, possess and 

use chainsaw as explicitly enumerated under Section 6 hereof. Proceeds of sale thereof 

shall accrue to the Department. 

Out of the proceeds from public auction, 20% shall be given as reward to the informer 

in conformity with Section 15 hereof. The balance shall be shared between the FMB 

Secretariat and the PENRO/CENRO concerned on 40%:60% basis which shall be used for 

operational expenses of former and for monitoring the compliance by the permittees with the 

terms and conditions of their permits or Certificate of Registration by the latter. 

Sec. 13. The following chainsaws shall be subject to confiscation: 

13.1 Chainsaws sold, purchased, resold, transferred, distributed, leased, rented, lent or 

possessed. 

13.2 Chainsaws possessed and actually used to cut trees and timber in forestland or elsewhere 

without valid Certificate of Registration. 

13.3 Chainsaws used as a tool or implement in cutting, gathering, collecting, removing and/ 

or processing timber or forest products without legal documents. 

Sec. 14. Confiscation of Chainsaws 

Judicial Confiscation 

Chainsaws sold, purchased, resold, transferred, distributed, leased, rented, lent or 

possessed and chainsaws possessed and actually used to cut trees and timber in forest land 

or elsewhere without authority shall be judicially confiscated pursuant to a criminal case filed 

under Section 7, items (1) and (4) of R.A. 9175 otherwise known as an Act Regulating the 

Ownership, Possession, Sale, Importation and Use of Chainsaws, Penalizing Violations Thereof 

and for Other Purposes. 

Chainsaws which are not registered or renewed under this regulation shall be considered 

unlawfully sold, purchased, transferred, distributed, disposed or possessed. The CENR 

Office concerned where such chainsaws are supposed to be registered or renewed shall 

issue a written declaration to such effect and file the necessary complaint with the appropri-


ate official authorized by law to conduct a preliminary investigation of criminal cases and/or 

file an information in court. 

Chainsaws possessed and actually used to cut trees and timber in forestland or elsewhere 

without any authority shall likewise be judicially confiscated in favor of the government. 

If the unlawful use is committed in the presence of Environment and Natural Resources 

Officer (ENRO), the user/possessor shall be arrested even without warrant and the 

chainsaw(s) seized. The arresting ENRO shall deliver within thirty-six (36) hours the offender 

and the chainsaw to, and file the proper complaint, with the appropriate official designated 

by law to conduct preliminary investigation and/or file an information in court. 

Chainsaws sold, purchased, resold, transferred, distributed, leased, rented, lent or 

possessed without permit, which are displayed in open view shall be seized and the possessor 

shall be arrested even without warrant. The arresting ENRO shall deliver within thirtysix 

(36) hours the offender and the chainsaw(s) to, and file the proper complaint with the 

appropriate official designated by law to conduct preliminary investigation and/or file an 

information in court. 

Confiscation under Section 68, P.D, 705 as amended 

Chainsaws used in cutting, gathering, collecting, removing and/or processing timber or 

forest products without legal documents shall be subject to judicial and/or administrative 

confiscation under Sections 68 and 68-A of P.D. 705, as amended, and as implemented by 

DAO 97-32 and other subsequent forestry regulations that may be promulgated. 

CHAPTER V 

REWARD 

Sec. 15. Reward. Any person who voluntarily gives information leading to the recovery 

or confiscation of an illegally possessed or unregistered chainsaw and the resultant conviction 

of persons charged thereof, shall be entitled to a reward equivalent to twenty percent (20%) 

of the value of the chainsaw unit(s) so confiscated. The amount necessary to carry out the 

purpose of this section shall be included in the budget of the Department. 

CHAPTER VI 

AUTHORITY OF THE SECRETARY 

Sec. 16. The Secretariat. A Secretariat is hereby organized at the Forest Management 

Bureau which shall coordinate with the Joint Congressional Oversight Committee and DENR 

field offices. It shall also maintain a database of all records, data and accounts of all imported, 

registered, confiscated and auctioned-off chainsaws. 

The CENROs, through the PENROs and the REDs shall submit monthly report of chainsaw 

purchasers, importers, manufacturers and dealers and chainsaws registered, confiscated 

or disposed of to the said Secretariat who shall submit a consolidated monthly report to the 

Secretary furnishing a copy to the Joint Congressional Oversight Committee for information 

and record as specified in Section 11 of RA 9175. 

Sec. 17. Revocation of Registration and Permit. The Secretary or his duly authorized 

representative may revoke any Certificate of Registration or Permit/Authority previ-


ously issued to a person, partnership or corporation found violating the rules and regulations 

issued pursuant thereto and shall be penalized in accordance with the provisions of this 

Order. 

Registered chainsaws may be leased, rented or lent for a legal purpose, subject to the 

approval of the CENRO concerned, otherwise the Certificate of Registration shall be revoked 

by the Secretary or his/her duly authorized representative: Provided that in cases of force 

majeure or where public safety is at stake, such CENRO approval shall not be required. 

A lost registered chainsaw should be reported by the owner/user to the nearest DENR 

office within three (3) calendar days from date of loss. The said DENR Office shall issue a 

recall of the Certificate of Registration, and inform the issuing CENRO of said recall. The 

said DENR office shall likewise inform the Secretary, through the FMB Secretariat, of said 

loss and recall of registration. 

In case of unserviceable chainsaws, the owner shall immediately report the same to the 

CENRO concerned and request for the revocation of the Certificate of Registration provided 

that if the Certificate of Registration has expired, the owner shall notify the CENRO in writing 

that he is no longer renewing the Certificate of Registration. 

CHAPTER VII 

FINAL PROVISIONS 

Sec. 18. Separability Clause. If, for any reason, any part or provision of this Order 

shall be declared as unconstitutional or invalid, such parts or provisions not affected thereby 

shall remain in full force and effect. 

Sec. 19. Repealing Clause. All orders, memoranda, circulars, rules and regulations, 

or parts thereof which are inconsistent with any of the provisions of this Order are hereby 

repealed and/or amended accordingly. 

Sec. 20. Effectivity. This Order shall take effect fifteen (15) days after its complete 

publication in at least two (2) national newspapers of general circulation and upon 

acknowledgment of the UP Law Center. 



(SGD.) ELISEA G. GOZUN 

Secretary 

óo0oó 


Hydrocarbon Standards for Motorcycle 

Pursuant to Section 2, Rule XXXI Part IX of DENR DAO 2000-81 of RA 8749, the 

Department of Environment and Natural Resources shall formulate and establish the neces-


sary standards for other mobile sources, specifically on Hydrocarbon (HC) and Carbon 

Monoxide (CO) for motorcycle. 

Definitions: 

Mobile Sources - means any vehicle propelled by or through combustion of carbon-based 

or other fuel, constructed and operated principally for conveyance of persons or the transportation 

of property or goods, 

Motor vehicle - means any vehicle propelled by a gasoline or diesel engine or by any other 

than human or animal power, constructed and operated principally for the conveyance of 

persons or the transportation of property or goods in a public highway or street open to 

public use. 

Emission - any air contaminant, pollutant, gas stream, or unwanted sound from a known 

source which is passed into the atmosphere. 

Certificate of Conformity (COC) - refers to the certificate issued by Department (DENR) to 

a vehicle manufacturer/assembler or importer certifying that a particular new vehicle type 

meets the requirements provided under the Act (RA 8749) and its Implementing Rules and 

Regulations 

Scope/Coverage: 

This standard shall apply to all in-use motorcycles equipped with 2-stroke and 4-stroke 

engines. 

Emission Standards: 

The Emission Standards on Hydrocarbon (HC) for In-use motorcycles are as follows: 

1. 7,800 ppm for urban centers such as cities, capital cities/municipalities of provinces and 

metro-wide centers such as Metro Manila, Metro Cebu and Metro Iloilo. 

2. 10,000 ppm for municipalities other than the above (rural areas). 

Review and Revision of Standards: 

The above hydrocarbon (HC) standards shall be implemented for a period of three 

years which shall include their review and evaluation every two years by DENR through the 

EMB, in coordination with DOTC/LTO for possible modification after the third year. 

Effectivity: 

This Order shall take effect immediately after fifteen (15) days from its publication in a 

newspaper of general circulation or filing (in triplicate copies) with the University of the 

Philippines Law Center pursuant to Presidential Memorandum Circular No. 11 dated October 

1992 and remain in force unless revoked or repealed in writing.




Approved: 


Secretary 

óo0oó 

DENR Administrative Order No. 2003-26, s. 2003 

Revised Industrial Ecowatch System Amending Implementing 

Guidelines of DAO 98-51, Series of 1998 

(Text available at Office of the National Administrative Register, U.P. Law 

Complex, Diliman, Quezon City) 



óo0oó 

Department Administrative Order No. 2003-29 

Implementing Rules and Regulations of the National Caves and Cave 

Resources Management and Protection Act (Republic Act No. 9072) 

Pursuant to Section 11 of Republic Act No. 9072 otherwise known as the ìNational 

Caves and Cave Resources Management and Protection Actî, this Administrative Order 

setting forth the rules and regulations governing implementation of this Act is hereby 

promulgated. 

Section 1. Basic Policy. It is the policy of the State to conserve, protect and manage 

natural wealth and heritage which include caves and cave resources. Toward this end, the 

State shall strengthen the cooperation and exchange of information between government 

authorities and users of caves and cave resources for scientific, educational, recreational, 

ecotourism and other purposes. 

Section 2. Scope and Coverage. This Order shall cover caves and cave resources 

within public domain and private lands, excluding any vug, aquaduct, mine tunnel, and other 

man-made excavations. 

Section 3. Definition of Terms. For the purpose of this Order, the following terms shall 

be defined as follows: 

Ancestral domains - refer to all areas generally belonging to Indigenous Peoples comprising 

lands, inland waters, coastal areas, and natural resources under a claim of ownership, 

occupied or possessed by indigenous people, by themselves or through their ancestors,


communally or individually, since time immemorial, continuously to the present except, when 

interrupted by war, force majeure or displacement by force, deceit, stealth or as a consequence 

of government projects or any other voluntary dealings entered into by government 

and private individuals/corporation, and which are necessary to ensure their economic, 

social and cultural welfare. It shall include ancestral lands, forests, pastures, residential, 

agricultural lands, and other lands individually owned whether alienable and disposable or 

otherwise, hunting grounds, burials, worship areas, bodies of water, mineral and other natural 

resources, and lands which may no longer be exclusively occupied by indigenous peoples 

but from which they traditionally had access to for their subsistence and traditional activities, 

particularly the home ranges of indigenous peoples who are still nomadic and/or shifting 

cultivators. 

Archeology - refers to scientific study of material remains such as fossils, relics, artifacts, 

features and monuments, of past human life and activities; cultural remains 

Aqueduct - refers to a man-made channel designed to transport water over long distances 

usually by gravity; an elevated structure supporting a channel or canal passing over a river of 

low ground 

Cave - refers to any naturally occurring void, cavity, recess or system of interconnected 

passages beneath the surface of the earth or within a cliff and which is large enough to 

permit an individual to enter, whether or not the entrance, located either on private or public 

land, is naturally formed or man-made. It shall include any natural pit, sinkhole, or other 

feature which is an extension of the entrance. The term also includes cave resources therein 

but not any vug, mine tunnel, aqueduct or other man-made excavation. 

Cave resources - refer to any material or substance occurring naturally in caves, such as 

animal life, plant life, including paleontological and deposits, cultural artifacts, or products of 

human activities, sediments, minerals, speleogens and speleothems. 

Geology - refers to the science that deals with the composition and structures of the earth 

and the changes it has undergone or is undergoing including the study of life and environment 

which existed as recorded in the different rock sequences. 

Indigenous people - refers to a group of people or homogenous societies identified by selfascription 

and ascription by others, who have continuously lived as organized community on 

communally bounded and defined territory, and who have, under claims of ownership since 

time immemorial, occupied, possessed and utilized such territories, sharing common bonds 

of language, customs and traditions and other distinctive cultural traits, or who have, through 

resistance to political, social and cultural in roads of colonization, non-indigenous religions 

and cultures, became historically differentiated from the majority of Filipinos Indigenous 

peoples shall likewise include peoples who are regarded as Indigenous on account of their 

descent from the populations which inhabited the country, at the time of conquest or colonization, 

or at the inroads of non-indigenous religions and cultures, or the establishment of 

present state boundaries, who retain some or all of their own social, economic, cultural and 

political institutions, but who may have been displaced from their traditional domains or who 

may have resettled outside their ancestral domains 

Mineral resources - refers to any concentration of mineral rocks or rocks with potential 

economic value


Mining permit - refers to a permit which include exploration, quarry, sand and gravel (commercial, 

industrial and exclusive), gratuitous (government or private), guano, gemstone gathering 

and small scale mining. 

National Cave Committee - refers to the National Cave Management, Protection and Conservation 

Program Committee. 

Paleontology - refers to the science dealing with the life of past geological periods as known 

from fossil remains. 

Prospecting Permit - refers to a permit for the conduct of research, collection and/or 

utilization of cave resources for commercial purposes. 

Protected area ñ refers to portions of land and water set aside by reason of their unique 

physical and biological significance, managed to enhance biological diversity and protected 

against destructive human exploitation. 

Regional Cave Committee - refers to the Regional Cave Management, Protection and Conservation 

Program Committee. 

Secretary - refers to the Secretary of the DENR. 

Significant cave - refers to a cave, which contains materials or possesses features that have 

archeological, cultural, ecological, historical or scientific value as determined by the DENR 

in coordination with the scientific community and the academe. 

Sinkhole - refers to a depression in the land surface generally in a limestone region communicating 

with subterranean passages developed by solution. 

Speleogen - refers to relief features on the walls, ceilings and floors of any cave or lava tube 

which are part of the surrounding bedrock, including but not limited to anastomoses scallops, 

meander niches, petromorphs and rock pendants in solution caves and similar features 

unique to volcanic caves. 

Speleology - refers to a scientific study or exploration of caves. 

Speleothem - refers to any natural mineral formation or deposit occurring in a cave or lava 

tube; including but not limited to stalactite, stalagmite, helictite, cave flower, flowstone, drapery, 

rim stone or formation of clay or mud. 

Vug - refers to a small cavity in a vein or in a rock, usually lined with crystal of a different 

mineral composition from the enclosing rock. 

Section 4. Implementing Agencies. The DENR, in coordination with the Department 

of Tourism, National Museum, National Historical Institute and concerned Local Government 

Units for specific caves, shall be the lead agency tasked to implement the provisions of this 

Order. 

In the Province of Palawan, the Palawan Council for Sustainable Development (PCSD) 

shall be the lead implementing agency pursuant to Republic Act No. 7611 or the Strategic 

Environmental Plan for Palawan Act.


Pursuant to the existing laws, the DENR shall coordinate with the following agencies: 

4.1 Local Government Units (LGUs) in the management and protection of caves pursuant 

to Republic Act No. 7160 (Local Government Code of 1991) and its implementing 

rules and regulations; 

4.2 National Museum (NM) in the management and protection of caves assessed with 

cultural, paleontological and archeological values pursuant to Republic Act No. 4846 

(An Act Providing for the Protection and Preservation of Philippine Cultural Properties) 

and its implementing rules and regulations; 

4.3 National Historical Institute (NHI) in the management and protection of caves assessed 

with historical value pursuant to Presidential Decree No. 1505-78 (Amending 

Presidential Decree No. 260, as amended, by Prohibiting the Unauthorized Modification, 

Alteration, Repair and Destruction of Original Features of all National Shrines, 

Monuments, Landmarks and other Important Historical Edifices); and, 

4.4 Department of Tourism (DOT) in the promotion of caves classified for ecotourism 

and in the cave visitor management in accordance with Executive Order No. 111 (Establishing 

the Guidelines for Ecotourism Development in the Philippines) and Joint 

DENR-DOT Memorandum Circular No. 98-02 (Guidelines for Ecotourism Development 

in the Philippines). 

Section 5. Powers and Functions of the DENR. The DENR, shall implement this 

Order and shall exercise the following powers and functions: 

5.1 Conduct nationwide planning, monitoring and evaluation in the implementation of 

this Order through the Protected Areas and Wildlife Bureau (PAWB); 

5.2 Enter into a Memorandum of Agreement (MOA) with any local government unit, 

other government agencies, non-government organization, peopleís organization, academe 

and other concerned entities for the preservation, protection, development, and 

management of caves through the Secretary, PAWB Director or the Regional Executive 

Director, except in protected areas wherein the authority is vested with the Protected 

Area Management Board (PAMB); 

5.3 Coordinate/collaborate with concerned government agencies, non-government organizations, 

peopleís organizations, academe and other concerned agencies in the 

conduct of cave assessment; 

5.4 Tap the cooperation of peopleís organizations and non-government organizations as 

active partners in the conservation and protection of caves and cave resources; 

5.5 Conduct monitoring and evaluation of activities and provide technical assistance in 

the implementation of this Order through the Field Offices; 

5.6 Disseminate information and conduct educational campaign on the need to conserve, 

protect and manage caves and cave resources through the PAWB, DENR 

Regional Offices and/or other interested agencies; 

5.7 Issue permits for the collection and removal of guano and other non-biological cave 

resources outside protected areas through the Mines and GeoSciences Bureau (MGB) 

as specified in Section 14 hereof; 

5.8 Issue permits for the collection and removal of biological resources and its derivatives 

in accordance with Republic Act No. 9147 (Wildlife Resources Conservation and 

Protection Act) and other relevant rules and regulations; 

5.9 Determine, in consultation with concerned entities, the appropriate bonds and fees 

for the issuance of permits;


5.10 Call on any local government units, bureaus, agencies, state universities or colleges, 

and/or other instrumentalities of the government for assistance as the need arises in 

the discharge of its functions; and 

5.11 Exercise other powers and perform other functions as may be necessary to implement 

the provisions of Republic Act No. 9072. 

Section 6. Caves within Private Lands. Caves and cave resources are owned by the 

State. As such, landowners with caves inside their private lands shall secure the necessary 

permit from the DENR for the use, collection or removal of any cave resource found therein. 

All resource utilization outside caves within private lands, including the harvesting of 

planted trees, shall be regulated by the DENR in accordance with existing laws, rules and 

regulations to preserve the integrity of the cave. 

The private landowner may enter into a Tripartite MOA or Memorandum of Understanding 

(MOU) with the DENR and LGUs in the conservation, management and protection of 

caves and cave resources found therein. 

Section 7. Caves within Ancestral Domain/Land. Consistent with the provisions of 

Republic Act No. 8371 (Indigenous Peoples Rights Act) and its implementing rules and 

regulations, the responsibility in the management and protection of caves and cave resources 

found within ancestral domain/land rests with the concerned indigenous people. 

The conduct of research and other activities in caves within ancestral domain/lands 

shall be subject to free and prior informed consent of the concerned indigenous people. 

However, should the indigenous people decide to transfer the management responsibility 

to the DENR over these areas, said decision must be made in writing. 

Section 8. Caves under the National Integrated Protected Areas System (NIPAS). 

Establishment of caves as protected areas and their management shall follow the provisions 

of Republic Act No. 7586 (National Integrated Protected Areas System Act) and its rules and 

regulations. 

Section 9. Caves in Other Public Lands. Caves which are not within ancestral domain/land 

and protected areas shall be managed in coordination with the concerned agencies 

mentioned in Section 4 hereof. 

Section 10. Information Concerning the Nature and Location of Significant Caves. 

Information concerning the nature and specific location of a potentially significant cave shall 

not be made available to the public within one (1) year after its discovery. During this period, 

the DENR, in coordination with the DOT, NM, NHI, concerned LGUs, scientific community 

and the academe shall assess the value of the cave. Disclosure of such information maybe 

made prior to the one year period upon a written request to and approval by Secretary after 

ascertaining that said disclosure will further the purpose of RA 9072 and will not create any 

substantial risk or harm, theft or destruction on such cave. 

The written request shall contain, among others, the following: (a) description of the 

geographic site for which the information is sought; (b) explanation of the purpose for which 

the information is sought; and (c) assurance or undertaking, satisfactory to the Secretary,

1370 


that adequate measures are to be taken to protect the confidentiality of such information and 

to ensure the protection of the cave from destruction and vandalism and unauthorized use. 

The PAWB, in coordination with the DOT, NM and NHI shall prepare a list of caves 

assessed and classified, within one (1) year from the issuance of this Order. The list shall 

periodically be updated. 

Prior to the issuance of the list, clearance from the PAWB shall be secured in the 

preparation of any information materials for a particular cave to determine if the subject cave 

can be publicly known. 

Section 11. Cave Management, Protection and Conservation Program (CMPCP). 

The CMPCP shall be formulated by the DENR, through PAWB, in coordination with concerned 

agencies. The Program shall cover all present programs, projects, and initiatives of 

the Department related to and involving the management and protection of cave ecosystem 

and its resources. It shall also include joint undertakings with or in support of other government 

units and agencies, peopleís organizations and non-government organizations or international 

entities or instrumentalities. It shall also encompass all ecological support systems 

contributing to the living organisms in caves and sustainable development of its resources. 

The Program shall consist of the following components: 

1. Cave Resource Assessment - inventory and mapping of caves, classification and documentation 

of the biological, geological, hydrological, paleontological, archeological and 

historical resources and other relevant cave information. 

2. Resource Management and Utilization - regulation of consumptive and non-consumptive 

use of caves and cave resources. 

3. Visitor Management - development of caves for ecotourism and regulation of cave visitors. 

4. Conservation, Education and Public Awareness ñ promote/raise awareness, appreciation 

and understanding on the importance of and benefits from caves and cave resources 

and draw out actions for their protection and conservation. 

5. Human Resource Development - conduct trainings and workshops to improve the manpower 

capability in the implementation of cave management and conservation activities. 

6. Research and Development - development and implementation of researches/studies to 

support cave management and policy formulation. 

The Secretary shall create the National Cave Committee and Regional Cave Committees 

to be chaired by the PAWB Director and Regional Technical Director (RTD) for Protected 

Areas and Wildlife Sector/Service or its equivalent, respectively, to ensure the implementation 

of the CMPCP. The Committees shall be composed of representatives from the coordinating 

agencies, academe and non-government organizations, among others. 

Section 12. Cave Discovery and Classification. Any person or institution that discovers 

a cave/s shall report the location to the nearest DENR office. The DENR office which received 

the report shall inform the Protected Areas and Wildlife Division (PAWD). The PAWD shall 

plan the appropriate activities to be undertaken on the reported cave. 

The appropriate use of the caves shall be based on the manual on cave classification 

prepared by the DENR.


Section 13. Uses of Caves and Cave Resources. Caves may be used for scientific, 

economic, educational, ecotourism and other purposes based on the assessment and 

classification of the subject caves. The Regional Office, in consultation with the Regional 

Cave Committee, shall recommend to the Secretary, through PAWB, the allowable activities 

in caves in their respective regions. Such activities may be subject to Environmental Impact 

Statement (EIS) System and other related rules and regulations, if appropriate. 

Caves with previously issued utilization permits shall be reviewed by the Regional and/ 

or National Cave Committee to determine the appropriateness of the status and compatibility 

of existing use of the caves based on classification. 

For the collection of edible birdís nests and other cave resources, the DENR, through 

the Ecosystems Research and Development Bureau, shall set the open and close season 

including, but not limited to the quantity, quality and size limits. 

Section 14. Permits. Appropriate permits for extraction of cave resources shall be 

issued in caves open for permit application. Clearance from PAWB shall be required prior to 

the issuance of any mining permit for cave resources pursuant to Republic Act No. 7942 

(Philippine Mining Act 1995) and related rules and regulations; and, prospecting permit to be 

issued by other concerned government agencies. 

The Regional Executive Director (RED) shall issue visitor permits for caves classified 

for ecotourism. Corresponding visitor fees shall be set by the concerned RED in coordination 

with the Regional Cave Committee. 

The collection of biological cave resources shall be governed by the provisions of 

Republic Act No. 9147 (Wildlife Resources Conservation and Protection Act) and its 

implementing rules and regulations. 

The Secretary cannot issue permit for the removal of stalactites and stalagmites or any 

cave resources when it will adversely affect the value of a significant cave. 

Section 15. Treasure Hunting. The DENR, through the Mines and Geosciences Bureau 

in coordination with the PAWB, DOT, NM and NHI and the PCSD, shall formulate a policy on 

treasure hunting in caves within three months from the effectivity of this Order. 

Section 16. Deputation of Cave Protection Enforcement Officers (CPEO). The 

RED shall deputize Cave Protection Enforcement Officers from locally based non-government 

organizations, community organizations, indigenous people and other volunteers who have 

undergone necessary training for the purpose. The Philippine National Police, the Armed 

Forces of the Philippines, the National Bureau of Investigation and other law enforcement 

agencies may be designated as cave protection enforcement officers. 

The existing procedure for deputation shall be followed. The CPEOs shall be deputized 

for a period of one year and renewable thereafter depending on their performance. 

The deputized cave protection enforcement officers shall have the full authority to seize 

and arrest violators of the Act subject to existing laws, rules and regulations on arrest and 

detention.

1372 


Section 17. Administrative Confiscations and Conveyance. The Secretary or the 

concerned Regional Executive Director shall order the seizure and confiscation, in favor of 

the government, the gathered, collected, removed, possessed or sold cave resources including 

the conveyances and equipment used in violation of Section 7 of RA 9072 as reproduced in 

Section 18 of this Order. 

The procedure on the seizure, confiscation and forfeiture of cave resources and all 

implements used in violation of RA 9072 shall be governed by relevant existing rules and 

regulations, such as but not limited to Section 4, Article 5 of Department Administrative Order 

No. 32-97 (Administrative Adjudication of Illegal Forest Products and the Machinery, 

Equipment, Tools and Conveyances Used in Connection Therewith) and Department 

Administrative Order No. 36-91 (Guidelines Governing the Confiscation, Seizure and Disposition 

of Wild Flora and Fauna Illegally Collected, Gathered, Acquired, Transported and Imported 

including Paraphernalia), whenever applicable. 

Section 18. Prohibited Acts. The following shall be considered prohibited acts: 

18.1 Knowingly destroying, disturbing, defacing, marring, altering, removing or harming the 

speleogen or speleothem of any cave or altering the free movement of any animal or 

plant life in or out of any cave; 

18.2 Gathering, collecting, possessing, consuming, selling, bartering or exchanging or offering 

for sale without authority of any cave resource; and, 

18.3 Counseling, procuring, soliciting or employing any other person to violate any provision 

of this Section. 

Section 19. Penalties. Any person found guilty of any of the offenses enumerated 

under Section 18, shall be punished by imprisonment from two (2) years to six (6) years or a 

fine ranging from Twenty Thousand Pesos (P20,000.00) to Five Hundred Thousand Pesos 

(P500,000.00) or both at the discretion of the court. 

Provided, that the person furnishing the capital to accomplish the acts punishable shall 

be punished by imprisonment from six (6) years and one (1) day to eight (8) years or by a 

fine ranging from Five Hundred Thousand Pesos (P500,000.00) to One Million Pesos 

(P1,000,000.00) or both at the discretion of the Court. 

Provided further, that if the area requires rehabilitation and/or restoration as determined 

by the Court, the offender shall also be required to restore the same, whenever practical, or 

compensate for the damage. 

Provided, finally, that if the offender is a government employee, he or shall likewise be 

removed from the Office. 

Section 20. Fees. Any money collected by the DENR as permit fees for collection and 

removal of cave resources, such as guano and birdís nest; as a result of the forfeiture of a 

bond or other security by a permittee who does not comply with the requirements of the 

permit issued; or by way of fines for violations of this Order, shall be remitted to the National 

Treasury. 

All fees collected in caves within protected areas shall accrue to the Integrated Protected 

Area Fund pursuant to Republic Act No. 7586.


All fees and charges shall be reviewed and updated periodically. 

Section 21. Bond. To answer for and guarantee payments for whatever actual damages 

that may be incurred by the permittee during and after the operation/undertaking, a 

bond shall be posted by the applicants, except for those applying for the Gratuitous Permit, 

as determined by the Secretary through the PAWB. 

Section 22. Appropriations. The PAWB, DENR-Regional Offices and concerned agencies 

shall include in their General Appropriations Act, funds for the implementation of this 

Order. 

Section 23. Transitory Provisions. All existing contracts, permits, and other forms of 

tenurial arrangements entered into, by and between the DENR and other concerned agencies/persons 

shall be reviewed. The Secretary shall decide whether these agreements warrant 

amendment; in which case, the Parties shall enter into a new agreement to conform with 

the provisions of this Order. 

Section 24. Repealing Clause. This Order amends Department Administrative Order 

No. 4, Series of 1994 (Establishing the Cave and Conservation Program and Providing 

Funds Thereof) and all other issuances inconsistent herewith. 

Section 25. Effectivity. This Order shall take effect fifteen (15) days after its publication 

in a newspaper of general circulation. 




Secretary 

óo0oó 


Implementing Rules and Regulations (IRR) for the Philippine 

Environmental Impact Statement (EIS) System 

Consistent with the continuing effort of the Department of Environment and Natural 

Resources (DENR) to rationalize and streamline the implementation of the Philippine 

Environmental Impact Statement (EIS) System established under Presidential Decree (PD) 

No. 1586, Presidential Proclamation No. 2146 defining the scope of the EIS System and 

pursuant to Administrative Order No. 42 issued by the Office of the President on November 

2, 2002, the following rules and regulations are hereby promulgated; 

Article I 

Basic Policy, Operating Principles, Objectives and Definition of Terms 

Section 1. Basic Policy and Operating Principles. Consistent with the principles of 

sustainable development, it is the policy of the DENR to implement a systems-oriented and

1374 


integrated approach to the EIS system to ensure a rational balance between socio-economic 

development and environmental protection for the benefit of present and future generations. 

The following are the key operating principles in the implementation of the Philippine 

EIS System: 

a. The EIS System is concerned primarily with assessing the direct and indirect impacts of 

a project on the biophysical and human environment and ensuring that these impacts are 

addressed by appropriate environmental protection and enhancement measures. 

b. The EIS System aids proponents in incorporating environmental considerations in planning 

their projects as well as in determining the environmentís impact on their project. 

c. Project proponents are responsible for determining and disclosing all relevant information 

necessary for a methodical assessment of the environmental impacts of their projects; 

d. The review of the EIS by EMB shall be guided by three general criteria: (1) that environmental 

considerations are integrated into the overall project planning, (2) that the assessment 

is technically sound and proposed environmental mitigation measures are effective, 

and (3) that social acceptability is based on informed public participation; 

e. Effective regulatory review of the EIS depends largely on timely, full, and accurate disclosure 

of relevant information by project proponents and other stakeholders in the EIA 

process; 

f. The social acceptability of a project is a result of meaningful public participation, which 

shall be assessed as part of the Environmental Compliance Certificate (ECC) application, 

based on concerns related to the projectís environmental impacts; 

g. The timelines prescribed by this Order, within which an Environmental Compliance Certificate 

must be issued or denied, apply only to processes and actions within the Environmental 

Management Bureauís (EMB) control and do not include actions or activities that 

are the responsibility of the proponent. 

Section 2. Objectives. The objective of this Administrative Order is to rationalize and 

streamline the EIS System to make it more effective as a project planning and management 

tool by: 

a. Making the System more responsive to the demands and needs of the project proponents 

and the various stakeholders; 

b. Clarifying the coverage of the System, and updating it to take into consideration industrial 

and technological innovations and trends; 

c. Standardizing requirements to ensure focus on critical environment parameters; 

d. Simplifying procedures for processing ECC applications, and establishing measures to 

ensure adherence to ECC conditions by project proponents, and 

e. Assuring that critical environmental concerns are addressed during project development 

and implementation. 

Section 3. Definition of Terms. For the purpose of this Order, the following definitions 

shall be applied: 

a. Certificate of Non-Coverage ñ a certification issued by the EMB certifying that, based 

on the submitted project description, the project is not covered by the EIS System and is 

not required to secure an ECC.


b. Co-located projects/undertakings ñ projects, or series of similar projects or a project 

subdivided to several phases and/or stages by the same proponent, located in contiguous 

areas. 

c. Environment ñ Surrounding air, water (both ground and surface), land, flora, fauna, 

humans and their interrelations. 

d. Environmental Compliance Certificate (ECC) ñ document issued by the DENR/EMB 

after a positive review of an ECC application, certifying that based on the representations 

of the proponent, the proposed project or undertaking will not cause significant negative 

environmental impact. The ECC also certifies that the proponent has complied with all the 

requirements of the EIS System and has committed to implement its approved Environmental 

Management Plan. The ECC contains specific measures and conditions that the 

project proponent has to undertake before and during the operation of a project, and in 

some cases, during the projectís abandonment phase to mitigate identified environmental 

impacts. 

e. Environmentally Critical Area (ECA) ñ area delineated as environmentally sensitive 

such that significant environmental impacts are expected if certain types of proposed 

projects or programs are located, developed or implemented in it. 

f. Environmentally Critical Project (ECP) ñ project or program that has high potential for 

significant negative environmental impact. 

g. Environmental Guarantee Fund (EGF) ñ fund to be set up by a project proponent 

which shall be readily accessible and disbursable for the immediate clean-up or rehabilitation 

of areas affected by damages in the environment and the resulting deterioration of 

environmental quality as a direct consequence of a projectís construction, operation or 

abandonment. It shall likewise be used to compensate parties and communities affected 

by the negative impacts of the project, and to fund community-based environment related 

projects including, but not limited to, information and education and emergency preparedness 

programs. 

h. Environmental Impact Assessment (EIA) ñ process that involves evaluating and predicting 

the likely impacts of a project (including cumulative impacts) on the environment 

during construction, commissioning, operation and abandonment. It also includes designing 

appropriate preventive, mitigating and enhancement measures addressing these consequences 

to protect the environment and the communityís welfare. The process is undertaken 

by, among others, the project proponent and/or EIA Consultant, EMB, a Review 

Committee, affected communities and other stakeholders. 

i. Environmental Impact Assessment Consultant ñ a professional or group of professionals 

commissioned by the proponent to prepare the EIS/IEE and other related documents. 

In some cases, the person or group referred to may be the proponentís technical 

staff. 

j. Environmental Impact Assessment Review Committee (EIARC) ñ a body of independent 

technical experts and professionals of known probity from various fields organized 

by the EMB to evaluate the EIS and other related documents and to make appropriate 

recommendations regarding the issuance or non-issuance of an ECC. 

k. Environmental Impact Statement (EIS) ñ document, prepared and submitted by the 

project proponent and/or EIA Consultant that serves as an application for an ECC. It is a 

comprehensive study of the significant impacts of a project on the environment. It includes 

an Environmental Management Plan/Program that the proponent will fund and 

implement to protect the environment. 

l. Environmental Management Plan/Program (EMP) ñ a section in the EIS that details 

the prevention, mitigation, compensation, contingency and monitoring measures to en-

1376 


hance positive impacts and minimize negative impacts and risks of a proposed project or 

undertaking. For operating projects, the EMP can also be derived from an EMS. 

m. Environmental Management Systems (EMS) ñ refers to the EMB PEPP EMS as provided 

for under DAO 2003-14, which is a part of the overall management system of a 

project or organization that includes environmental policy, organizational structure, planning 

activities, responsibilities, practices, procedures, processes and resources for developing, 

implementing, achieving, reviewing and maintaining an improved overall environmental 

performance. 

n. Environmental Monitoring Fund (EMF) ñ fund that a proponent shall set up after an 

ECC is issued for its project or undertaking, to be used to support the activities of the 

multi-partite monitoring team. It shall be immediately accessible and easily disbursable. 

o. Environmental Performance ñ capability of proponents to mitigate environmental impacts 

of projects or programs. 

p. Environmental Performance Report and Management Plan (EPRMP) ñ documentation 

of the actual cumulative environmental impacts and effectiveness of current measures 

for single projects that are already operating but without ECCs, i.e., Category A-3. For 

Category B-3 projects, a checklist form of the EPRMP would suffice. 

q. Environmental Risk Assessment (ERA) ñ assessment, through the use of universally 

accepted and scientific methods, of risks associated with a project. It focuses on determining 

the probability of occurrence of accidents and their magnitude (e.g. failure of 

containment or exposure to hazardous materials or situations). 

r. EMS-based EMP ñ environmental management plan based on environmental management 

system (EMS) standard as defined in the DAO 2003-14. 

s. Initial Environmental Examination (IEE) Report ñ document similar to an EIS, but with 

reduced details and depth of assessment and discussion. 

t. Initial Environmental Examination (IEE) Checklist Report ñ simplified checklist version 

of an IEE Report prescribed by the DENR to be filled up by a project proponent to 

identify and assess a projectís environmental impacts and the mitigation/enhancement 

measures to address such impacts. 

u. Multipartite Monitoring Team (MMT) ñ community-based multi-sectoral team organized 

for the purpose of monitoring the proponentís compliance with ECC conditions, EMP and 

applicable laws, rules and regulations. 

v. Programmatic Environmental Impact Statement (PEIS) ñ a documentation of comprehensive 

studies on environmental baseline conditions of a contiguous area. It also 

includes an assessment of the carrying capacity of the area to absorb impacts from colocated 

projects such as those in industrial estates or economic zones (ecozones). 

w. Programmatic Environmental Performance Report and Management Plan (PEPRMP) 

ñ documentation of actual cumulative environmental impacts of co-located projects with 

proposals for expansion. The PEPRMP should also describe the effectiveness of current 

environmental mitigation measures and plans for performance improvement. 

x. Project Description (PD) ñ document, which may also be a chapter in an EIS, that 

describes the nature, configuration, use of raw materials and natural resources, production 

system, waste or pollution generation and control and the activities of a proposed 

project. It includes a description of the use of human resources as well as activity timelines, 

during the pre-construction, construction, operation and abandonment phases. It is to be 

used for reviewing co-located and single projects under Category C, as well as for Category 

D projects. 

y. Project or Undertaking ñ any activity, regardless of scale or magnitude, which may 

have significant impact on the environment.


z. Proponent ñ any natural or juridical person intending to implement a project or undertaking. 

aa. Public Participation ñ open, transparent, gender sensitive, and community-based 

process aimed at ensuring the social acceptability of a project or undertaking, involving 

the broadest range of stakeholders, commencing at the earliest possible stage of project 

design and development and continuing until post-assessment monitoring. 

bb. Procedural Review ñ phase in the ECC application review process to check for the 

completeness the required documents, conducted by the EIAM Division at the EMB Central 

Office or Regional Office. 

cc. Process Industry ñ industry whose project operation stage involves chemical, mechanical 

or other processes. 

dd. Scoping ñ the stage in the EIS System where information and project impact assessment 

requirements are established to provide the proponent and the stakeholders the 

scope of work and terms of reference for the EIS. 

ee. Secretary ñ the Secretary of the DENR. 

ff. Social Acceptability ñ acceptability of a project by affected communities based on 

timely and informed participation in the EIA process particularly with regard to environmental 

impacts that are of concern to them. 

gg. Stakeholders ñ entities who may be directly and significantly affected by the project 

or undertaking. 

hh. Substantive Review ñ phase in the EIA process whereby the document submitted is 

subjected to technical evaluation by the EIARC. 

ii. Technology ñ all the knowledge, products, processes, tools, methods and systems 

employed in the creation of goods or providing services. 

Article II 

ECC Application Processing and Approval Procedures 

Section 4. Scope of the EIS System 

4.1 In general, only projects that pose potential significant impact to the environment shall 

be required to secure ECCís. In coordination with the Department of Trade and Industry 

(DTI) and other concerned government agencies, the EMB is authorized to update or 

make appropriate revisions to the technical guidelines for EIS System implementation. 

4.2 The issuance of ECC or CNC for a project under the EIS System does not exempt the 

proponent from securing other government permits and clearances as required by other 

laws. 

In determining the scope of the EIS System, two factors are considered: (i) the nature of 

the project and its potential to cause significant negative environmental impacts, and (ii) 

the sensitivity or vulnerability of environmental resources in the project area. 

4.3 The specific criteria for determining projects or undertakings to be covered by the EIS 

System are as follows: 

a. Characteristics of the project or undertaking 

ï Size of the project 

ï Cumulative nature of impacts vis-‡-vis other projects

1378 


ï Use of natural resources 

ï Generation of waste and environment-related nuisance 

ï Environment-related hazards and risk of accidents 

b. Location of the project 

ï Vulnerability of the project area to disturbances due to its ecological importance, 

endangered or protected status 

ï Conformity of the proposed project to existing land use, based on approved zoning 

or on national laws and regulations 

ï Relative abundance, quality and regenerative capacity of natural resources in 

the area, including the impact absorptive capacity of the environment 

c. Nature of the potential impact 

ï Geographic extent of the impact and size of affected population 

ï Magnitude and complexity of the impact 

ï Likelihood, duration, frequency, and reversibility of the impact 

The following are the categories of projects/undertakings under the EIS System: 

Category A. Environmentally Critical Projects (ECPs) with significant potential to cause 

negative environmental impacts 

Category B. Projects that are not categorized as ECPs, but which may cause negative 

environmental impacts because they are located in Environmentally Critical 

Areas (ECAís) 

Category C. Projects intended to directly enhance environmental quality or address 

existing environmental problems not falling under Category A or B. 

Category D. Projects unlikely to cause adverse environmental impacts. 

4.4 Proponents of co-located or single projects that fall under Categories A and B are 

required to secure ECC. For co-located projects, the proponent has the option to secure 

a Programmatic ECC. For ecozones, ECC application may be programmatic based on 

submission of a programmatic EIS, or locator-specific based on submission of project 

EIS by each locator. 

4.5 Projects under Category C are required to submit Project Description. 

4.6 Projects classified under Category D may secure a CNC. The EMB-DENR, however, 

may require such projects or undertakings to provide additional environmental safeguards 

as it may deem necessary. 

4.7 Projects/undertakings introducing new technologies or construction technique but which 

may cause significant negative environmental impacts shall be required to submit a Project 

Description which will be used as basis by EMB for screening the project and determining 

its category.


Section 5. Requirements for Securing Environmental Compliance Certificate (ECC) 

and Certificate of Non-Coverage (CNC) 

5.1 Documentary Requirements for Proponents. ECC processing requirements shall 

focus on information needed to assess critical environmental impacts of projects. Processing 

requirements shall be customized based on the project categories. 

The following is a summary of the required documents, the processing, endorsing and 

deciding authorities for ECC/CNC applications and timeframe for each project category: 

(Text available at Office of the National Administrative Register, U.P. Law Center, Diliman, 

Quezon City) 

The total maximum processing time reckons from the acceptance of the ECC/CNC 

application for substantive review up to the issuance of the decision. 

5.2 Forms and Contents of EIA Study Reports and Other Documents Required 

Under the EIS System. The following are the different forms of EIA study reports and 

documents required under the EIS System. DENR employees are prohibited from taking 

part in the preparation of such documents. 

The DENR/EMB shall limit to a maximum of two (2) official requests (in writing) to the 

project proponent for additional information, which shall be made within the first 75% of the 

processing timeframe shown in Section 5.1.1. 

5.2.1 Environmental Impact Statement (EIS). The EIS should contain at least the following: 

a. EIS Executive Summary; 

b. Project Description; 

c. Matrix of the scoping agreement identifying critical issues and concerns, as 

validated by EMB; 

d. Baseline environmental conditions focusing on the sectors (and resources) most 

significantly affected by the proposed action; 

e. Impact assessment focused on significant environmental impacts (in relation to 

project construction/commissioning, operation and decommissioning), taking into 

account cumulative impacts; 

f. Environmental Risk Assessment if determined by EMB as necessary during 

scoping; 

g. Environmental Management Program/Plan; 

h. Supporting documents, including technical/socio-economic data used/generated; 

certificate of zoning viability and municipal land use plan; and proof of consultation 

with stakeholders; 

i. Proposals for Environmental Monitoring and Guarantee Funds including justification 

of amount, when required; 

j. Accountability statement of EIA consultants and the project proponent; and 

k. Other clearances and documents that may be determined and agreed upon during 

scoping. 

5.2.2 Initial Environmental Examination (IEE) Report. IEE Report is similar to an EIS, 

but with reduced details of data and depth of assessment and discussion.


It may be customized for different types of projects under Category B. The EMB shall 

coordinate with relevant government agencies and the private sector to customize and 

update IEE Checklists to further streamline ECC processing, especially for small and 

medium enterprises. 

5.2.3 Programmatic Environmental Impact Statement (PEIS). The PEIS shall contain 


a. Executive Summary; 

b. Project Description 

c. Summary matrix of scoping agreements as validated by EMB; 

d. Eco-profiling of air, land, water, and relevant people aspects; 

e. Environmental carrying capacity analysis; 

f. Environmental Risk Assessment (if found necessary during scoping); 

g. Environmental Management Plan to include allocation scheme for discharge of 

pollutants; criteria for acceptance of locators, environmental management guidebook 

for locators, and environmental liability scheme; 

h. Duties of the Environmental Management Unit to be created; 

i. Proposals for Environmental Monitoring & Guarantee Funds and terms of reference 

for the Multi-partite Monitoring Team, and 

j. Other supporting documents and clearances that may be agreed during the 

scoping. 

5.2.4 Programmatic Environmental Performance Report and Management Plan 

(PEPRMP). The PEPRMP shall contain the following: 

a. Project Description of the co-located projects; 

b. Documentation of the actual environmental performance based on current/past 

environmental management measures implemented, and 

c. An EMP based on an environmental management system framework and standard 

set by EMB. 

5.2.5 Environmental Performance Report and Management Plan (EPRMP). The 

EPRMP shall contain the following: 

a. Project Description; 

b. Baseline conditions for critical environmental parameters; 

c. Documentation of the environmental performance based on the current/past environmental 

management measures implemented; 

d. Detailed comparative description of the proposed project expansion and/or process 

modification with corresponding material and energy balances in the case of 

process industries, and 

e. EMP based on an environmental management system framework and standard 

set by EMB. 

5.2.6 Project Description (PD). The PD shall be guided by the definition of terms and 

shall contain the following: 

a. Description of the project; 

b. Location and area covered;


c. Capitalization and manpower requirement; 

d. For process industries, a listing of raw materials to be used, description of the 

process or manufacturing technology, type and volume of products and discharges: 

e. For Category C projects, a detailed description on how environmental efficiency 

and overall performance improvement will be attained, or how an existing environmental 

problem will be effectively solved or mitigated by the project, and 

f. A detailed location map of the impacted site showing relevant features (e.g. slope, 

topography, human settlements). 

g. Timelines for construction and commissioning 

5.2.7 EMS-based EMP. The EMS-based EMP is an option that proponents may undertake 

in lieu of the EPRMP for single projects applying for ECC under Category A-3 and B- 

3. 

5.3 Public Hearing/ Consultation Requirements. For projects under Category A-1, 

the conduct of public hearing as part of the EIS review is mandatory unless otherwise 

determined by EMB. For all other undertakings, a public hearing is not mandatory unless 

specifically required by EMB. 

Proponents should initiate public consultations early in order to ensure that environmentally 

relevant concerns of stakeholders are taken into consideration in the EIA study and 

the formulation of the management plan. All public consultations and public hearings conducted 

during the EIA process are to be documented. The public hearing/consultation process 

report shall be validated by the EMB/EMB RD and shall constitute part of the records of 

the EIA process. 

5.4 Documentation Requirements for DENR-EMB and EIA Reviewers. The EMB 

Central Office as well as the EMB Regional Offices shall document the proceedings of the 

ECC application process and shall set up and maintain relevant information management 

systems. The documentation shall, at a minimum, include the following: 

5.4.1 Review Process Report. This is to be prepared by the EMB Central or EMB 

RO. It is to be forwarded to the DENR Secretary or RD as reference for decision-making 

and maintained as part of the records on the ECC application. The report should contain 

at least the following: 

a. Summary of the environmental impacts of the undertaking, along with the proposed 

mitigation and enhancement measures; 

b. Key issues/concerns and the proponentís response to these; 

c. Documentation of compliance with procedural requirements; 

d. Acceptability of proposed EMP including the corresponding cost of mitigation, 

EGF and EMF if required; 

e. Key bases for the decision on the ECC application. 

5.4.2 EIARC Report. This report, to be prepared by the EIA Review Committee, forms 

part of the EIS review documentation. The EIARC Report shall be written by the designated 

member of the EIARC and signed by all the members within five days after the final 

review meeting. If an EIARC member dissents, he or she must submit a memorandum to 

the EMB Director through the EIARC Chairman his or her reasons for dissenting.


At a minimum the EIARC report should contain: 

a. Detailed assessment of the proposed mitigation and enhancement measures for 

the identified environmental impacts and risks; 

b. Description of residual or unavoidable environmental impacts despite proposed 

mitigation measures; 

c. Documentation of compliance with technical/substantive review criteria; 

d. Key issues/concerns and the proponentís response to these, including social 

acceptability measures; 

e. Assessment of the proposed EMP (including risk reduction/management plan) 

and amounts proposed for the Environmental Guarantee Fund and the Environmental 

Monitoring Fund, and 

f. Recommended decision regarding the ECC application as well as proposed ECC 

conditions. 

5.4.3 Decision Document. This is an official letter regarding the decision on the application. 

It may be in the form of an Environmental Compliance Certificate or a Denial Letter. 

The ECC shall contain the scope and limitations of the approved activities, as well as 

conditions to ensure compliance with the Environmental Management Plan. The ECC shall 

also specify the setting up of an EMF and EGF, if applicable. No ECC shall be released 

until the proponent has settled all liabilities, fines and other obligations with DENR. 

A Denial Letter on the other hand shall specify the bases for the decision. 

The ECC or Denial Letter shall be issued directly to the project proponent or its duly 

authorized representative, and receipt of the letter shall be properly documented. 

The ECC of a project not implemented within five years from its date of issuance is 

deemed expired. The Proponent shall have to apply for a new ECC if it intends to pursue 

the project. The reckoning date of project implementation is the date of ground breaking, 

based on the proponentís work plan as submitted to the EMB. 

Section 6. Appeal. Any party aggrieved by the final decision on the ECC / CNC 

applications may, within 15 days from receipt of such decision, file an appeal on the following 

grounds: 

a. Grave abuse of discretion on the part of the deciding authority, or 

b. Serious errors in the review findings. 

The DENR may adopt alternative conflict/dispute resolution procedures as a means to 

settle grievances between proponents and aggrieved parties to avert unnecessary legal action. 

Frivolous appeals shall not be countenanced. 

The proponent or any stakeholder may file an appeal to the following: 

Deciding Authority Where to file the appeal 

EMB Regional Office Director Office of the EMB Director 

EMB Central Office Director Office of the DENR Secretary


DENR Secretary Office of the President 

Section 7. The EIA Process in Relation to the Project Planning Cycle. Proponents 

are directed under AO 42 to conduct simultaneously the environmental impact study and the 

project planning or feasibility study. EMB may validate whether or not the EIS was integrated 

with project planning by requiring relevant documentary proofs, such as the terms of reference 

for the feasibility study and copies of the feasibility study report. 

The EMB shall study the potential application of EIA to policy-based undertakings as a 

further step toward integrating and streamlining the EIS system. 

Section 8. EIS System Procedures 

8.1 Manual of Procedures 

8.1.1 The procedures to enable the processing of ECC/CNC applications within the 

timeframes specified in AO 42 shall be prescribed in a Procedural Manual to be 

issued by the EMB Central Office within ninety (90) days from the date of this 

Order. 

8.1.2 The Manual of Procedures shall be updated as the need arises to continually shorten 

the review and approval/denial timeframes where feasible. Formulation of said 

procedures shall conform to the following guidelines. 

8.2 Processing Timeframe 

8.2.1 If no decision is made within the specified timeframe, the ECC/CNC application is 

deemed automatically approved and the approving authority shall issue the ECC or 

CNC within five (5) working days after the prescribed processing timeframe has 

lapsed. However, the EMB may deny issuance of ECC if the proponent fails to 

submit required additional information critical to deciding on the ECC/CNC application, 

despite written request from EMB and despite an adequate period for the 

proponent to comply with the said requirement; 

8.2.2 In cases where ECC issuance cannot be decided due to the proponentís inability to 

submit required additional information within the prescribed period, the EMB shall 

return the application to the proponent. The project proponent may resubmit its 

application, including the required additional information, within one (1) year for 

Category A projects and six (6) months for Category B projects without having to 

pay processing and other fees. Otherwise, the matter shall be treated as a new 

application. 

8.2.3 In cases where EMB and the project proponent have exhausted all reasonable efforts 

to generate the information needed for deciding on the ECC/CNC application, 

the responsible authority (Secretary or EMB Director/Regional Director) shall 

make a decision based on the available information so as to comply with the 

prescribed timeframe. The decision shall nonetheless reflect a thorough assessment 

of impacts taking into consideration (i) the significance of environmental 

impacts and risks; (ii) the carrying capacity of the environment; (iii) equity issues


with respect to use of natural resources, (iv) and the proponentís commitment to 

institute effective environmental management measures. 

8.3 Amending an ECC. Requirements for processing ECC amendments shall depend 

on the nature of the request but shall be focused on the information necessary to assess the 

environmental impact of such changes. 

8.3.1 Requests for minor changes to ECCs such as extension of deadlines for submission 

of post-ECC requirements shall be decided upon by the endorsing authority. 

8.3.2 Requests for major changes to ECCs shall be decided upon by the deciding authority. 

8.3.3 For ECCís issued pursuant to an IEE or IEE checklist, the processing of the amendment 

application shall not exceed thirty (30) working days; and for ECCís issued 

pursuant to an EIS, the processing shall not exceed sixty (60) working days. 

Provisions on automatic approval related to prescribed timeframes under AO 42 

shall also apply for the processing of applications to amend ECCís. 

Section 9. Monitoring of Projects with ECCs. Post ECC monitoring of projects shall 

follow these guidelines. Other details on requirements for monitoring of projects with ECCís 

shall be stipulated in a procedural manual to be formulated by EMB. 

9.1 Multipartite Monitoring Team. For projects under Category A, a multi-partite monitoring 

team (MMT) shall be formed immediately after the issuance of an ECC. Proponents 

required to establish an MMT shall put up an Environmental Monitoring Fund (EMF) not later 

than the initial construction phase of the project. 

The MMT shall be composed of representatives of the proponent and of stakeholder 

groups, including representatives from concerned LGUís, locally accredited NGOs/POs, the 

community, concerned EMB Regional Office, relevant government agencies, and other sectors 

that may be identified during the negotiations. The team shall be tasked to undertake monitoring 

of compliance with ECC conditions as well as the EMP. The MMT shall submit a semi-annual 

monitoring report within January and July of each year. 

The EMB shall formulate guidelines for operationalizing area-based or cluster-based 

MMT. The Bureau may also develop guidelines for delegating monitoring responsibilities to 

other relevant government agencies as may be deemed necessary. 

For projects whose significant environmental impacts do not persist after the construction 

phase or whose impacts could be addressed through other regulatory means or through the 

mandates of other government agencies, the operations of MMT may be terminated immediately 

after construction or after a reasonable period during implementation. 

9.2 Self-monitoring and Third Party Audit. The proponent shall also conduct regular 

self-monitoring of specific parameters indicated in the EMP through its environmental unit. 

The proponentís environmental unit shall submit a semi-annual monitoring report within January 

and July of each year. 

For projects with ECCs issued based on a PEPRMP, EPRMP, or an EMS-based EMP, 

a third party audit may be undertaken by a qualified environmental or EMS auditor upon the


initiative of the proponent and in lieu of forming an MMT. The said proponent shall submit to 

EMB a copy of the audit findings and shall be held accountable for the veracity of the report. 

The EMB may opt to validate the said report. 

9.3 Environment Guarantee Fund. An Environmental Guarantee Fund (EGF) shall be 

established for all co-located or single projects that have been determined by DENR to pose 

a significant public risk or where the project requires rehabilitation or restoration. An EGF 

Committee shall be formed to manage the fund. It shall be composed of representatives from 

the EMB Central Office, EMB Regional Office, affected communities, concerned LGUís, and 

relevant government agencies identified by EMB. 

An integrated MOA on the MMT-EMF-EGF shall be entered into among the EMB Central 

Office, EMB Regional Office, the proponent, and representatives of concerned stakeholders. 

9.4 Abandonment. For projects that shall no longer be pursued, the proponent should 

inform EMB to relieve the former from the requirement for continued compliance with the 

ECC conditions. For projects that have already commenced implementation, an abandonment/decommissioning 

plan shall be submitted for approval by EMB at least six (6) months 

before the planned abandonment/decommissioning. The implementation of the plan shall be 

verified by EMB. 

Article III 

Strengthening the Implementation of the Philippine EIS System 

Section 10. Coordination with other Government Agencies and other 

Organizations. The DENR-EMB shall conduct regular consultations with DTI and other 

pertinent government agencies, affected industry groups and other stakeholders on continually 

streamlining the processing of ECC applications and post ECC implementation to fulfill the 

policy and objectives of this administrative order. 

The President shall be apprised of the issues raised as well as the actions taken by 

DENR to address these issues whenever necessary. 

Section 11. Information Systems Improvement. The information system on the EIS 

System implementation shall be improved for the effective dissemination of information to the 

public. The information system shall include regular updating of the status of ECC applications 

through a website and through other means. 

Section 12. Accreditation System. To enhance the quality of the EIS submitted to the 

DENR/EMB, the EMB shall establish an accreditation system for individual professionals, 

academic and professional organizations that can be tapped to train professionals in 

conducting EIA using training modules approved by EMB. 

The EMB shall also work with DTI-BPS for an accreditation system for environmental 

and EMS auditors, consistent with the provisions of DAO 2003-14 on the Philippine 

Environmental Partnership Program. 

Section 13. Creation of an EIAM Division and Strengthening of Review and Monitoring 

Capability. In order to effectively implement the provisions of this administrative


order, the current EIA ad hoc division at the EMB Central Office and the EMB Regional 

Offices that are primarily in-charge of processing ECC applications and post-ECC monitoring 

shall be converted to a full-pledged Environmental Impact Assessment and Management 

Division (EIAMD). The Division shall have the following structure and functions: 

13.1 The EIA Evaluation Section shall be in charge of screening projects for coverage 

under the EIS System, EIS Scoping, and evaluation of EISís and IEEís submitted for 

ECC issuance. It shall have three units responsible, respectively, for screening for 

coverage, EIS Scoping, and evaluation of ECC applications. The EMB may commission 

independent professionals, experts from the academe and representatives from 

relevant government agencies as members of the EIA Review Committee as may be 

deemed necessary. Further, continual improvement of the technical capability of the 

Staff of the EIA Division shall be undertaken. 

13.2 The Impact Monitoring and Validation Section shall be in charge of monitoring compliance 

to ECC conditions and implementation of the Environmental Management Program 

(EMP). The unit shall also validate actual impacts as a basis for evaluating environmental 

performance and effectiveness of the EMP. 

13.3 In the EMB Central Office, there shall be a Systems Planning and Management Section. 

It shall ensure that a continually improving systems-oriented and integrated approach 

is followed in implementing the Philippine EIS System vis-a-vis national development 

programs. The section shall have two units responsible for specific systemslevel 

concerns: (1) Project Level Systems Planning and Management Unit; and (2) 

Program and Policy Level Systems Planning and Management Unit. This section shall 

also be responsible for technical coordination with the EIA Division in the different 

EMB Regional Offices. 

The organizational structure of the EMB Central Office is in Annex 1 (Text Available at 

ONAR, U.P. Law Center). 

Article IV 


Section 14. Budget Allocation. For the effective implementation of this order, adequate 

funding should be provided under the annual General Appropriations Act. 

Per AO 42, the new position items for the EIA Division shall be created out of the 

existing budget and vacant position items within the government service, which shall be 

reclassified accordingly. 

Section 15. Fees. All proponents, upon submission of the IEE/EIS and application for 

amendment, shall pay filing fees and other charges in accordance with prescribed standard 

costs and fees set by EMB in relation to the implementation of the Philippine EIS System, as 

shown in Annex 2. 

The proponent shall shoulder the cost of reviewing the EIS. 

Section 16. Fines, Penalties and Sanctions. The EMB Central Office or Regional 

Office Directors shall impose penalties upon persons or entities found violating provisions of 

P.D. 1586, and its Implementing Rules and Regulations. Details of the Fines and Penalty 

Structure shall be covered by a separate order.


The EMB Director or the EMB-RD may issue a Cease and Desist Order (CDO) based 

on violations under the Philippine EIS System to prevent grave or irreparable damage to the 

environment. Such CDO shall be effective immediately. An appeal or any motion seeking to 

lift the CDO shall not stay its effectivity. However, the DENR shall act on such appeal or 

motion within ten (10) working days from filing. 

The EMB may publish the identities of firms that are in violation of the EIA Law and its 

Implementing Rules and Regulations despite repeated Notices of Violation and/or Cease and 

Desist Orders. 

Section 17. Transitory Provisions. The DENR may extend reprieve to proponents of 

projects operating without ECC (Categories A-3 and B-3) from penalties specified in PD 

1586 upon registration with the EMB Central Office. An Environmental Performance Report 

and Management Plan (EPRMP) shall be submitted as a requirement for such ECC application 

within six months from the signing of this Administrative Order. 

During the period that the Procedural Manual and other necessary guidelines are 

being prepared, existing guidelines which are consistent with the provisions of this Order 

shall remain in effect. Adequate resources shall be provided for the formulation of the 

Procedural Manual and for the effective implementation of this Order. 

Section 18. Repealing Clause. This Order hereby supersedes Department Administrative 

Order No. 96-37, Department Administrative Order No. 2000-37, DAO 2000-05 and 

other related orders, which are inconsistent herewith. 

Section 19. Effectivity. This Order shall take effect 15 days after its publication in a 

newspaper of general circulation. 


A. Application for ECC 


Secretary 

Schedule of Fees 

ANNEX 2 

Fees and Other Charges 

(in Philippine Pesos/Non-refundable) 

1. Category A-1 (Co-located Projects) PhP 10,000.00 

Procedural Screening Fee 1,500.00 

Database Management Fee 3,000.00 

Processing Fee 5,500.00


2. Category A-1 (Single Project), Category A-2 

and A-3 (Co-located Project) 6,000.00 

Procedural Screening Fee 600.00 


Processing Fee 3,400.00 

3. Category A-2, A-3 and B- 1 (Single Project); 

B-2 and B-3 (Co-located Projects) 4,000.00 




4. Category B-2 and B-3 (Single Projects) 3,000.00 




B. Certification of Non-Coverage 

1. Category D 100.00 

2. Category C 600.00 

C. Post ECC Processing Services 

1. Request for minor ECC Amendment 

(Article III Section 8.3) 300.00 / condition 

2. Request for major ECC Amendment 

(Article III Section 8.3) 1,200.00 /condition 

D. Other Services 

1. Request for miscellaneous certifications 50.00 /certification 

2. Request for Certified True/Photocopy 25.00 /document 


óo0oó 

Department Administrative Order No. 2003-35 

Revised Guidelines Regulating the Implementation and Management 

of DENR Comprehensive Agrarian Reform Program 

(Text Available at Office of the National Administrative Register (ONAR), U.P. 

Law Center, Diliman, Quezon City) 


óo0oó



Administrative Order No. 2002-38 

Guidelines for the Implementation of Proclamation No. 297 ñ 

ìExcluding a Certain Area from the Operation of Proclamation No. 369 

dated February 27, 1931, and Declaring the Same as Mineral 

Reservation and as Environmentally Critical Areaî 



óo0oó 


Implementing Rules and Regulations of DAO 16, Series of 2002 

Entitled ìThe DENR-EMB National Environmental Userís Fee of 2002î 

Pursuant to the provisions of Section 6 letters (a), (d) and (g) of Presidential Decree 

No. 984, otherwise known as ìNational Pollution Control Decree of 1976î and Executive 

Order No. 192, Series of 1987, and by virtue of Department Administrative Order No. 16, 

Series of 2002, the Department of Environment and Natural Resources hereby adopts and 

promulgates the following rules and regulations: 

ARTICLE I 


Section 1. Basic Policy. It is the policy of the State, consistent with the Constitution, to 

prevent, abate and control water pollution for the effective utilization of the water resources of 

this country. Towards this end the State shall pursue a more efficient and effective approach 

to promote and encourage pollution reduction. 

Section 2. Objectives. The National Environmental Userís Fee (NEUF) is hereby 

adopted by the DENR through its wastewater permitting system to: 

a. Reduce water pollution and improve the ambient quality of water bodies; 

b. Encourage firms to pursue the least-cost means of pollution reduction and internalize the 

philosophy of self-regulation; 

c. Implement the concept of Environmental User Fee nationwide. 

Section 3. Scope. This Order shall apply to all establishments and installations that 

discharge industrial and commercial wastewater into water bodies and/or land resources. 

Section 4. Definition of Terms. When used in this Order, the following terms and 

phrases shall have the indicated meanings unless clearly stated otherwise: 

a. Commercial Wastewater refers to any liquid waste generated by trading or business 

establishment and or any other related firms or companies, which include but not limited


to restaurants, shopping malls, commercial laboratories, hospitals, markets, commercial 

condominiums, hotels, gasoline stations, and other establishments engaged in the collection 

and disposal of wastewater sludge. 

b. Department refers to the Department of Environment and Natural Resources (DENR). 

c. Discharge includes, but is not limited to the act of spilling, leaking, pumping, pouring, 

emitting, emptying, releasing or dumping of any liquid materials into water body or onto 

land from which it might flow or drain into said water body. 

d. Discharger refers to any person or persons, natural or juridical, discharging liquid wastes, 

and/or other wastes into the environment. 

e. Effluent refers to any wastewater, partially or completely treated, or in its natural state, 

flowing out of a commercial establishment, manufacturing plant or treatment plant. 

f. Environmental User Fee (EUF) refers to one of the market-based instruments applied 

by the DENR in its permitting system, and is levied to the dischargers for using the 

environment specifically the water and/or land resources for waste disposal purposes or 

receptacle facility according to each unit of discharge. 

g. Fixed Fee refers to charges that covers administrative cost of processing, filing, monitoring 

and inspection. 

h. Industrial Wastewater refers to any liquid waste resulting from any activity, process or 

industry, manufacturer or from the development, processing or recovery of any natural 

resources. 

i. Inorganic Pollutant refers to a certain type of pollutant that denotes any chemical compound 

that does not contain carbon. In wastewater engineering, it is a type of pollutant 

that contains inorganic components, which are non-biodegradable in nature, usually, 

residues from geologic formations that are capable of settling. 

j. Land Resources refers to the integrated components of soil, hydrology, topography, 

geology and vegetation together which form the basis of manís use of the environment for 

agriculture, forestry and human settlements. 

k. Load-based Fee is the product of pollutant load and rate of charge per kilogram of 

pollutant. 

l. Managing Head refers to the President, Managing Director, Managing Partner, Chief 

Executive Officer or highest executive officer of a corporation, partnership or other juridical 

persons or establishments. 

m. Organic Pollutant refers to a certain type of pollutant that oxidizes in the receiving body 

of water and reduces the amount of dissolved-oxygen available. This type of pollutant 

contains biodegradable organic substances or oxygen-demanding wastes and measured 

in terms of BOD 5 , COD and Total Organic Carbon. However, for purposes of these rules 

and regulations, the organic pollutant shall be measured in terms of BOD 5 during the initial 

stage. 

n. Person or Persons refers to any being, natural or juridical, susceptible of rights and 

obligations or of being the subject of legal relations. 

o. Permit Holder refers to person or persons granted a Wastewater Discharge Permit by 

DENR and who is bounded to comply with all the stipulations required in the said permit. 

p. Regional Office refers to any Regional Office of the Environmental Management Bureau 

(EMB) which is a line bureau under the Department of Environment and Natural Resources 

per Section 34 of R.A. 8749 (Philippine Clean Air Act of 1999). 

q. Secretary refers to the Secretary of Department of Environment and Natural Resources. 

r. Wastewater refers to waste in liquid state that contains pollutants or waste substances. 

s. Water Resources refers to all bodies of waters such as but not limited to rivers, streams, 

watercourse/waterways, ponds, reservoirs, lakes, estuarines, marine and groundwater 

within the territory of the Philippines.


t. Wastewater Discharge Permit also known as the Permit refers to the legal authorization 

granted by the Regional Office to discharge liquid waste and/or pollutants of specified 

concentration and volume into any water or land resource for a specified period of time. 

u. Wastewater Discharge Permitting System also known as the NEUF permitting system 

primarily based on powers and function of P.D. 984 (Pollution Control Law), Section 6 

letters (c), (d) and (g). It also refers to the entire schemes and methods in regulating the 

Departmentís legal authorization for all of wastewater dischargers. 

ARTICLE II 

WASTEWATER DISCHARGE PERMIT 

Section 5. Requirements for Application for a Wastewater Discharge Permit. Any 

person who shall discharge in any manner industrial or commercial wastewater into Philippine 

water and/or land resources shall secure a wastewater discharge permit from the Regional 

Office. Such a person shall file an application in two (2) copies using prescribed forms. The 

application should be under oath by the Managing Head or his/her duly authorized 

representative. Persons applying for the first time shall submit such documents, information 

and data as may be required by the Regional Office including but not limited to the following: 

a) Engineerís Report containing such information as: 

i) vicinity map identifying the street address, location or plant premise; 

ii) the nature of project or business; 

iii) production capacity; quantity or volume and the generic name(s) of product(s); 

iv) the nature and character of the applicantís wastewater and its physical and chemical 

composition; 

v) total daily volume of discharge of raw wastewater; 

vi) treatment process and estimated treatment efficiency; 

vii) the total daily volume of water consumption and discharge of final treated wastewater 

or effluent; 

viii) the name of receiving body of water and its official water classification and in case 

of land discharge, the nearest receiving body of water and its official water 

classification; 

ix) information on flow measurement equipment and procedure; 

x) Pollution prevention/Environmental Management System plan or program. 

xi) DENR ID Number as hazardous waste generator (if applicable) 

xii) Statement of the cost incurred in the installation and maintenance of wastewater 

treatment facility, if any. 

A registered chemical or sanitary engineer or Pollution Control Officer shall sign such 

engineer report concurred by the Managing Head. 

b) A copy of the results of sampling analysis of the establishmentís wastewater characteristics 

(for four quarters in the previous year as reported in the PCO Quarterly Report); 

c) A copy of the Certificate of Accreditation of the Pollution Control Officer duly issued by 

the Department, or appointment/designation as such by the Head; 

d) Official Receipt for the payment of the applicable Fixed fee.


e) For new/modified establishments, a copy of the Environmental Compliance Certificate 

(ECC) or Certificate of Non-Coverage (CNC) from the Department under DENR Administrative 

Order No. 37 Series of 1996; 

Failure to submit the necessary requirements under Section 5 of this IRR shall be 

sufficient ground for the disapproval of the application. 

Section 6. Processing of the Application for a Wastewater Discharge Permit. The 

Regional Office shall act on the application for a Wastewater Discharge Permit within thirty 

(30) working days from receipt of all the requirements cited in Section 5 of this Implementing 

Rules and Regulations. 

The application will either be approved through the issuance of the corresponding 

permit or denied in writing stating the reason or reasons thereof. 

Section 7. Approval and Issuance of a Wastewater Discharge Permit. The said 

permit shall be issued subject to such conditions as the Regional Office may impose including 

but not limited to the following: 

a. Compliance with the DENR Effluent Standards (DENR Administrative Order No. 35, Series 

of 1990); 

b. Submission of duly-filled quarterly self-monitoring reports or Pollution Control Officer 

(PCO) Quarterly Monitoring Report, whichever is applicable; 

c. Issuance of a Temporary Lifting Order (TLO), applicable to those industries with existing 

PAB (Pollution Adjudication Board) cases. 

d. Payment of EUF. 

Section 8. Motion for Reconsideration for Disapproved Wastewater Discharge 

Permit Applications. In case the application is denied, a petition for reconsideration may 

be filed at the Regional Office within fifteen (15) working days from the date of receipt of a 

written notice of such disapproval. The Regional Office within thirty (30) working days from 

the date of receipt of the motion shall decide upon the petition. 

Section 9. Appeals. The decision of the Regional Office in approving or disapproving 

an application for the Wastewater Discharge Permit may be appealed to the Secretary within 

fifteen (15) working days from receipt of written notice of such decision. Said appeal shall 

not stay the execution of the decision of the Regional Office unless ordered otherwise by the 

Secretary. The decision of the Secretary is final and executory. 

Section 10. Validity and General Conditions of a Wastewater Discharge Permit. A 

Wastewater Discharge Permit is valid for a minimum period of one year, unless suspended 

or revoked sooner. The said permit shall provide the terms and stipulations for wastewater 

discharge, amount of fees to be paid, payment scheme and other relevant permit conditions 

which shall be fully complied with by the discharger/permit holder. 

A suspended or revoked permit may be re-issued during the original life of the permit 

only after the permit holder has fully complied with all permit conditions and has paid all 

required fees, fines and penalties to the Regional Office. The reinstated permit shall expire 

according to its original expiry date.


Section 11. Grounds for Suspension or Revocation of Wastewater Discharge 

Permits. After due notice and hearing, the Regional Office may suspend or revoke any 

existing and valid permit issued under these regulations on any of the following grounds: 

a. Non-compliance with or violation of any provisions of P.D. 984 or these rules and regulations 

and/or permit conditions; 

b. Non-submission of quarterly self-monitoring reports; 

c. Falsification of information stated in the application for permit, which led the Regional 

Office to issue the permit; 

d. Refusal to allow lawful inspections under Section 6 (n) of P.D. 984; 

e. Non-payment of EUF; 

f. Other lawful and valid causes as provided for in these rules and regulations. 

Section 12. Effect of Disapproval of Application or Suspension or Revocation of 

Wastewater Discharge Permit. Disapproved applications or suspended or revoked 

wastewater discharge permits shall not grant any right or privilege to the applicant or former 

permit holder to discharge its wastewater into the environment. If the applicant continues to 

discharge despite disapproval of application or suspension/revocation of a wastewater 

discharge permit, the Secretary or his duly authorized representative shall immediately issue 

Ex-parte Cease and Desist Order directing the discharger to discontinue from further 

discharging its wastewater into its immediate receiving water body or its tributaries or land 

resources, or stoppage of dischargerís operations, and impose fines and penalties at existing 

rate applicable and provided for by law, without prejudice to criminal prosecution under P.D. 

984, and other applicable laws. 

If the wastewater being discharged the quality of which exceeds the existing allowable 

DENR Effluent Standards provided for under DENR Administrative Order No. 35, Series of 

1990, the matter shall be referred to the Pollution Adjudication Board (PAB) for the issuance 

of an ex-parte Cease and Desist Order pursuant to Section 7-A of P.D. 984 and Section 19 

of E.O. 192. 

Section 13. Posting of Permit. The permit holder/discharger shall display its permit 

within the premises of the plant or installation in a noticeable place and in such a manner as 

to be a clearly visible and accessible. 

Section 14. Transfer of Permit. The permit shall be non-transferable. Provided, however, 

in case of sale or transfer of ownership or control of the establishment and/or facilities, the 

transferee shall notify the Regional Office within fifteen (15) working days of the fact of 

transfer of ownership or control, providing the name and address of the transferee and 

attaching the document evidencing the transfer and file an application for transfer of the 

permit in his name provided that there is no change in the nature of the business. The permit 

shall expire according to the original expiry date. 

Section 15. Requirements for Renewal of the Wastewater Discharge Permit. The 

wastewater discharge permit may be renewed by filing an application for renewal in two (2) 

copies on forms prescribed by the Regional Office not later than thirty (30) working days 

before its date of expiration. The application for renewal shall be signed by the Managing 

Head and the designated/assigned Pollution Control Officer and must be duly notarized. The 

application should be supported by such documents, information and data as may be required 

by the Regional Office including but not limited to the following:


a) Quarterly self-monitoring reports (submitted 30 calendar days after the end of the quarter); 

b) Official receipt for the payment of the Load-based Fee and Fixed Fee; 

c) Description of the details and the cost of the upgrade or rehabilitation of wastewater 

treatment facilities (if any); 

d) Details of the changes in production technology (if any). 

ARTICLE III 

WASTEWATER DISCHARGE PERMIT FEES 

Section 16. Wastewater Discharge Permit Fee. The wastewater discharge permit 

fee in these rules and regulations shall comprise both fixed and load-based fee. 

Df = F + LBF 

Where: Df = total wastewater discharge permit fee per establishment or 

installation 

F = fixed fee per establishment or installation per year (PhP/facility) 

LBF = pollutant load-based fee 

Section 17. Schedule of Fixed Fee. The fixed fee will be based on the average daily 

volumetric flow of wastewater discharges (measured in cubic meters per day), and the 

presence of heavy metals in the wastewater. The fixed fee is to be paid by all industrial and 

commercial establishments applying for a wastewater discharge permit. The fixed fee is to 

be paid at the time of permit application, and the issuance of such permit shall be conditional 

on the payment of the fixed fee. The fixed fee, which applies to both new and renewed 

permits on an annual basis, shall be paid in accordance to the following schedule: 

Volumetric Rate of Discharge Fixed Fee without the Fixed Fee with the 

Heavy Metals (PhP) Heavy Metals (PhP) 

Up to 30 cu. m./day 6,500 9,000 

More than 30 up to 100 cu.m./day 7,500 10,000 

More than 100 up to 150 cu.m./day 8,500 11,000 

More than 150 cu.m./day 10,000 12,500 

Section 18. Calculation of the Load-Based Fee (LBF). The load based fee is to be 

paid by all commercial and industrial establishments and installations which have obtained a 

wastewater discharge permit. 

The annual LBF for each establishment will be calculated according to the following 

formula: 

LBF = R x L 

Where: LBF is the pollutant load-based fee to be paid by establishment/installation for four 

quarters (in PhP/year); 

R is the rate per kilogram of BOD 5 or TSS (in PhP/kg); 

L is the total BOD 5 or TSS pollutant load in four quarters (in kg/year)


An industry shall be charged either by BOD or TSS, 

Industries discharging organic pollutant shall be charged PhP5.00 per kilogram 

BOD 5 and industries discharging inorganic pollutant shall be charged PhP5.00 per kilogram 

TSS. 

In the above formula, the BOD 5 and TSS pollutant load for each establishment and 

installation is a summation of the average pollutant load for four quarters, calculated as 

follows: 

Where: 

4 

L, BOD5 = [C t , BOD 5 x Q t x N t )/10 6 ] 

t=1 

4 

L, TSS = [C t , TSS x Q t x N t )/10 6 ] 

t=1 

C t, BOD is the average concentration of effluent BOD 5 of establishment i in quarter 

t (mg/L); 

C t, TSS is the average concentration of effluent TSS establishment i in quarter t 

(mg/L); 

Q t is the average daily volume of discharged wastewater by establishment i in 

quarter t (Liters/day); 

N t is the number of operating days for establishment i during quarter t (no. of 

operating days/year). 

The pollutant load is to be calculated by each commercial and industrial establishment 

and installation, based on the Regional Officeís monitoring reports. In the absence of such 

information, data provided in the quarterly self-monitoring reports validated by the Regional 

Office would be used. 

Section 19. Surcharges and Credits on Annual Wastewater Discharge Permit 

Fee. In the event that actual discharge loading is more than those specified in the permit, the 

Department shall impose surcharges equivalent to the excess loading multiplied by the loadbased 

fee rate plus twelve (12) percent per annum of this amount. Conversely, if the actual 

discharge loading is less than those allowed, the permit holder shall be entitled to a credit of 

a portion of the load- based fee corresponding to the reduced loading multiplied by the loadbased 

fee rate. Any surcharge or credit will be determined upon renewal of the permit and 

shall be incorporated into the permit fee assessment for the coming year. 

The allowable loading exceedance must be within 20 percent of the allowable discharge 

loading as specified in the permit, and is not to exceed the effluent standard, and allowed 

only for one (1) quarter. In case actual discharge conditions in terms of loading and duration 

are in excess of what are allowed, the Department may suspend or revoke the permit, and/or 

impose other sanctions as provided for by these rules and regulations, as the case may be.


Section 20. Payment Scheme for the Load-Base Fee. The schedule of payments 

shall be specified in the establishmentís Wastewater Discharge Permit. The load-based fee 

may be paid in full or on quarterly basis. Quarterly payments can be arranged based on the 

Permit Holderís agreement with the Regional Office. Full payment of the load-based fee 

within 30 calendar days after release of assessment of fees shall be entitled to a 10 percent 

discount. 

ARTICLE IV 

MONITORING 

Section 21. Self-Monitoring Reports. The Regional Offices shall require the permit 

holder or discharger to submit a quarterly self-monitoring report on a prescribed form under 

oath before a notary public signed by the Managing Head and the Pollution Control Officer or 

any registered chemical or sanitary engineer as designated/assigned by the Managing Head 

as PCO. The report shall contain specifically the quality and quantity of wastes discharged 

daily or periodically, as the case may be, the characterization and laboratory analyses 

conducted preferably by a duly licensed and recognized/accredited laboratory by the 

Department, and such other material information the Regional Office may require from the 

discharger. 

The self-monitoring report shall be submitted to the Regional Offices within fifteen (15) 

calendar days after end of each quarter or period allowed under the discharge permit. 

Section 22. Plant Operational Problems. In the event that the permit holder is unable 

to comply with any of the conditions of the permit due to a breakdown of the facility covered 

by the permit or for any cause, the Managing Head and the Pollution Control Officer or any 

registered chemical or sanitary engineer as designated/assigned by the Managing Head as 

the PCO, shall notify the Regional Offices within forty-eight (48) hours of such fact and its 

cause or causes and likewise the remedial steps to contain or solve the problem and to 

prevent its recurrence, including the details of any plan toward reconstruction or repair/ 

rehabilitation or upgrading of such facility. 

In cases where there is imminent danger to public health and safety, the permit holder 

should notify the Regional Office and the public within 24 hours. 

Section 23. Compliance Monitoring Protocols. The Regional Offices shall subject 

permit holders to periodic monitoring inspections, The permit holder shall ensure that all 

relevant documents (maps, diagrams, permits, manufacturing process documentation, 

laboratory and monitoring reports, etc.) and concerned personnel are available during 

monitoring activities. 

Key personnel from the Regional Office shall inspect the establishment, plant or treatment 

facilities of the permit holder or discharger at any time to determine compliance with the 

effluent quality standards, rules and regulations and permit conditions. The water quality 

parameters relevant to the plant operation and type of industry shall be determined at least 

quarterly. 

Section 24. Access to Premises. The permit holder shall provide immediate, safe and 

adequate access to authorized representatives of the Department or Regional Offices or


inspectors after showing proper identification and mission order from the Department or 

Regional Office. 

ARTICLE V 

PROHIBITIONS 

Section 25. General Prohibitions. No person shall throw, run, drain or otherwise 

dispose into any of the water and/or land resources of the country, or cause, permit, suffer 

to be thrown, run, drain, allow to seep, or otherwise dispose thereto, any organic or inorganic 

matter or any substance in liquid form without an approved Permit from the Regional Office. 

Section 26. Specific Prohibitions. No person shall perform, cause or undertake any 

of the following activities without first securing permit from the Regional Office: 

a. The increase in volume or strength of any wastes in excess of the permitted discharge 

specified under any existing permit; and 

b. The construction or use of any outlet or unauthorized by-pass channels for the discharge 

of any untreated wastes, liquid or solid, directly into the water and/or land resources of the 

Philippines. 

Section 27. Other Prohibitions. Other prohibitions shall consist of the following: 

a. Commission or omission of any act in violation of these rules and regulations including, 

but not limited to, failure or refusal to secure and/or renew the Permit, submit self-monitoring 

reports, or refusal to pay fees, fines and penalties; 

b. Refusal, obstruction or prevention of entry of authorized representatives of the Regional 

Office into any property devoted to industrial, manufacturing, processing, or commercial 

use for the purpose of inspecting or monitoring the compliance of the establishment/ 

facility with the Permitting System and/or conditions therein; 

c. Discharge, dispose, drain or allow to seep, any wastewater into waters classified as Class 

ìAAî, and Class ìSAî (as defined in DAO 34, Series of 1992). 

ARTICLE VI 

FINES AND PENALTIES 

Section 28. General Administrative Fines. Any person, natural or juridical, found 

violating or failing to comply with these rules and regulations and/or conditions embodied in 

the permits issued by the Regional Office shall be liable to administrative fine in an amount 

not exceeding one thousand pesos (PhP1,000.00) for every day of violation in addition to 

such other sanctions stated in these rules and regulations. The imposition of the said fines 

does not preclude the Department from instituting, before the appropriate Courts, the proper 

criminal or civil action as the case may warrant. 

Section 29. Penalty for Late Renewal. Failure to renew the wastewater discharge 

permit within the period specified under Section 15 of these Rules and Regulations shall be 

liable to a penalty of not to exceed one thousand pesos (PhP1,000.00) per day during which 

such violation or default continues. 

Section 30. Penalty for Refusing Entry. Any person who shall refuse, obstruct or 

hamper the entry of the duly authorized representative of the Regional Office into any property


of the public domain or private property devoted to industrial, manufacturing, processing or 

commercial use during reasonable hours for the purpose of inspecting or investigating the 

conditions therein relating to pollution or possible or imminent pollution or inspecting or 

monitoring the compliance of the establishment/facility with the Permitting System and/or 

conditions therein, shall be liable to a fine not exceeding two hundred pesos (PhP200.00) or 

imprisonment of not exceeding one month, or both, or the suspension or revocation of the 

permit. 

Section 31. Penalty for the Commission of Other Acts Prohibited Under Article V. 

Any person who shall violate all other prohibitions under Article V of these Rules and Regulations 

or any order or decision of the Department, shall be liable to a penalty of not to exceed one 

thousand pesos (PhP1,000.00) for each day during which such violation or default continues, 

or by imprisonment of from two (2) years to six (6) years, or by both fine and imprisonment 

after due notice and hearing and in addition such person may be required or enjoined to 

discontinuance such violation. 

In case the violator is a juridical person, the penalty shall be imposed on the Managing 

Head for the violation. 

Section 32. Non-Payment of Fines. The fines so imposed shall be paid to the 

government through the Regional Office. Failure to pay the fine in any case within the time 

specified in the aforementioned order or decision shall be sufficient ground for the Regional 

Office to order the closure or stoppage of the operation of the establishment being operated 

and/or managed by said person or persons until payment of the fines shall have been made. 

Payment of the fines does not ipso facto operate to vest on the violator the right to resume 

operation. 

ARTICLE VI 

FINAL PROVISIONS 

Section 33. Deputization of Functions. The Department may deputize in writing or 

request assistance from appropriate government or non-government agencies or 

instrumentalities for the purpose of enforcing these rules and regulations. 

Section 34. Issuance of Implementing Guidelines. For the effective implementation 

of the Administrative Order, the Environmental Management Bureau shall prepare the 

implementing guidelines of this Order, in consultation with the industry sectors and other 

stakeholders, within ninety (90) working days upon issuance of this Order which shall be 

approved by the Secretary. 

Section 35. Phase Out of the Authority to Construct and Permit to Operate. The 

Wastewater Discharge Permit shall henceforth replace collectively the existing Authority to 

Construct and Permit to Operate wastewater treatment facilities. 

Section 36. Separability Clause. Any section or provision of these rules and regulations 

declared to be unconstitutional or invalid by a competent court, the other sections or provisions 

hereof shall remain to be in force. 

Section 37. Monitoring and Evaluation. These rules and regulations shall be subject 

to monitoring, evaluation and/or formal review by the Environmental Management Bureau


(EMB) from the adoption of this implementing rules and regulations (IRR). Changes in this 

IRR shall be subject to public consultation and approval of the Secretary. 

Section 38. Information, Education Campaign. For the effective implementation and 

coordination efforts of the NEUF system, the EMB Central Office and Regional Offices, shall 

conduct the continuing education and information campaign within the concerned sectors 

related agencies upon the adoption of these implementing rules and regulations. 

Section 39. Repealing Clause. Provisions of the 1978 National Pollution Control 

Commission (NPCC) Implementing Rules and Regulations, as amended, the Effluent 

Regulations of 1982, and the other existing rules and regulations of the Department, which 

are inconsistent herewith, are hereby repealed. 

Section 40. Effectivity. These rules and regulations shall take effect thirty (30) days 

from its complete publication in at least two (2) national newspapers of general circulation. 



APPROVED. 


Secretary 

óo0oó 

Administrative Order No. 2003-41 

Amending Certain Provisions of Ministry Administrative Order No. 50, 

dated November 19, 1986 (Integrated Regulation on the Establishment 

and Operation of Wood Processing Plants). 

In order to rationalize the wood industry and promote its growth, certain provisions of 

Section 2, Chapter I, the entire provision of Section 6, Chapter II and certain provisions of 

Sections 10, 11 and 12 of Chapter IV of MAO 50 are hereby amended as follows: 

ìSection 2. Definition of Terms 

Wood Processing Plant - a mechanical device, machine, combination of machines 

or set-up used for the treatment of wood poles and piles, or for the conversion 

of logs and other wood raw materials into lumber, veneer, plywood, wall 

board, block board, wood-cement board, paper board, pulp, paper, wood chips, 

or for the processing of other finished wood products.î 

XXX 

ìSection 6. Application requirements:

1400 National Administrative Register Volume 14/3 

6.1. Duly accomplished application form with notation by authorized DENR collection 

officer on the Official Receipt number and date of payment of the application 

fee. 

6.2. Certificate of Registration of Articles of Incorporation, Partnership or Cooperation, 

as the case may be. 

6.3. For individual persons, document reflecting proof of Filipino citizenship such 

as Birth Certificate or Certificate of Naturalization. 

6.4. Environmental Compliance Certificate or Certificate of Non-Coverage, as 

the case may be, issued by the Environmental Management Bureau pursuant to 

DAO 96-37. 

6.5. Sworn statement of the applicant declaring the source of wood raw materials, 

supported by certified documents such as, but not limited to supply contracts, 

or other appropriate proof of availability and legitimacy of wood source. 

6.6. In case the Wood Processing plant is to be located in/or already located in 

public forest land, the applications for Special Land Use Permit and processing 

plant permit will be processed simultaneously. The duration of the Special Land 

Use Permit shall be co-terminus with the duration of the processing plant permit. 

xxx 

ìSection 10 Tenure. 

The Permit to Establish and Operate Wood Processing Plant referred to in Sections 

11 and 12 below shall be co-terminus with the forestry tenurial instruments 

issued such as CBFMA, IFMA, SIFMA, and TLA if the applicant is also the holder 

of such forestry tenurial instrument, provided, that the wood production from such 

forestry projects is the primary input to the processing plant. For applicants who 

are not holders of forestry tenurial instrument, the permit issued shall have a 

duration of three (3) years, renewable every three years thereafter, provided that 

the annual permit fee shall be duly paid.î 

xxx 

ìSections 11 and 12. Authority to Establish and Permit to Operate Wood Processing 

Plant 

The Authority to Establish and the Permit to Operate shall be combined into a 

single Permit to Establish and Operate Wood Processing Plant. This same 

permit shall also be issued for authority to acquire new equipment and to expand 

existing wood processing plants. 

The Permit to Establish and Operate Wood Processing Plant, including renewal 

to operate, shall be approved by the Regional Executive Director.î

July - September 2003 National Administrative Register 1401 

xxx 

Repealing Clause. All other provisions of MAO 50 Series of 1986 shall remain valid and 

with full force and effect. 

Effectivity. This order shall take effect 15 days after publication in a newspaper of 

general circulation and upon acknowledgment of the UP Law Center. 




Secretary 

óo0oó 

Administrative Order No. 2003-42 

Interim Guidelines for the Establishment of a Special Use 

of Forestland for Herbal/Medicinal Plantation 

Pursuant to the provisions of Section 64 of Presidential Decree No. 705, as amended, 

Executive Order No. 192, Series of 1987, and in order to facilitate the establishment and 

development of medicinal/herbal plantation in the country, this interim guidelines is hereby 

implemented for the guidance of all concerned: 

1. The existing provisions, rules and regulation governing the granting of leases or permits 

for special uses of forestland, other than IFMA, SIFMA and grazing purposes, are hereby 

adopted in the establishment of special use of forestland for herbal/medicinal plantation; 

and 

2. Pending the conduct of an appropriate study, the government share for special use of 

forestlands solely for medicinal/herbal plantation development is set as follow: 

FIVE HUNDRED PESOS (Php500.00) per hectare and fraction thereof and to be 

increased cumulatively by ten percent (10%) every year without prejudice to 

adjustment in the future after an appropriate study on the determination of economic 

rent for government lands used for medicinal/herbal plantation development 

has been undertaken. 

3. Permit, survey and all other fees shall be in accordance with the administrative fees 

imposed for forestry activities. 

4. The Forest Management Bureau (FMB) is directed to conduct, in coordination with other 

DENR offices/bureaus and other appropriate government agencies, an economic study 

to determine the appropriate rate of government share that the DENR shall collect for 

medicinal/herbal plantation. Also, the economic study that will be done on the subject 

matter should include the appropriate tenurial instrument to be used and the relevant rules, 

regulations and incentives that will be imposed thereto.

1402 


This order supersedes all orders, circuits, and instructions inconsistent herewith and 

takes effect immediately upon acknowledgment by the UP Law Center and fifteen (15) days 

after its publication in two (2) newspapers of general circulation. 





Secretary 

óo0oó 

Joint DENR-DTI Memorandum Circular No. 2003-02 

Establishment of a Mining Investment Assistance Center 

(Text available at Office of the National Administrative Register, 



óo0oó 

Memorandum Order No. 2003-08 

Simplification of Procedures in the Issuance 

of Mining Contracts and Permits 

Pursuant to the continuing effort of the Department of Environment and Natural Resources 

(DENR) to revitalize the minerals industry through the simplification of procedures in the 

issuance of mining contracts and permits, specially by decentralizing authorities and reducing 

the processing time of mining applications, the following measures are hereby promulgated 

for the guidance and compliance of all concerned: 

Section 1. Immediate Processing of Mining Applications. Within fifteen (15) working 

days from the receipt of a mining application, the Mines and Geosciences Bureau (MGB) 

Regional Office (RO) concerned shall determine whether or not the applied area is open to 

mining applications and forward the cleared mining application to the One-Stop Shop Committee 

for Area Status and Clearance, consistent with the provisions of Section 2 hereof. Within the 

same period, a mining application filed entirely in closed areas pursuant to the pertinent 

provisions of Section 15 of DENR Administrative Order (DAO) No. 96-40, the revised


implementing rules and regulations of Republic Act (RA) No. 7942 or the Philippine Mining 

Act of 1995, shall be formally denied. In the case of a mining application filed partly in closed 

areas, the mining applicant shall be formally advised within the same fifteen (15) working day 

period from receipt of the said mining application to excise the closed areas and resubmit 

the rectified documents within thirty (30) working days upon receipt of the pertinent letternotice. 

Section 2. Creation of a One-Stop Shop Committee for the Issuance of Area 

Status and Clearance for Mining Applications. In support of the Mining Investment 

Assistance Center, all MGB ROs, in coordination with the DENR ROs, shall establish the 

ìOne-Stop Shop Committeeî (OSSC) representing the DENR Sectors in the region, to facilitate 

the issuance of Area Status and Clearance for mining applications and consequently reduce 

their processing time. All DENR Regional Executive Directors (REDs) and MGB Regional 

Directors (RDs) shall provide the necessary support to the OSSC by assigning qualified 

personnel on a part-time basis and by periodically providing updated land classification/land 

use maps. The Forest Management Bureau and Protected Areas and Wildlife Bureau shall 

likewise assist in providing such information. Within fifteen (15) days from the effectivity of 

this Memorandum Order, the RED and RD concerned in every region shall submit to the 

DENR Secretary for approval the special order to constitute and operationalize the OSCC. 

The RD of the MGB shall be the Chairman of the OSCC. 

Within fifteen (15) days from the approval of the special order, the OSSC shall hold 

office, compile all the information on land classification/use/status, including the pertinent 

maps within their areas of jurisdiction, and immediately initiate the preparation of a master 

map of the region showing the various land classifications/uses/status in overlays. The OSSC 

Chairman, upon the recommendation of the OSSC members, shall be authorized to issue the 

Area Status and Clearance for mining applications following the applicable provisions of 

DENR Memorandum Order (DMO) No. 98-03 re: Guidelines in the Issuance of Area Status 

and Clearance or Consent for Mining Applications. 

The RED shall oversee the operations of the OSSC and assist in this undertaking by 

providing the necessary resources. 

Section 3. Approval of Memorandum of Agreement/Option Agreement/Operating 

Agreement and Other Similar Forms of Agreement. Memorandum of Agreement/Option 

Agreement/Operating Agreement and other similar forms of Agreement, except involving 

transfer/assignment of mining rights, entered into involving an approved EP, MA, FTAA, or 

any other mining permit under RA No. 7942, shall be registered with the MGB Central Office/ 

RO concerned and shall be subject to the approval of the MGB Director upon evaluation and 

recommendation by the RO concerned. Each of the MGB Central Office and RO concerned 

shall have thirty (30) working days upon receipt of all pertinent requirements to act with 

finality on the Agreement. 

Memorandum of Agreement/Option Agreement/Operating Agreement and other similar 

forms of Agreement entered into involving an application for EP, MA, FTAA, or any other 

mining permit application, shall be registered with the MGB Central Office/RO concerned 

and shall form part of the supporting documents of a mining application, subject to the 

evaluation of the MGB Central Office/RO concerned. Such agreement shall be deemed 

approved upon approval of pertinent mining application.



Section 4. Issuance of Industrial Sand and Gravel Permit. The RDs of the MGB 

shall exercise the delegated authority to issue an Industrial Sand and Gravel Permit (ISGP) 

without prior clearance from the MGB Director pursuant to the applicable provisions of DAO 

No. 96-40, as amended, and all other applicable mining and environmental laws, rules and 

regulations. However, they shall submit to the MGB Director a copy each of every ISGP 

issued, to include all mandatory and other requirements, within seven (7) working days after 

the date of issuance. 

The RD concerned shall have forty-five (45) working days upon receipt of all pertinent 

requirements to act with finality on the ISGP application. 

Section 5. Repealing Clause. DMO Nos. 98-03 and 99-27, other memorandum orders 

and circulars and special orders inconsistent with or contrary to the provisions of this 

Memorandum Order are hereby repealed or modified accordingly. 

Section 6. Effectivity. This Memorandum Order shall take effect fifteen (15) days after 

its complete publication in a newspaper of general circulation and fifteen (15) days after 

registration with the Office of the National Administrative Register. 


DEPARTMENT OF FINANCE 



Secretary 

Department Order No. 19-03 

Fake, Tampered, or Recycled Tax Credit Certificates (TCCs) 

To safeguard the interest of the government as well as the integrity of the tax credit 

system against the use of fake, tampered, or recycled Tax Credit Certificates (TCCs), the 

One-Stop Inter-Agency Tax Credit and Duty Drawback Center (Center) is hereby directed to 

conduct a special revalidation of all outstanding TCCs issued prior to October 1, 2003 as 

defined under this Order. 

SECTION 1. Objective - The Implementation of the special revalidation is intended to 

determine the outstanding amount of TCCs, as defined in this Order, that are still floating in 

the market and to prevent the use of expired, stolen, fake, tampered, or recycled TCC that 

may still exist in the market. 

SECTION 2. Coverage and Definition of Terms - (A) The special revalidation shall 

cover the following TCCs:


1. Jointly issued by the Center and the Bureau of Internal Revenue (BIR) under 

Section 112 of the National Internal Revenue Code: Refunds or Tax Credits of 

Input Tax or TCCs transferred as provided by Revenue Regulations No. 5-2000 

using BIR Form Nos. 2310 (Revised: February 2001) and 2320 (Revised: April 

1988). 

2. Jointly issued by the Center and the Bureau of Customs (BOC) under Section 

106(c) of the Tariff and Customs Code of the Philippines using BOC Form No. 

179 (Revised 1981) 

3. Jointly issued by the Center and the Bureau of Customs (BOC) under Section 

106(b) of the Tariff and Customs Code of the Philippines using BOC Form No. 

179 (Revised 1979) 

B. The following terms are defined as follows: 

a. Outstanding Tax Credit Certificate(s) - this consists of all TCCs within creditable/outstanding 

balances issued under the aforementioned laws, whether originally 

issued to the original grantee or transferred from the original grantee. 

b. Special revalidation - refers to the process of cancellation of outstanding 

TCCs and the replacement with new form as defined in this order. 

c. Unutilized TCC forms - this consists of blank TCC forms which are still in the 

custody of the Center and unreleased to any claimant. 

SECTION 3. General Procedures on the Special Revalidation - 

1. The Center, in coordination with the BIR and the BOC, shall cause the production of new 

TCC forms with additional security features to prevent the unauthorized production and use 

of fake TCCs. In addition to the information indicated in the existing forms, the new forms 

shall clearly indicate the legal basis of the issuance, the approving authorities of the BIR and 

BOC Commissioners and the authority of the Center signatory to release the same to the 

granteeís official representatives. 

2. The Center, BIR and the BOC shall issue their respective Office Order, Revenue Memorandum 

Order and Customs Memorandum Order that will provide for the mechanics for the 

surrender of all outstanding TCCs forms which are in their custody to the Center for revalidation 

in compliance with the provision of this guideline. 

On the other hand, the Center shall surrender all unutilized TCC forms in its custody for 

the appropriate action of the BIR or the BOC. 

3. The Center, BOC and the BIR shall require the holders of outstanding TCCs to surrender 

the same to the Center for special revalidation starting October 1, 2003 up to March 31, 

2004. 

Outstanding TCCs not submitted within the revalidation period shall still be allowed for 

revalidation subject to approval of the Centerís Executive Committee.

1406 National Administrative Register Volume 14/3 

4. The Center shall accept applications for special revalidation in accordance with the following 

procedure: 

a. The Center shall check the authenticity of the TCCs to ascertain that there has 

been no tampering of the forms, that the TCC is validly issued per Center 

recor.000ds, and that they are still subsisting and therefore qualifies for the issuance 

of new certificate corresponding to the unused balance of each TCC. 

b. The creditable balance of the TCCs subject of revalidation shall be based on 

certifications from the BIR, BOC, and the records of the Center. In case of 

differences, reconciliation shall be undertaken by the Center. 

c. The Center shall prepare the revalidated TCC using the new forms equivalent to 

the validated remaining balance. These revalidated TCCs shall be forwarded for 

the signature by the authorized signatory at the BIR or the BOC. 

The revalidated TCC shall indicate the date of original issuance, date of revalidation 

and the TCC maturity date. The maturity date of the TCC shall be the same 

as that of the original issuance and shall undergo regular revalidation as provided 

by law. 

d. The revalidated TCCs approved by the BIR/BOC Commissioner shall then be 

signed by the Centerís official signatory to authorize the release of the same to 

the granteeís official representative according to the prescribed procedures. 

SECTION 4. Transitory Provision - The BIR and the BOC are directed to institute 

measures to prevent the use of fake, tampered, or recycled TCCs during the revalidation 

period. 

SECTION 5. Effectivity - This Order shall take effect upon completion of its publication 

in at least 2 major newspapers of general circulation for a frequency of once a week for 

three consecutive weeks. This Order shall be given as wide publicity as possible. 


DEPARTMENT OF HEALTH 



Secretary 


DOH Crematoria and Other Alternative Technology for 

Hospital Waste Treatment and Disposal


1. Rationale 

In response to the publicís clamor for a proper waste disposal system particularly in 

Department of Health (DOH) hospitals within Metro Manila, the DOH started a Waste Management 

Project in 1997. The project prioritized the installation of Hospital Incinerators and 

Microwave Disinfection Units in DOH hospitals with the objective of reducing manipulation of 

medical and infectious wastes. The installation of these facilities in DOH hospitals was completed 

in the third quarter of 1998 and operations started soon after. 

Republic Act (RA) 8749 on ì The Clean Air Actî was passed into law in 1999. Specifically, 

section 20 of RA 8749 and its Implementing Rules and Regulations (IRR) provided for 

the prohibition of incineration, which is defined as ìthe burning of municipal, bio-medical 

and hazardous wastes, which process emits toxic and poisonous fumesî. In accordance 

with the same provision, the Department of Environment and Natural Resources (DENR) 

was mandated to ìpromote the use of state-of-the-art, environmentally-sound and safe thermal 

and non-burn technology for the handling, treatment, thermal destruction, utilization and 

disposal of sorted, un-recycled, un-composted, bio-medical and hazardous wastesî. 

This Administrative Order is being issued to prescribe guidelines on the use of crematoria 

and other alternative non-burn technology for the treatment and disposal of health care 

wastes and which are inconsistent with the provisions of the Clean Air Act. 

II. Policy Statement 

A. In preparation for the eventual phasing out of incinerators by July 17, 2003, the DOH shall 

transform these existing facilities into crematoria. It therefore restricts their use to the treatment 

of all untreated human body parts, limbs, organs, and tissues that are removed during 

surgery, autopsy or other medical procedures. No other treatment technology shall be utilized 

for this type of wastes. 

B. The crematoria shall serve as an add-on waste treatment technology to the existing microwave 

disinfection units in DOH hospitals. Hence, all concerned DOH hospitals shall maximize 

the use of their existing microwave disinfection units for waste treatment. 

C. Assessment of all existing DOH hospital incinerators as well as microwave disinfection 

units by hospital engineers shall be immediately conducted to determine any need for repair/ 

reconditioning prior to use as crematoria and/or maximal use for waste treatment. 

D. The use of alternative non-burn technology for treatment prior to the disposal of health 

care wastes such as infectious wastes, sharps and other hazardous wastes shall be definitely 

encouraged. 

II. Alternative Non-Burn Technology of Waste Treatment and Disposal for DOH Hospitals 

The following alternative non-burn technology on healthcare waste treatment for DOH 

hospitals are recommended based on these information: technical description of the available 

biomedical waste treatment system, ability of the system to achieve destruction of 

pathogenic organisms, investments, operating and maintenance costs considerations, health 

and environmental considerations, the Clean Air Act and other regulatory requirements.



A. The Autoclave Steam Sterilization Treatment System with shredder or grinder. This is 

recommended for DOH hospitals and other health facilities with the condition that the final 

disposal site has been pre-established. 

In the meantime that the alternative technology is being set in place, DOH hospitals 

located in areas with private healthcare waste treatment and disposal management companies 

are allowed to contract out their waste treatment and disposal needs through these 

private companies. 

B. Chemical Disinfection to destroy or kill microorganisms by the use of disinfectants. This 

is preferred for used syringes and needles prior to safe burial. 

C. Thermal treatment using the existing hospital microwave disinfection units which is 

essentially a steam-based thermal process. The water in the wastes is rapidly heated by 

microwave and the infectious components are destroyed by heat conduction. This is preferred 

for infectious wastes before disposing through the city/municipal collection system 

and for pathological wastes such as placenta and blood before disposing to a septic vault 

designed for the purpose. 

D. Delay to Decay Process where wastes, upon proper identification and segregation are 

placed in a designated storage/decay room until they decay to a level that can be considered 

inactive, prior to disposal according to the rules and regulations of the Philippine Nuclear 

Research Institute (PNRI). This method must be strictly followed for radioactive and hazardous 

chemical wastes. 

II. Implementing Mechanism 

A. The DOH through the National Center for Health Facility Development (NCHFD) 

and the National Center for Disease Prevention and Control, Environmental and Occupational 

Health (NCDPC-EOH) shall be responsible for the implementation of this Order. 

They shall provide technical assistance advisory services and training to personnel of Centers 

for Health Development (CHDs), hospitals and related health facilities. 

B. In particular, NCHFD shall primarily lead in the conduct of monitoring and assessment 

activities in all concerned DOH hospitals. It shall also ensure that existing DOH hospital 

incinerator shall be assessed by their respective hospital engineers not later than June 2003 

to determine any need for repair or reconditioning before securing permit to operate as 

crematoria from respective DENR-Regional Offices. 

Also, all existing DOH hospital microwave disinfection units shall be assessed by their 

respective hospital engineers not later than June 2003, to determine any need for repair or 

reconditioning before maximizing their use for waste treatment. Expenses incurred for this 

purpose shall be charged under the MOOE of each hospital/health facility. 

C. The CHDs shall provide technical assistance and services and conduct monitoring of 

DOH hospitals and other health facilities within their area of jurisdiction. 

D. All DOH hospitals shall ensure the effective implementation of this Order.


IV. Effectivity 


Adopted: 17 Mar. 2003 


Adopted: 21 Apr. 2003 




--o0o-- 


Policies on the Nationwide Implementation of the 

Expanded Program on Immunization 



--o0o-- 


Philippine Organ Donation Program Under 

the Department of Health 



--o0o-- 


Classification of Clinical Laboratories Based On Institutional Character



Administrative Order No. 59, s. 2001 ìRules and Regulations Governing the Establishment, 

Operation and Maintenance of Clinical Laboratories in the Philippinesî Section 5.2 

states: 

Section 5.2 Classification by Institutional Character: 

5.2.1 Hospital-based laboratory -a laboratory that operates within a hospital 

5.2.2 Non-hospital based laboratory- a laboratory that operates on its own 

In response to the need for a more comprehensive and appropriate classification of 

clinical laboratories suited for the prevailing setting, Section 5.2 of Administrative Order No. 

59, s. 2001 is hereby amended as follows: 

Section 5.2 Classification by Institutional Character: 

5.2.1 Institution-based laboratory - a laboratory that operates within the 

premises and operates as part of an institution (e.g. hospital, multi-specialty 

clinics, schools, medical facilities for overseas workers and seafarers). 

5.2.2 Freestanding laboratory - a laboratory that operates outside the 

premises of an institution and operates independently. 

All other provisions of Administrative Order No. 59, s. 2001 shall remain in full force 

and effect. 



(SGD.) MANUEL M. DAYRIT, M.D., MSC 


--o0o-- 


Amendment to Administrative Order No. 33, s. 2001, As Amended 

Provision 4.5 of Administrative Order No. 33, s. 2001 is hereby amended to read as 

follows: 

4.5 Upon approval of the application and payment to the Department of Health of the 

accreditation fee of one thousand pesos (P1,000.00) per brand per category per year or a 

fraction thereof, a certificate of accreditation shall be issued. The certificate shall identify the 

specific classification of the supplier, category, particular brand and product/shipment carried 

and date of expiration of the exclusive distributorship agreement. This certificate shall be 

issued by the Committee for Accreditation of Medical Equipment Suppliers and Medical


Equipment Repair Shop and shall be approved by the Assistant Secretary of Health for 

Regulation and External Affairs. 

All other provisions of Administrative Order No. 33, s. 2001 as amended remains in full 

force and effect. 

This amendment shall take effect immediately. 





(SGD.) MANUEL M. DAYRIT, M.D 


--o0o-- 

Administrative Order No. 54-A, s. 2003 

Guidelines on the Processing and Clearance of Importation 

through Donations by the Department of Health 



--o0o- 


Policy Guidelines on the Operationalization of Botika ng 

Barangays (BnBs) by the Centers for Health Development (CHD) 





--o0o-- 


Schedule of Fees and Charges for Quarantine Services





--o0o-- 

Department Memorandum No. 92, s. 2003 

Suspension of Implementation of Department 

Memorandum No. 37-A, s. 2003 

The implementation of Department Memorandum No. 37-A, s. 2003 re: Headship of 

the Clinical Laboratory and Number of Laboratories a Pathologist Can Handle, is hereby 

suspended for a period of three (3) months, starting from August 4, 2003 to November 4, 

2003, so that this Department can thoroughly study and examine the provisions thereof. 

The suspension of the implementation of Department Memorandum No. 37-A, s. 2003 

is also being effected in line with the organization of a fact-finding committee which will be 

tasked to study, examine and make appropriate recommendations on the aforesaid Department 

Memorandum. 

This Memorandum shall take effect immediately. 

Adopted: 4 August 2003 




--o0o-- 

Department Circular No. 196-A, s. 2003 

Amending Department Circular No. 168-A s. 1995 re Reclassification 

of Ampalaya (Momordica Charantia) from Scientifically-Validated Herbal 

Medicinal Plant to Folkorically-Validated Herbal Medicinal Plant 

In accordance with more recent developments, Ampalaya is hereby reclassified from 

Scientifically-Validated Herbal Medicinal Plan to Folklorically-Validated Herbal Medicinal Plant. 

Department Circular No. 168-A s. 1995 is accordingly modified and/or revised to the extent 

as herein provided. The reclassification is instituted in the light of lack of evidence on the 

clinical efficacy of Ampalaya against Diabetes Mellitus. The information generated from 

studies of Ampalaya has been based on animal studies and a few small studies on humans 

with diabetes mellitus. These studies showed a significant decrease in blood sugar concentration 

and improvement in glucose tolerance. A local open-label crossover study which 

enrolled 27 subjects showed a significant decrease in HBA1C, but not fasting blood glucose. 

Due to sample size limitations and open nature of the study, the findings have not been able


to establish Ampalaya as truly beneficial and even as adjunctive treatment to diabetes mellitus. 

To date, no large clinical trial has yet been published on any type of preparation of 

Momordica charantia. 

PENDING FURTHER INVESTIGATION, ALL CONCERNED ARE STRONGLY ADVISED 

TO CEASE, DESIST AND DISCONTINUE ANY ENDORSEMENT OF AMPALAYA AS AN 

ALTERNATIVE TREATMENT OF DIABETES MELLITUS. 

For guidance and immediate compliance. 



(SGD.) MANUEL M. DAYRIT, M.D., MS 


--o0o-- 


Guidelines on Protests on Decisions of the 

Central Office Bids and Awards Committee (COBAC) 

Pursuant to Article XVII (Protest Mechanism) of Republic Act No. 9184, otherwise 

known as The Government Procurement Reform Act, and its Implementing Rules and Regulations, 

the following procedure shall be observed in the filing of protests relative to decisions 

rendered by the Central Office Bids and Awards Committee (COBAC): 

1. Decisions of the COBAC with respect to the conduct of bidding may be protested in 

writing to the Secretary of Health. 

2. However, prior to the filing of the Protest, a Motion for Reconsideration, stating clearly 

therein the grounds relied upon, shall be filed by the party concerned immediately after the 

issuance of the questioned COBAC Resolution. 

3. COBAC shall issue its resolution on the Motion of Reconsideration within two (2) calendar 

days from receipt thereof. 

4. Should the COBAC Resolution deny its Motion for Reconsideration, the party concerned 

shall file the Protest within seven (7) calendar days from receipt of said Resolution. 

5. A Protest may be made by filing a verified position paper with the Secretary of Health, 

accompanied by the payment of a non-refundable protest fee to the COBAC Secretariat. 

The non-refundable protest fee shall be in an amount equivalent to no less than one percent 

(1%) of the Approved Budget of the Contract (ìABCî). 

6. The verified position paper shall contain the following information: 

a. The name of bidder; 

b. The office address of the bidder;

1414 


c. The name of project/contract; 

d. The implementing office/agency or procuring entity; 

e. A brief statement of facts; 

f. The issue to be resolved; and 

g. Such other matters and information pertinent and relevant to the proper resolution 

of the Protest. 

7. The position paper is verified by an affidavit that the affiant has read and understood the 

contents thereof and that the allegations therein are correct of his personal knowledge or 

based on authentic records. An unverified position paper shall be considered unsigned, 

produces no legal effect, and results to the outright dismissal of the Protest. 

8. The Protest shall be resolved strictly on the basis of records of the COBAC. The Secretary 

of Health shall resolve the Protest within seven (7) calendar days from receipt thereof. 

Subject to the provisions of existing laws on the authority of the Secretary of Health to 

approve contracts, his decision on the Protest shall be final. 

9. In no case shall any Protest taken from any decision stay, disrupt or delay the bidding 

process. Provided, however, that the Protest must first be resolved before any award is 

made. 

10. Court action may be resorted to only after the Protest contemplated in this Order shall 

have been completed, i.e., resolved by the Secretary of Health with finality. The proper 

regional trial court shall have jurisdiction over final decisions of the Secretary of Health. 

Court actions shall be governed by Rule 65 of the 1997 Rules of Civil Procedure. 

This provision is without prejudice to any law conferring on the Supreme Court the sole 

jurisdiction to issue temporary restraining orders and injunctions relating to infrastructure 

projects of the Department of Health. 

11. The head of the COBAC Secretariat of the Department of Health concerned shall ensure 

that the Government Procurement Policy Board (GPPB) shall be furnished a copy of the 

cases filed in accordance with this Order. 

This Order shall take effect fifteen (15) days from the publication thereof in at least (2) 

newspapers of general circulation. 




DEPARTMENT OF TRADE AND INDUSTRY 


Department Administrative Order No. 05 

Delineation of Jurisdiction Anent Pyramiding Cases 

Filed With or By the DTI-NCR


SECTION 1. In the interest of the service, it is hereby clarified that the respective 

jurisdiction of the DTI-National Capital Region (DTI-NCR) and the DTI-Office of Legal Affairs 

(DTI-OLA) in the administrative adjudication of pyramiding cases shall be as follows: 

A. For pyramiding cases filed with the DTI-NCR by a consumer under the Consumer Act 

(R.A. No. 7394), the delineation of jurisdiction shall be that provided under Section 3 of 

Department Order No. 124, Series of 1992 as amended by Section 3 of Department Administrative 

Order No. 3, Series of 1993, as follows: 

1. mediation stage - under the jurisdiction of Consumer Arbitration Officers or 

Acting Consumer Arbitration Officers of the DTI-NCR. 

2. Hearing and deciding stage - under the jurisdiction of the Acting Consumer 

Arbitration Officers of the DTI-OLA. 

B. For pyramiding cases motu proprio filed by the Provincial Directors of DTI-NCR the 

delination of jurisdiction shall be that provided under Department Order No. 13, series of 

1989, as amended by D.O. No. 25, series of 1989, as follows: 

1. mediation stage - under the jurisdiction of the DTI-NCRís Provincial Directors 

(or their designees). 

2. Hearing and deciding stage - under the jurisdiction of the Hearing Officers of 

the DTI-OLA. 

SECTION 2. The Director of the DTI-OLA shall continue to be the Consumer Arbitration 

Appeals Officer for pyramiding cases commenced by a consumer under the Consumer 

Act and its rules. He shall likewise continue to be the DTI Adjudication Officer and Appeals 

Officer for pyramiding cases commenced motu proprio by Provincial Directors. 

SECTION 3. This Order shall take effect after fifteen (15) days from publication in a 




(SGD.) MAR ROXAS 

Secretary 

--o0o-- 

Department Administrative Order No. 04 

Implementing Rules and Regulations of Executive Order No. 176, 

series of 2003, entitled ëINSTITUTIONALIZING THE ìISANG BAYAN, 

ISANG PRODUKTO, ISANG MILYONG PISOî PROGRAM TO 

STIMULATE LOCAL ECONOMIC ACTIVITYî



Pursuant to Section 8 of Executive Order No. 176 series of 2003, entitled ìInstitutionalizing 

the ìIsang Bayan, Isang Produkto, Isang Milyong Pisoî Program to Stimulate 

Local Economic Activity,î (ìE.O. No. 176î) the following rules and regulations governing 

the implementation of the Program are hereby prescribed for information, guidance and 

compliance of all concerned departments, offices, agencies, government financial institutions 

(GFIs), and stakeholders: 

SECTION 1. Institutionalization and Objectives of the Program - There is hereby 

institutionalized the ìIsang Bayan, Isang Produkto, Isang Milyong Pisoî Program, hereinafter 

referred to as the ìProgramî, with the objectives of stimulating local economic activity and 

small and medium enterprise (SME) growth, generating jobs, developing the countrywide, 

and sustaining the anti-poverty thrust of the government through countrywide lending to 

SMEs. 

SECTION 2. Program Features - 

a. The Program shall provide financing of One Million Pesos (P1,000,000.00) to cover one 

product or service cluster identified for one city or municipality. Projects that are related or 

allied to the main product or service as part of the backward and forward linkages of the 

particular product or service are also qualified. For this purpose, the Department of Trade 

and Industry (DTI), in consultation with the Local Government Units (LGUs), among others, 

shall identify the priority product or service for the city or municipality. 

b. The One Million Pesos (P1,000,000.00) shall be in the form of a loan with a maximum 

effective interest rate of ten percent (10%) per annum for all funds coming from any government 

Funding Source. The amount of One Million Pesos (P1,000,000.00) allocated for each 

city or municipality may be availed of by several borrowers/SMEs and broken down into 

several loan amounts. A Conduit may be engaged to be the re-lender of the loan, provided 

that it applies a maximum effective spread of 5% per annum. 

For the purpose of EO No. 176 and these Implementing Rules and Regulations (IRR), a 

Conduit is defined as a financial institution accredited and engaged by the GFI and allowed 

by its internal guidelines to serve as a re-lender of the loan. LGUs may also function as 

conduits. 

c. The projects that are eligible for financing under the Program should meet the following 

criteria: 

1. The enterprise undertaking the project must be an SME. For purposes of EO 

No. 176 and as provided under the Magna Carta for Small Enterprises (Republic 

Act No. 6977, as amended by Republic Act No. 8289), as amended by the Small 

and Medium Enterprise Development Council (SMEDC) through SMEDC Resolution 

No. 1, series of 2003, in accordance with law, SME shall refer to any business 

activity or enterprise engaged in industry, agribusiness and/or services, 

whether single proprietorship, cooperative, partnership or corporation whose total 

assets, inclusive of those arising from loans but exclusive of the land on which 

the particular business entityís office, plant and equipment are situated, have a 

value falling under the following categories:


Micro : not more than P3,000,000 

Small : P3,000,001 P15,000,000 

Medium : P15,000,001 P100,000,000 

2. The enterprise must be involved in an income-generating project, which means 

it must generate net cash flows or profits from its core business to sustain operations 

and repay its creditors and loan obligations. 

3. The enterprise must have a ready market and must use proven technology. 

4. For an existing enterprise, it must have generated a positive net income for the 

past year. If the past yearís income is negative, the average income of the past 

two (2) or three (3) years should be positive. 

5. The financial statements of the enterprise must comply with a debt to equity 

ratio of at most 80:20 after the loan. The twenty percent (20%) equity must be in 

the form of tangible assets such as cash and other valued assets directly employed 

or to be employed in the enterprise. 

6. The enterprise must be located within the recipient city or municipality. 

d. The Programs shall be subject to the following: 

1. Loan Purpose 

The loan under the Program may be used for the following purposes: 

For Long-Term Loans: 

Purchase of Equipment/Machinery 

Building Construction (applicable only as part of the enterprise utilized in the 

business as in a factory building, warehouse, rice mill, etc.) 

Purchase of Lot (applicable only as project site) 

Purchase of Inventories-Permanent Working Capital 

For Short-Term Loans: 

Export Financing (Export Packing Credit) 

Credit Line (Temporary Working Capital) 

2. Repayment Term 

For long-term loans, the maximum repayment term shall be five (5) years, 

inclusive of a maximum one (1) year grace period for payment of the principal. 

For short-term loans, the maximum repayment term is one (1) year. 

Repayment amortization shall either be monthly or quarterly, to coincide with 

project cash inflows.



For loans, of which the repayment is from the Internal Revenue Allotment 

(IRA), the repayment term must follow the IRA remittance schedule. 

3. Maximum Financing 

For long-term loans, maximum financing shall be eighty percent (80%) of 

incremental project cost but not to exceed One Million Pesos (P1,000,000.00) 

For short-term loans, maximum financing shall be seventy percent (70%) of 

working capital requirements but not to exceed One Million Pesos (P1,000,000.00) 

e. SMEs/Conduits could avail of the loan in any of the following manner: 

1. The LGU will borrow directly from a GFI to engage in business enterprise. 

2. The Conduit will borrow from a GFI for re-lending to SMEs. 

3. The SME will borrow from a GFI or any of its accredited Conduits. 

The borrower, if an LGU, shall secure approval from the Sanggunian Bayan or 

Sanggunian Panlalawigan, as the case may be, to borrow and engage in an 

enterprise or to re-lend under the Program, and that an annual appropriation be 

provided for the payment of the loan amortization of the project under the Program. 

The LGU shall likewise issue a Deed of Assignment and Authority to Debit 

for the applicable portion of the Internal Revenue Allotment (IRA). 

If the borrower is a corporation or any eligible juridical entity, it must secure a 

board resolution to borrow and engage in an enterprise under the Program. 

f. Collateral or guarantees, when deemed required, shall be provided by the borrower. The 

following, aside from the mortgage of assets acquired from the proceeds of the loan, may be 

used as collateral or loan security: 

1. Real estate mortgage (real property not acquired from loan proceeds) 

2. Chattel mortgage (assets not acquired from loan proceeds) 

3. IRA of the LGU 

4. Assignment of receivables 

5. Credit guarantees from a credible financial institution 

6. Other securities acceptable to the GFI 

g. All releases of funds under the Program shall be supported by a business plan and other 

documents supporting the viability of the enterprise to be funded as evaluated by the Funding 

Source or the GFI/Conduit.


h. Technical and technological support (marketing, product development and skills training) 

shall be provided to SMEs to be funded under the Program.The following government agencies 

shall provide technical and/or technological assistance, as may be needed: 

1. DTI 

2. Department of Agrarian Reform (DAR) 

3. Department of Agriculture (DA) 

4. Technology and Livelihood Resource Center (TLRC) 

5. Department of Science and Technology (DOST) 

6. Technical Education and Skills Development Authority (TESDA) 

The agencies that provide support under the Program shall submit regular 

reports to ìIsang Bayanî Committee, as set forth in Section 7 hereof, specifying 

in the report the assistance provided. 

SECTION 3. Program Fund - 

a. Funding Sources for loans under the Program shall come from various participating GFIs, 

Government-Owned and Controlled Corporations (GOCCs) and other program funds whose 

respective mandates are aligned with the stimulation of SME growth, job generation, poverty 

alleviation, and countryside development. 

b. Primary funding for the Program shall come from the National Livelihood Support Fund 

(NLSF) which shall be allocated for the Program a maximum of Nine Hundred Million Pesos 

(P900,000,000.00) out of its capital fund. 

c. Other Funding Sources with the respective amount of contribution to the Program are as 

follows: 

1. Land Bank of the Philippines - Six Hundred Million Pesos (P600,000,000.00) 

2. Development Bank of the Philippines - Five Hundred Million Pesos 

(P500,000,000.00) 

3. TLRC - Seventy Million Pesos (P70,000,000.00) 

4. Small Business Guarantee and Finance Corporation - Fifty Million Pesos 

(P50,000,000.00) 

d. Previous loans which have been bridge-financed under the Program by other Funding 

Sources prior to the issuance of this IRR shall be taken out by GFI/GOCC Funding Sources 

mentioned in subsections (b) and (c) of this Section, upon compliance with their respective 

loan requirements. Should the said loans be unable to meet the loan requirements set by the 

GFI/GOCC Funding Sources, they may be funded from other Funding Sources subject to 

the approval of the Office of the President. These other Funding Sources are those that 

primarily fund projects supportive of SMEs, including support services, which are developmental 

in nature but not necessary income generating. 

e. As part of the Program Funds delivery system, loan applications flow shall follow the 

procedure described below: 

1. The borrower shall identify projects eligible for funding under these guidelines.



2. The DTI Provincial and/or Regional Office may assist the borrower in preparing 

the business plan and other documentary requirements of the Program. For 

this purpose, the Program shall use a unified set of application forms. 

3. The borrower shall submit the project loan applications to the GFI and/or Conduit 

as the case may be. The borrower shall inform the DTI Provincial and/or 

Regional Office of the GFIs and/or Conduits that received the applications; and 

4. The GFI shall receive loan applications and submit regular status reports to 

include the number of loan applications received, approved, and released. In the 

interest of prompt processing of loan applications, the GFI shall be given thirty 

(30) days from receipt of complete documents within which to approve or deny 

an application and shall duly inform the borrower and the ìIsang Bayanî Committee 

of the action taken in the application. 

SECTION 4. Program Policy-Making and Implementation - Policies of the Program 

shall be made under the direction, supervision and control of the Office of the President, as 

assisted by the Secretary of Trade and Industry. 

SECTION 5. Department of Trade and Industry as Lead Agency - The DTI shall be the 

lead agency of the Program. As the lead agency of the Program, the DTI, through its 

Regional and/or Provincial Offices, shall undertake the following: 

a. Coordinate with LGUs, Funding Sources and eligible SMEs to accomplish the objective 

of the Program; 

b. After a review of the economic factors in each city or municipality and coordination 

with LGUs, identify a product or service for each city, municipality that an SME must provide 

to be eligible to avail of the loan under the Program; 

c. Coordinate with and assist the local government of the city or municipality, as the 

case may be, in screening and identifying eligible SMEs, in accordance with Program 

guidelines; 

d. In cooperation with the DAR, DA, DOST, TESDA and TLRC, provide technical and/ 

or technological assistance to eligible SMEs in relation to project proposals, business plans 

and documentation required for application and availments of loans under the Program; 

e. Monitor performance of SMEs who availed of loans under the Program; and 

f. Submit an annual review and report on the progress and development of the Program 

to the President of the Philippines within thirty (30) days from the end of each calendar year. 

SECTION 6. Creation of ìIsang Bayanî Committee. To ensure coordination among the 

various agencies, the ìIsang Bayanî Committee, hereinafter referred to as the ìIBCî, is 

hereby created and shall be composed of the following offices as members: 

Chair : Office of the Secretary, DTI 

Members : Presidential Management Staff, Office of the President


: Regional Operations Group, DTI 

: Bureau of SME Development, DTI 

: Representatives of the Funding Sources 

SECTION 7. Functions and Responsibilities of the IBC - The IBC shall exercise the 

following functions and responsibilities: 

a. The IBC shall be the recipient of all reports under the Program and shall keep track of all 

loan applications to GFIs. 

b. The IBC shall ensure that there will be no double applications or availment. 

c. The IBC shall keep a list of all loans submitted to the GFIs. Relative to this, the GFIs shall 

submit a monthly report of loan application releases and denials to the IBC, as provided 

under Section 3 (e) (4) hereof. 

d. The IBC shall recommend systems and procedures to simplify documentary requirements 

for the Program. 

e. The IBC shall undertake a quarterly review of the policies and guidelines of the Program, 

and make the necessary recommendations to the President of the Philippines to enhance 

Program implementation. 

f. The IBC shall perform all other functions and responsibilities as may be necessary, proper 

or incidental for the effective coordination and implementation of EO No. 176 and these IRR. 

SECTION 8. Effectivity - These IRR shall take effect fifteen (15) days after its publication 




(SGD.) MANUEL A. ROXAS II 

Secretary 

--o0o-- 

Joint DTI-DOST Department Administrative Order No. 02 

Providing Implementing Rules and Regulations on 

Electronic Authentication and Electronic Signatures 

Whereas, the State recognizes the vital role of information and communications technology 

in nation building, as well as its own obligation to ensure network security, connectivity 

and neutrality of technology for the national benefit; 

Whereas, Section 29 of R.A. 8792 (Electronic Commerce Act of 2000) mandates the 

Department of Trade and Industry (DTI) to direct and supervise the promotion and develop-



ment of electronic commerce in the Philippines with relevant government agencies, without 

prejudice to the provisions of Republic Act 7653 (Charter of Bangko Sentral ng Pilipinas) 

and Republic Act 8791 (General Banking Law of 2000); 

Whereas, the issuance of clear, transparent, predictable and enforceable rules to 

clarify and ensure the legal validity of enforceability of electronic signatures and contracts 

will encourage and promote the development of electronic commerce in the Philippines, 

enhance its competitiveness in the new economy, protect the consumer, and encourage 

efficiency and transparency in commercial transactions; 

Whereas, technological developments in electronic authentication and modes of generating 

electronic signatures are rapid, ongoing and market-led; 

Whereas, rules and guidelines on electronic signatures and contracts that are technology-neutral 

will help ensure continued private sector initiative and innovation, and encourage 

consumer trust in these new technologies; 

And finally, recognizing that where appropriate, market-driven, rather than government-imposed 

standards, contractual arrangements and codes of practice are better tools 

for validating electronic transactions and developing user confidence in global electronic 

commerce; 

Now, therefore, pursuant to the provisions of Sections 24 and 29 of Republic Act No. 

8792, otherwise known as the Electronic Commerce Act of 2000 (hereinafter referred to as 

the ìActî), the following Implementing Rules and Regulations on Electronic Authentication 

and Electronic Signatures (hereinafter referred to as the ìRulesî) are hereby prescribed and 

promulgated for the compliance of all concerned: 

SECTION 1. General Rule of Validity - As a general rule, and subject to the provisions 

of the Electronic Commerce Act of 2000 and these Rules: 

a. A signature, contract or other record relating to such transaction may not be 

denied legal effect, validity, or enforceability solely because it is in electronic 

form; and 

b. A contract relating to such transaction may not be denied legal effect, validity, 

or enforceability solely because an electronic signature or electronic document 

was used in its formation. 

SECTION 2. Scope of Application - These Rules apply where electronic signatures 

and/or electronic documents are used in the context of any commercial and non-commercial 

transaction, activity or dealings, whether public or private, occurring between and among 

parties. These include, and are not limited to, the following transactions: the sale, supply, 

procurement or exchange of goods or services, including the manufacture, processing, 

purchase, sale, supply, procurement or exchange of goods or services, including the manufacture, 

processing, purchase, sale, supply, distribution or transacting in any manner, of 

tangible and intangible property of all kinds such as commodities, goods, merchandise, 

financial and banking products, patterns, participations, shares of stock, software, books, 

works of art and other intellectual property; distribution agreement; commercial representation 

or agency; the filing and payment of taxes; factoring; leasing; construction of works;


consulting; engineering; licensing; investment; financing; banking; insurance; exploitation 

agreement or concession; joint venture and other forms of industrial or business cooperation 

and carriage of goods or passengers by air, sea, rail or road. 

SECTION 3. Definitions - For the purposes of these Rules: 

a. ìAsymmetric or public cryptosystemî is a type of signature creation technology and 

refers to a system capable of generating a secure key pair, consisting of a private key for 

creating a digital signature, and a public key for verifying the digital signature. 

b. ìCertificateî means an electronic document issued to support a secure electronic signature 

which purports to confirm the identity or other significant characteristic of the person 

who, in the case of digital signatures, holds a particular key pair or, in other cases, such 

signature creation or verification device or method as may be applicable under the circumstances. 

c. ìCertification authorityî is a type of information certifier which, in the course of its 

business, engages in issuing certificates in relation to cryptographic keys used for the 

purposes of digital signatures. 

d. ìDigital Signatureî is a type of secure electronic signature consisting of a transformation 

of an electronic document or an electronic data message using an asymmetric or public 

cryptosystem such that a person having the initial untransformed electronic document and 

the signerís public key can accurately determine: 

i. whether the transformation was created using the private key that corresponds 

to the signerís public key; and 

ii. whether the initial electronic document had been altered after the transformation 

was made. 

e. ìElectronic agentî means a computer program or an electronic or other automated 

means used independently to initiate an action or respond to electronic messages or documents, 

in whole or in part, without review or action by an individual at the time of the action or 

response. 

f. ìElectronic authority signatureî refers to an electronic signature that establishes the 

authority, position or attribute of the signer as the duly authorized proxy, agent or representative 

of another person, and therefore, by such signature to bind the latter as if he had 

created and/or issued the electronic signature himself. 

g. ìElectronic data messageî refers to information generated, sent, received or stored by 

electronic, optical or similar means. 

h. ìElectronic documentî refers to information or the representation of information, data, 

figures, symbols or other modes or written expression, described or however represented, 

by which a right is established or an obligation extinguished, or by which a fact may be 

proved and affirmed, which is received, recorded, transmitted, stored, processed, retrieved 

or produced eletronically. It includes documents signed with secure electronic signatures



and any print-out or output, readable by sight or other means, which accurately reflects the 

electronic data message or electronic document. For purposes of these Rules, the term 

ìelectronic documentî may be used interchangeably with ìelectronic data message.î 

i. ìElectronic signatureî refers to any distinctive mark, characteristic and/or sound in 

electronic form, representing the identity of a person, and attached to or logically associated 

with the electronic data message or electronic document or any methodology or procedures 

employed or adopted by a person and executed or adopted by such person with the intention 

of authenticating or approving an electronic data message or electronic document or any 

methodology or procedures employed or adopted by a person and executed or adopted by 

such person with the intention of authenticating or approving an electronic data message or 

electronic document. For purposes of these Rules, electronic signatures include digital signatures 

and secure electronic signatures. 

j. ìInformation and communication systemî refers to a system intended for and capable 

of generating, sending, receiving, storing or otherwise processing electronic data messages 

or electronic documents and includes the computer system or other similar device by or in 

which data is recorded or stored and any procedures related to the recording or storage of 

electronic data message or electronic document. 

k. ìInformation Certifierî means any person who, or entity which, in the course of its 

business, issues certificates as a means of providing identification services and/or certifying 

information which are used to support the use of and trust in secure electronic signatures. 

For purposes of these Rules, the term ìinformation certifierî includes but is not necessarily 

limited to certification authorities. 

l. ìKey Pairî in asymmetric cryptosystem refers to the private key and its mathematically 

related public key such that the latter can verify the digital signature that the former creates. 

m. ìPersonî means any natural or juridical person including, but not limited to, an individual, 

corporation, partnership, joint venture, unincorporated association, trust or other juridical 

entity, or any governmental authority. 

n. ìPrivate Keyî refers to the key of a key pair used to create a digital signature. 

o. ìPublic Keyî refers to the key pair used to verify a digital signature. 

p. ìSecure Electronic Signatureî means an electronic signature which is created and can 

be verified through the application of a security procedure or combination of security procedures 

that ensures such electronic signature; 

a. is unique to the signer; 

b. can be used to identify objectively the signer of the data message 

c. was created and affixed to the data message by the signer or using a means 

under the sole control of the signer; and 

d. was created and is linked to the data message to which it relates in a manner 

such that any change in the data message be revealed. 

For purposes of these Rules, secure electronic signatures includes but is not necessarily 

limited to digital signatures.


q. ìSignature creation device, method or technologyî refers to any device, method or 

technology used to create an electronic signature in respect of which it can be shown, 

through the use of a security procedure or method, that such signature (a) is unique to the 

signer for the purpose for which it is used; (b) was created and affixed to the data message 

by the signer or using a means under the sole control of the signer; and (c) was created and 

is linked to the electronic data message to which it relates in a manner which provides 

reliable assurance as to the integrity of the message. 

r. ìSignerî means the person who uses, creates and affixes an electronic signature to an 

electronic data message. 

SECTION 4. Technological Neutrality - None of the provisons of these Rules shall be 

applied so as to exclude, restrict, or deprive of legal effect any method of electronic signature 

that satisfies the requirements referred to in Section 8 of the Act, or in Rule 5 of these 

Rules which is as reliable as was appropriate for the purpose for which the data message 

was generated or communicated, in the light of all the circumstances, including any relevant 

agreement. 

SECTION 5. Legal Recognition of Electronic Signatures - An electronic signature on 

the electronic document shall be equivalent to the signature of a person on a written document 

if that signature is proved by showing that a prescribed procedure, not alterable by the 

parties interested in the electronic document, existed under which: 

a. A method is used to identify the party sought to be bound and to indicate said 

partyís access to the electronic document necessary for his consent or approval 

through the electronic signature; 

b. Said method is reliable and appropriate for the purpose for which the electronic 

document was generated and communicated, in the light of all circumstances, 

including any relevant agreement; 

c. It is necessary for the party sought to be bound, in order to proceed further 

with the transaction, to have executed or provided the electronic signature; and 

d. The other party is authorized and enabled to verify the electronic signature, 

and to make the decision to proceed with the transaction authenticated by the 

same. 

The parties may agree to adopt supplementary or alternative procedures provided that 

the same are not contrary to law or public policy. 

SECTION 6. Authority Signatures - None of the provisions of these Rules shall be 

applied so as to exclude, disallow, or deprive electronic authority signatures, as defined in 

Section 3 above, of legal effect and validity. 

SECTION 7. Electronic Agents - A contract or other record relating to a transaction 

may not be denied legal effect, validity, or enforceability solely because its formation, creation, 

or delivery involved the action or operation of one or more electronic agents so long as 

such electronic agent is under the control of, or its action or operation is legally attributable 

to the person sought to be bound.



SECTION 8. Liability for unauthorized use of secure electronic signatures - Where 

the use of a secure electronic signature was unauthorized and the purported signer did not 

exercise reasonable care to avoid the unauthorized use of the signature or to prevent the 

addressee from relying on such a signature, the signature shall nevertheless be regarded as 

that of the purported signer, unless the relying party knew or should have known that the 

signature was not that of the purported signer. 

SECTION 9. Responsibilities of an information certifier - An information certifier 

shall: 

a. act in accordance with the representations it makes with respect to its practices; 

b. excercise due diligence to ensure the accuracy and completeness of all material representations 

it makes that are relevant to the life-cycle of its certificates or which are included 

in its certificates; 

c. provide reasonably accessible means which enable a relying party to ascertain: 

i. the identity of the information certifier; 

ii. that the person who is identified in the certificate holds, at the relevant time, the 

signature device referred to in the certificate; 

iii. the method used to identify the signer, provided however the information certifier 

shall not be required to reveal any of its trade or industrial secrets; 

iv. any limitations on the purposes or value for which the signature device may be 

used; and 

v. whether the signature device is valid and has not been compromised; 

d. Provide reasonably accessible means for signer to give notice that a signature device has 

been compromised and ensure the operation of a timely and secure revocation service; and 

e. Utilize trustworthy systems, and procedures in performing its services. 

f. Engage trustworthly personnel who possess the expert knowledge, experience and qualifications 

necessary for its services, in particular, but not limited to, expertise in electronic 

signature technology and familiarity with proper security procedures; 

g. Maintain sufficient financial resources to operate as an information certifier and to bear 

the risk of potential liability for damages; 

h. Record, whether electronically or not, for an appropriate period of time all relevant information 

concerning issued certificates for, but not limited to, the purpose of providing evidence 

of certification in legal proceedings; 

i. For purposes of issuing and maintaining a certificate, collect and utilize personal data only 

insofar as it is necessary for the purpose of issuing and maintaining the certificate. Such


data may not be collected, sold, distributed, processed or used for any other purpose without 

the express consent of the data subject. 

An information certifier shall be liable for damages caused by its failure to satisfy the 

requirements provided under this and the following Rules. 

SECTION 10. Certificate Requirements - At a minimum, certificates shall state: 

a. the identify of the information certifier; 

b. that the person who is identified in the certificate holds, at the relevant time, the signature 

device referred to in the certificate; 

c. that the signature device was effective on the date when the certificate was issued; 

d. an indication of the beginning and end of the period of validity of the certificate; 

e. where applicable, any limitation on the purposes or value for which the certificate may be 

used; and 

f. any limitation on the scope or extent of liability that the information certifier accepts, or 

alternatively, information of where such limitations on the scope or extent of liability, if any, 

may be found. 

SECTION 11. Liability for incorrect or defective certificates - If damage has been 

caused as a result of the certificate being incorrect or defective, the information certifier 

shall be liable for damage suffered by either: 

a. the party who has contracted with the information certifier for the provision of a 

certificate; or 

b. any person who reasonably relies on a certificate issued by the information 

certifier as regards the fact that the certificate complies with all the requirements 

for a certificate, and as regards the truth and accuracy, at the time of the issuance 

of the certificate, of all information and representations contained in the 

certificate. 

In assessing the loss, regard shall be had to the following factors: 

a) the amount of damages caused by the incorrect or defective certificate; 

b) the cost of obtaining the certificate; 

c) the nature of the information being certified; 

d) the existence and extent of any limitation on the purpose for which the certificate 

may be used; 

e) the existence of any statement limiting the scope or extent of the liability of the 

information certifier;



f) any contributory conduct by the relying party; and 

g) any other relevant factor. 

SECTION 12. Voluntary accreditation - A certificate shall be presumed to bind a 

secure electronic signature to the signerís identity if the certificate was issued by an information 

certifier duly accredited by the Department of Trade and Industry (DTI), in coordination 

with the Department of Science and Technology (DOST), which shall apply commercially 

appropriate and internationally recognized standards covering the trustworthiness of 

the information certifierís technology, practices and other relevant characteristics. A nonexhaustive 

list of bodies or standards that comply with this paragraph may be published from 

time to time by the DTI jointly with the DOST. 

This Rules shall not be applied so as to exclude or prevent the validity of a certificate 

issued by a non-accredited information certifier where such certificate is shown to have 

otherwise been issued in accordance with commercially appropriate and international recognized 

standards, or where sufficient evidence indicates that the certificate accurately 

binds the secure electronic signature to the signerís identity. 

SECTION 13. Responsibilities of the signer - Each signer shall: 

a. Exercise reasonable care to avoid unauthorized use of his electronic signature and/or 

signature creation device; 

b. Notify appropriate persons, including the concerned information certifier, without undue 

delay if: 

i. the signer knows that the private key or other signature creation device has 

been exposed or revealed to unauthorized persons, or that his electronic signature 

has been compromised; or 

ii. the circumstances known to the signer give rise to a substantial risk that his 

electronic signature may have been compromised; 

c. A signer shall be liable for damages caused by failure to satisfy the requirements provided 

under this Rule. 

SECTION 14. Reliance on electronic signatures - 

a. A person shall rely on an electronic signature only to the extent that it is reasonable to do 

so. If reliance on the electronic signature is not reasonable in the circumstances having 

regard to the factors enumerated below, a relying party assumes the risk that the signature is 

not a valid signature. 

b. In determining whether it was reasonable for a person to have relied on the electronic 

signature, regard shall be had, if appropriate, to: 

i. the nature of the underlying transaction that the electronic signature was intended 

to support;


ii. whether the relying party, where warranted, has taken appropriate steps to 

determine the realiability of the electronic signature; 

iii. whether the relying party took steps to ascertain whether the signature was 

supported by a certificate. 

iv. whether the relying party knew or ought to have known that the electronic 

signature device had been compromised or revoked; 

v. any agreement or course of dealing which the relying party has with the signatory 

or subscriber, or any trade usage or practice which may be applicable; 

vi. any other relevant factor. 

SECTION 15. Recognition of foreign certificates and electronic signatures - 

a. In determining whether, or the extent to which, a certificate or an electronic signature is 

legally effective, no regard shall be had to the place where the certificate or the electronic 

signature was issued, nor to the country in which the issuer had its place of business. 

b. Parties to commercial and other transactions may specify that a particular information 

certifier or supplier of certification services, class of suppliers of certfication services or 

class of certificates must be used in connection with messages or signatures submitted to 


c. Where parties agree, as between themselves, to the use of certain types of electronic 

signatures and certificates, that agreement shall be recognized as sufficient for the purpose 

of cross-border recognition. 

SECTION 16. Reciprocity - All benefits, privileges, advantages or statutory rules established 

under these Rules shall be enjoyed only by parties whose country of origin grants 

the same benefits and privileges and advantages to Filipino citizens. 

SECTION 17. Variation by agreement - Unless otherwise provided by law, contracting 

parties may derogate from or modify these Rules by agreement. 

SECTION 18. Interpretation - Unless otherwise expressly provided for, in the interpretation 

of these Rules, due regard is to be given to their international origin and to the need to 

promote uniformity in their application and the observance of good faith in international trade 

relations. The generally accepted principles of international law and convention on electronic 

commerce shall likewise be considered. 

SECTION 19. Separability - If any provision in these Rules or application of such 

provision to any circumstance is held invalid, the remainder of these Rules shall not be 

affected thereby. 

SECTION 20. Effectivity - These Rules shall take effect after fifteen (15) days following 

the completion of their publication in the Official Gazette or in a newspaper of general 

circulation in the Philippines.



Adopted: 28 Sept. 2001 

(SGD.) MAR ROXAS 

Secretary 

Department of Trade and Industry 

(SGD.) ESTRELLA F. ALABASTRO 

Secretary 

Department of Science and Technology 

DEPARTMENT OF TRANSPORTATION AND 

COMMUNICATIONS 


Department Order No. 2003-37 

Roadside Inspection of Motor Vehicles 

Pursuant to Section 1 of Rule XXV of the DENR Administrative Order No. 2000-81 

ìImplementing Rules and Regulations for R.A. 8749î, vehicles found to have emitted excessive 

smoke versus the emission standard set forth in the subject law while operating in any 

public highway shall be apprehended. Upon payment of fines and penalties mandated in 

Section 2 of Rule LV of that Order, release of vehicle license plate and/or confiscated 

certificate of registration in case of third offense committed within 365 days from the first 

offense shall only be allowed upon presentation of a Certificate of Emission Compliance 

(CEC) attesting that subject vehicle is in compliance with the emission standard. Moreover, 

public transport vehicles shall have the option to submit the vehicle for emission test at the 

LTO emission testing facilities. 

Any issuance which is inconsistent herewith is hereby modified accordingly. 

This Order shall take effect fifteen (15) days following its publication in a newspaper of 

general circulation or submission of three (3) copies hereof with the UP Law Center. 



(SGD.) LEANDRO R. MENDOZA 

Secretary 

--o0o--


Memorandum 

Accountable Certificate of Emission Compliance (CEC) Forms 

Consistent with certain provisions of the Clean Air Act (CAA) and its Implementing 

Rules and Regulations (IRR) and in order to avoid the proliferation of unauthorized or fake 

CEC forms, all LTO Regional and District Offices are hereby ordered to honor emission test 

result reflected in the accountable forms duly prescribed and issued by DOTC only. To avoid 

operational conflicts, PETC operators are hereto advised to issue the emission test results in 

the prescribed CEC form. Issuances not in the prescribed forms are considered not valid as 

documentary requirements for renewal of vehicle registration. A proforma is hereto attached* 

for ready reference. 

Be informed that the distribution of the accountable CEC forms shall be centralized at 

the Interagency PETC Monitoring Committee with office address at DOTC 16th floor, Columbia 

Tower, Ortigas Avenue, Mandaluyong City at production cost only. Further, the number of 

CEC to be issued to a PETC shall be based on the transactions previously handled and as 

reported to LTO-MID. 

This Memorandum shall take effect fifteen (15) days following its submission of three 

(3) copies thereof with the UP Law Center or publication in a newspaper of general circulation. 



(SGD.) ARTURO T. VALDEZ 


Chairman, DOTC PETC Monitoring Committee 

--o0o-- 


Revocation of Department Order Nos. 2002-26, 2002-46 

and Special Order No. 2002-47 

In compliance with the Directives on Sea Accidents, issued by Her Excellency President 

Gloria Macapagal-Arroyo on 02 June 2003, as reiterated by PGMA during the briefing 

conducted on the Updates on the Presidential Directives on 06 August 2003 held at the 

Philippine Coast Guard Headquarters, and after due deliberation and approval of the MA- 

RINA Board, DOTC Department Order No. 2002-26 on the Rules and Regulations in the 

Implementation of the DOTC Department Order No. 2002-46 issued on 17 October 2002 and 

Special Order No. 2002-47 dated 15 October 2002 on the Creation of the MARINA-PCG- 

PPA Joint Inspection Task Force are hereby revoked.



The Philippine Coast Guard (PCG) shall thereby continue to undertake the conduct of 

safety inspection of all types and sizes of transport watercrafts/ships carrying passengers 

and/or cargoes in the domestic trade. 

The PCG shall submit to this Department a Report of Ships Inspected and action/s 

taken on the deficiencies noted, if any, every 15th day of the month. 





Secretary 

--o0o-- 


Revised Rules and Regulations to Implement 

Executive Order No. 170-A Expanding the Coverage 

of the Road Roll-On/Roll-Off Terminal System (RRTS) 

In order to fully achieve the objectives of Executive Order No. 170 dated 22 January 

2003, and pursuant to Section 4 of Executive Order No. 170-A dated 09 June 2003 and 

Executive Order No. 125, as amended, DOTC Department Order No. 2003-16 dated 03 

March 2003 on the Rules and Regulations to Implement Executive Order No. 170 Promoting 

Private Sector Participation and Investment in the Development and Operation of the RRTS 

is hereby ordered amended/revised, as follows: 

Rule III. Sec. 1. Road RO-RO Ferry Terminal System (RRTS) shall refer to the 

network of terminals all over the country, regardless of the distance covered 

and linked by RO-RO ships. 

Rule III. Sec. 4. RRTS Water Transport Provider is hereby amended to refer to 

a RRTS Shipping Service Provider who is required to secure a Certificate of 

Public Convenience (CPC)/Provisional Authority/Special Permit from the Maritime 

Industry Authority (MARINA) to operate as such. 

...xxx... 

A new Section 5 under Rule IV is hereby added: 

Rule IV. Sec. 5. The DPWH and the LGUs shall endeavor to provide adequate 

road access to the RRTS Terminals in order to link such terminals to the municipal, 

provincial and national road networks. 

...xxx..


Rule V. Sec. 2. The RRTS toll shall be applicable to: 

2.1 All self-powered vehicles loaded and discharged on their own wheels by 

their owners or drivers between a ro-ro ship and shore via a ramp; and 

2.2 All ro-ro ships to the extent that they are actually engaged in ro-ro operations 

as defined in Sec. 1 (a) of Executive Order No. 170. 

In the above cases, cargo handling charges shall not be collected, unless actual 

work is done or performed by the cargo handler. 

A new Section 3 under Rule V is hereby added: 

Rule V. Sec. 3. Within six (6) months from initial operations, the RRTS Shipping 

Service Provider and the RRTS Terminal Operator shall provide for a 

single toll booth for the collection of the RRTS Toll. A system of distribution of 

the share of each party to the collections at the toll booth shall be so established. 

...xxx... 

The original Section 3 of Rule V is hereby renumbered and modified as 

follows: 

Rule V. Sec. 4. The Freight or Rolling Cargo Fee based on lane meter, as 

herein classified, and the Passage Fee, except for Third Class Accommodation, 

shall be deregulated. The procedures and conditions for the initial adoption 

and subsequent upward or downward adjustment of deregulated rates, including 

the instances enumerated under Rule IX.1 and 2, and all applicable provisions 

of MARINA Memorandum Circular No. 153 on the Revised Rules and 

Regulations Implementing Deregulation of Domestic Shipping Rates are hereby 

incorporated by reference. 

A new Section 5 in Rule V is hereby added as follows: 

Rule V. Sec. 5. Deregulated freight rates based on lane meter as defined in 

Rule III. Sec. 15 shall be accordingly classified by the RRTS Shipping Service 

Provider using the actual measurements of the vehicles, as shown in the list 

below for certain standard vehicle types: 

Above 2-3 LANE METERS (LM) 

CATEGORY BY LANE METER AND VEHICLE TYPE 

2.08 L.M.- Motorcycle 

Motorcycle with side car 

Bicycle 

Bicycle with side car



Above 3-4 

LM 

3.15 - Minica/Volkswagen/Bantam Car 

Small Roller 

3.35 - Forklift (Less than 5 tonner) 

3.53 - Jeep (Owner Type) 

Above 4-5 

4.07 - Crane without Boom 

4.16 - Mini Van (Fiera, Tamaraw) 

4.17 - Dodge, Toyota, Corolla/Crown 

4.4 - Jeepney (PUJ/pax cop 8-14) 

4.48 - Isuzu KB, Nissan Patrol, Dodge Land Rover 

4.63 - Hi-Ace 

4.69 - Truck (4 wheeler) 

4.7 - Heavy car - Mercedes Benz/Ford Cortina 

4.72 - Toyota Coaster 

4.96 - Pick-up (Toyota Hi-lux, Datsun) 

Above 5-6 

LM 

5.2 - Big Road roller 

5.3 - Small Bulldozer 

5.63 - Truck (6- wheeler prime mover) 

5.945 - Light Van (4 wheeler) 

Above 6-7 

LM 

6.36 - Payloader, Backhoe w/o canopy 

6.49 - Jeepney (PUJ/pax. Cap 20) 

6.56 - Big Bulldozer 

6.815 - Gradler (Less 30% heavy equipment rate) 

Above 7-8 

LM 

7.25 - Truck (Prime Mover - 10 wheeler) 

7.85 - Grader (Heavy Equipment on piggy back on trailer) 

8 - Jeep - Mini Cruiser 

Above 8-9 

LM 

8.445 - Truck (10 wheeler -short chassis) 

8.69 - Dumptruck (10 wheeler) 

9 - Mini Bus 

Above 9-10 

LM 

9.25 - 20 ft. containers 

9.35 - Crane with Boom 

9.47 - Dumptruck (12 wheeler)


Above 10 

11 LM 

10.445 - Truck (6 wheeler - short) 

11 - Big Bus 

Above 11 

12 LM 


11.975 - Truck (6 wheeler - long) 


11.99 - Truck (10 wheeler - long chassis) 

The original Secs. 2 to 5 of Rule V are hereby renumbered accordingly. 

--xxx--- 

Additional Sections are hereby inserted under Rule VII, thus: 

Rule VII. Sec. 1.4. The filing fees for new Applications for Certificate of Public 

Convenience (CPC/Provisional Authority (PA)/Special Permit (SP) for the operation in the 

RRTS shall be accordingly reduced by twenty (20) percent from the regular fees charged. 

For existing roro ships which shall add new link/s to service the RRTS, the charges for 

route amendment in the specific new link/s created to service the RRTS, is hereby waived. 

Rule VII. Sec. 1.5. The authority and responsibility of the Master of the ro-ro ship in 

the determination of the safe loading capacity of the cargo deck is hereby reiterated, in the 

interest of safety, the final decision on what vehicles to load or not shall lie with the 

Master. 

Rule VII. Sec.1.6 The Shipís crew shall, at all times possess valid documents like 

the Seamanís Identification Record Bool (SIRB), Qualification Document Certificate (QDC) 

or the 1995 STCW Certificate, as appropriate. 

Rule VII. Sec. 1.7. The shipís crew shall undergo training on customer service, wear 

proper and prescribed uniforms when on duty and shall observe proper conduct towards 

passengers at all times. 

The original Sections 1.4 to 1.7 of Rule VII are hereby renumbered accordingly. 

A new Rule VIII is hereby inserted: 

Rule VIII 

INCENTIVES TO OPERATORS 

SECTION 1. Within thirty days from date hereof, the Department of Transportation 

and Communications (DOTC) and the Department of Trade and Industry (DTI) shall submit 

to the Office of the President, for approval, additional incentives to ship and terminal 

operators in the pioneering, missionary, developmental or underdeveloped routes or links.



SECTION 2. As incentives and protection of investment in terminal facilities in underdeveloped 

areas, the RRTS Shipping Service Provider/RRTS Terminal Operator shall, 

on a first come, first serve basis, be allowed to develop/construct and operate RRTS 

terminal facilities within the city or municipality for a period of 25 years which may be 

renewed for another 25 years, subject to the requirement of foreshore lease agreement 

from DENR and pertinent laws and PPA regulation. Similarly, the RRTS Shipping Service 

Provider/RRTS Terminal Operator shall enjoy all the benefits and privileges provided for 

under the liberalized policy of operations of private ports/terminals of the PPA, including 

the collection of appropriate deregulated tariffs for providing such facilities and services. 

A new Rule IX is hereby inserted: 

1. RRTS RO-RO Ship 

--xxx-- 

Rule IX 

RRTS Service Standards 

Pursuant to Sec. 1.5 of Rule VII of E.O. 170, all RO-RO ships operating in the RRTS 

shall comply with the minimum standards under MARINA Memorandum Circular Nos. 65/ 

65A and 150 and their subsequent amendments. Additionally, they shall comply with the 

following service standards: 

1.1 Considering that ro-ro ships operating in the RRTS are part of a chain of 

synchronized land and sea operations, they shall strictly observe their latest 

MARINA-authorized and published schedule; 

1.2 The ro-ro ship shall be provided with suitable ramps which are designed 

and constructed for the safe and efficient loading and discharging operations at 

the RRTS Terminals; and 

1.3 For reasons of safety and security, separate embarkation and disembarkation 

lanes shall be provided for passengers. Only authorized personnel, activities 

and services shall be allowed onboard. A Ship Security Officer shall thereby 

be designated from the existing manning complement of the ro-ro ship for this 

purpose. 

2. RRTS Terminals 

1.1 Whenever possible, a dedicated terminal/lane shall be allocated to the 

RRTS Shipping Service Provider; 

1.2 A quick method for the determination of the appropriate lane meter classification 

of all rolling vehicles or cargoes shall be established; 

1.3 A covered passenger terminal/waiting area shall be provided with passenger 

seating accommodation, amenities for babies and disabled passengers, as 

well as, sufficient comfort rooms;


1.4 Appropriately designed ro-ro ramps shall be provided such that the terminal 

can safely and efficiently service the ro-ro ships docking thereat at varying tide 

levels;í 

1.5 Sufficient marshalling area shall be provided to accommodate the lane 

meter capacity of the ro-ro ships docking at the RRTS Terminals; 

1.6 A toll booth shall be provided at the entrance of the marshalling area in 

order to facilitate the ìOne Stop, One Paymentî procedure; and 

1.7 Appropriate security measures shall be maintained at all times within the 

terminal to ensure the safety and security of the passengers. 

The original Rule VIII to XVI are hereby renumbered accordingly. 

Rule XIX. This Department Order shall take effect immediately after its publication 

once in a newspaper of general circulation in the Philippines. 

Rule XX. This revised rules, including the DOTC Department Order No. 2003-16 on 

the implementing rules and regulations of EO 170, shall be reviewed every six (6) months 

from date hereof. Any further amendments or modifications therein shall be effected after 

due consultation with the affected sectors.î 




Secretary 

--o0o-- 


Guidelines for Preventing Excess Passengers and Unauthorized 

Persons on Board Domestic Vessels Amending DOTC DO 2000-25 

I 

Purpose 

To prescribe policies for preventing excess passengers and unauthorized persons on 

board domestic passenger vessels. 

II 

Scope 

This Department Order (DO) applies to all Philippine registered passenger vessels 

engaged in the domestic trade.



III 


Passenger - any person carried on board a ship except the Master of the vessel and 

members of the crew or other persons employed or engaged in any capacity on board a 

ship, a person on board and carried either because of the obligation laid upon the master to 

carry shipwrecked, distressed or other persons by reason of ìforce majeureî and a child 

under one year of age. 

Initial Passenger Manifest - list of passengers who have been issued with tickets for a 

particular voyage. 

Final Passenger Manifest - list of persons who actually boarded the vessel. 

Passenger Capacity - total number of accommodations per approved accommodation plan 

of the vessel. 

Total Authorized Passenger Capacity - total number of accommodations per approved 

accommodation plan of the vessel plus additional ten percent (10%) of passenger capacity. 

The ten percent (10%) additional capacity - total number of accommodations per approved 

accommodation plan of the vessel plus additional ten percent (10%) of passenger 

capacity. 

IV 

Policies 

A. The sole authority to grant permit to persons to be on board the vessel is the owner/ 

operator through the vessel Master. However, the authority shall be limited only to the authorized 

passenger carrying capacity of the vessel including the shipís crew. 

B. Selling of tickets on board the vessel is strictly prohibited and no person shall be allowed to 

board the vessel without a valid ticket except registered porters with proper identification 

assisting passengers carry their baggage. 

C. The master of the vessel and the ship owners/operators are held responsible in ensuring 

that there are no excess passengers or unauthorized persons on board the vessel during a 

voyage. 

D. The master of the vessel and the ship owner/operator are held responsible to effect 

disembarkation of unauthorized persons on board before the vesselís departure.Problems 

on disembarkation of unauthorized passengers [those refusing to disembark at the destination 

indicated in the ticket with the intent to proceed to another destination] may be referred 

to any law enforcement unit, as appropriate, considering its nature, i.e., in violation of ìconditions 

of contract of carriageî. 

E. Access of passengers to and from a vessel shall be controlled through a passenger 

terminal. The boarding area shall be designed to provide maximum and effective control of 

passengers prior to actual boarding.


F. Only registered and authorized porters wearing proper uniforms and properly identified by 

the security officers of the vessel are allowed to assist the passengers with their baggage 

when embarking and disembarking the vessel. 

G. Boarding Time: 

Actual boarding time for the passengers shall be based on the schedule as indicated 

on the vesselís Certificate of Public Convenience (CPC). Provisional Authority (PA) or Special 

Permit (SP). The shipping company may change the boarding time when deemed necessary 

as authorized but the said change should be communicated to the PCG unit not later 

than 24 hours prior to the desired change. It shall be posted at the boarding area and shall be 

properly disseminated by the company. 

V 

Procedures 

A. The shipping company shall inform the PCG in writing on the schedule of boarding 

(boarding time) in reference to the vesselís schedule of arrival/departure as indicated in its 

CPC, PA or SP. 

B. The initial passenger manifest using the prescribed format shall be submitted to the 

nearest PCG unit at least two (2) hours before the scheduled boarding time as deemed 

necessary by the PCG and as appropriate/applicable for vessels whose duration of stay in 

port are less than two hours. This is to give the PCG inspectors ample time to check the 

vessel to ensure that no unauthorized passengers are on board prior to the actual boarding. 

C. There will be no boarding of passengers before submission of the initial passenger manifest 

to the PCG. 

D. The purser or a designated shipping company representative shall be responsible in 

preparing the passenger manifest and ensuring that any authorized persons shall board the 

vessel. After ascertaining the correctness of the entries of the passenger manifest, the 

purser or the designated shipping company representative in the presence of the PCG 

inspector shall sign each page of the manifest to attest the veracity contained therein. 

E. Passengers shall only be allowed to board the vessel through the terminal or designated 

area and upon presentation to the shipping company representative of a valid ticket for the 

voyage. 

F. The PCG inspector may conduct random check of identities and tickets of persons on 

board, simultaneous with the inspection of spaces particularly crew cabin, engine room and 

other possible hiding places. 

G. In cases when there are excess passengers found by the PCG inspectors, the ship 

Master, Ship Owner and/or Operator shall disembark the excess passengers. The vessel 

cannot depart unless all excess passengers and unauthorized persons on board are disembarked. 

H. Immediately before departure of vessel, copies of the MOSD, signed by the Master of the 

vessel and the Final Passenger Manifest, signed by the purser or designated shipping com-



pany representative shall be submitted and both documents countersigned by the PCG 

inspector. 

VI 

Responsibilities 

A. The PCG shall monitor the compliance of the provisions of this Department Order by the 

shipowners, operators, and ship Masters. 

B. The shipowners, operators and ship Masters shall develop their own procedures in line 

with this Department Order to ensure that provisions of this Department order are strictly and 

effectively carried out. 

C. The Philippine Ports Authority (PPA) shall ensure the availability of passenger terminals 

and/or suitable temporary holding areas for passengers and barriers at the boarding area to 

ensure that no unauthorized persons will have the access to the vessel. 

VII 

Penalty Clause 

A. The following shall be considered as offenses and shall be assessed administrative fine as 

indicated: 

OFFENSE FINE 

1st offense 2nd offense 3rd offense 

1. Selling ticket on board P5,000.00 P10,000.00 P20,000 

per ticket sold per ticket sold per ticket sold 

2. Non-Accomplishment of the P10,000.00 P20,000.00 P30,000.00 

Passenger Manifest 

3. Wrong entries in the Passenger P10,000.00 P20,000.00 P30,000.00 

Manifest 

4. Allowing the boarding of unauthorized P30,000.00 P50,000.00 P100,000.00 

persons on or after the designated 

boarding time. 

5. Not posting the boarding time in P10,000.00 P20,000.00 P30,000.00 

the vicinity of the boarding area. 

6. Not posting the departure schedule P10,000.00 P20,000.00 P30,000.00 

in the vicinity of the departure area 

7. Posted departure schedule not in P10,000.00 P20,000.00 P30,000.00 

accordance with the CPC/PA/SP 

submitted to the PCG unit. 

8. Non-submission of current CPC/PA/ 

SP. P10,000.00 P20,000.00 P30,000.00 

9. Overcrowding/excess passengers Total amount of the cost of ticket of excess passengers plus 200% of 

total cost of the tickets of excess passengers.


B. In addition, the penalties of the MARINA-issued Flag State Administration Advisory (FSAA) 

Number 40 re ëIndemnity of P100,000.00 to Each Passenger Onboard Passenger-carrying 

Ships.í also applies. 

C. Furthermore, PCG shall recommend the imposition of stiffer penalties, which include 

suspension, revocation, and cancellation of relevant shipís certificates. 

VIII 

Repealing Clause 

All orders, circulars and other issuances inconsistent herewith are deemed amended 

or revoked. 

IX 

Effectivity 

This order shall take effect fifteen (15) days after publication in a newspaper of 

general circulation. 


Secretary 

ENERGY REGULATORY COMMISSION 


Amended Guidelines for the Implementation of the Reduction in 

Rate of the Electric Cooperatives Due to the Condonation of Debts 

Pursuant to Section 60 of Republic Act No. 9136 or the Act, Rule 31 of the Implementing 

Rules and Regulations (IRR) of the Act and Sections 5 and 6 of Executive Order (EO) No. 

119, the Energy Regulatory Commission (ERC) hereby adopts these Amended Guidelines to 

govern the application for rate reduction filed by the Electric Cooperatives (ECs). 

Article I 


These Guidelines shall have the following objectives: 

a. To lay down the general framework that will be used in evaluating the application for rate 

reduction; 

b. To provide a list of requirements for the approval of the application for rate reduction; 

c. To prescribe a procedure in the filing and approval of the application for rate reduction;



Article II 

Scope and Definition of Terms 

SECTION 1. Scope - In accordance with the program approved by the President of 

the Philippines, the PSALM shall assume all outstanding financial obligations of ECs to NEA 

and other government agencies incurred as of June 26, 2001 for the purpose of financing 

the Rural Electrification Program exclusively utilized for capital expenditures for the acquisition, 

construction, operation and maintenance, and/or expansion and rehabilitation of distribution, 

generation and Subtransmission Assets/facilities and pre-operating expenses for 

newly-established ECs and shall include the interests, surcharges and penalties on the Rural 

Electrification Loans, released from NEA and other government agencies to ECs as of 26 

June 2001, duly booked by NEA, validated by COA and confirmed by the ECs. 

Such outstanding financial obligations include loans contracted from the following government 

agencies: 

a. National Electrification Administration (NEA) 

b. Development Bank of the Philippines (DBP) 

c. Land Bank of the Philippines (LBP) 

d. Asset Privatization Trust (APT) now Privatization and Management Office (PMO); 

e. NPC, for loans on taken-over systems, excluding power bills; 

f. Department of Energy (DOE); and 

g. Local Government Units (LGUs) 

Provided, However, that such loans were contracted in accordance with NEA policies 

and with prior NEA authorization, except for loans transferred to APT, now PMO. 

SECTION 2. Definition of Terms - As used in these Guidelines, the following terms 

shall have the following respective meanings: 

a. ìActî shall refer to Republic Act No. 9136 which took effect on June 26, 2001; 

b. ìCommission on Auditî or ìCOAî refers to the constitutional body created under Section 

IX-D of the 1987 Constitution; 

c. ìDepartment of Energyî or ìDOEî refers to the government agency created pursuant to 

Republic Act No. 7638 whose expanded functions are provided in the Act; 

d. ìDepartment of Financeî or ìDOFî shall refer to the government agency created pursuant 

to Executive Order No. 127, as amended; 

e. ìElectric Cooperativeî or ìECî refers to a Distribution Utility organized pursuant to Presidential 

Decree No. 269, as amended or as otherwise provided in the Act; 

f. ìEnergy Regulatory Commissionî or ìERCî refers to the regulatory agency created by 

Section 38 of R.A. 9136; 

g. ìFinancing for Rural Electrificationî refers to those loans and grants extended to ECs, for 

the construction or acquisition, operation and maintenance of distribution, generation, and 

subtransmission facilities for the purpose of supplying electric service, and those loans for


the restoration, upgrading and expansion of such facilities, in areas which are considered 

rural at the time of the grant of such loans; 

h. ìNational Electrification Administrationî or ìNEAî refers to the government agency created 

under Presidential Decree No. 269, as amended, with additional mandate set forth in 

the Act; 

i. ìNational Power Corporationî or ìNPCî refers to the government corporation created 

under Republic Act No. 6395, as amended; 

j. ìPower Sector Assets and Liabilities Management Corporation 

or ìPSALM Corp.î or ìPSALMî refers to the corporation created pursuant to Section 49 of 

the Act; 

k. ìRural Electrification î refers to the delivery of basic electric services, consisting of power 

generation, subtransmission and/or extension of associated power delivery system that would 

bring about important social and economic benefits to the countryside; 

l. ìRural Electrification Loanî refers to financial obligations strictly incurred for Rural Electrification; 

m. ìRural Electrification Programî refers to the National Government plan to achieve total 

electrification of the countryside for the purpose of fostering economic development and 

uplifting the living standards of the Filipino people; 

Article III 

Data Requirements and Filing Procedure 

SECTION 1. Submission of Required Data - The EC shall submit the following documents 

to facilitate the evaluation of the application for rate reduction: 

a. Certification/s from NEA and/or other government agencies indicating the total amount 

approved for condonation and attesting that such loans have been used for Rural Electrification 

Program; 

b. Certification from COA attesting that the total amount applied for debt service condonation 

has been duly verified and found to be true and correct; 

c. Certification from the concerned EC confirming that the amount is due and outstanding; 

d. Certification from NPC attesting that the EC is current in the payment of its obligations or 

that the EC has a duly executed agreement with the NPC containing a sustainable payment 

arrangement; 

e. Certification from PSALM provisionally acknowledging the amount of loans applied for 

condonation subject to the final results of an audit to be performed by an independent body 

commissioned for such purpose; 

f. Detailed information or report on outstanding loans applied for condonation, such as:



1. List of outstanding loans obtained from creditors under Article II, Section 1 

hereof; 

2. Purpose for each loan; 

3. Date of approval of each loan; 

4. Total releases from each loan granted and date of such releases; 

5. Principal and interest payments made for each loan; 

6. Outstanding balance for each loan; 

7. Amortization payments on the Rural Electrification Loans; 

8. Data pertaining to its last approved rate adjustment whether provisional or final; 

9. Proceeds from Benefits to Host Communities in the form of grants or technical 

assistance pursuant to Chapter II, Sections 289 to 294 of the Local Government 

Code, if applicable; 

10. Monthly kilowatthour sales covering the period July 1, 2001 to June 30, 2002; 

11. Statement on debt restructuring of any loan, if any; 

12. Revenues generated from amortization portion of approved rates channeled 

to payments of purchased power cost, if applicable; 

13. Other documents that may be needed by the ERC in the course of the 

evaluation. 

SECTION 2. Procedure for Filing with ERC - Each EC, through its duly authorized 

representative, shall fill out an application form for rate reduction prescribed by the ERC. 

Copies of the accomplished application form shall be furnished the a.) Local Government 

Unit (LGU) Legislative Body of the city or municipality where the applicant principally 

operates, who shall issue a certification acknowledging receipt of the application; and b) the 

Editor or Business Manager of a newspaper of general circulation in the locality who shall 

issue a certification of the notice of publication of the application. 

The authorized representative of the EC shall file the verified application in six (6) 

copies together with a Board Resolution, indicating his authority to act on behalf of the EC, 

and the certifications referred to in the immediately preceding paragraph. 

The preceding paragraphs shall not preclude the electric cooperatives from filing 

joint or omnibus applications; Provided, that the conditions set herein are complied 

with. 

SECTION 3. Failure to File with ERC - In cases where the concerned electric 

cooperatives fail to file the applications without valid reasons, appropriate penalties


shall be imposed upon them pursuant to the ìGuidelines to Govern the Imposition of 

Administrative Sanctions in the Form of Fines and Penaltiesî and the ERC shall motu 

proprio reduce their rates commensurate with the savings due to the removal of the 

amortization payments of their loans using as basis their unbundling of rates applications 

and the supporting documents. 

SECTION 4. Grant of Provisional Authority - The ERC may approve provisionally, 

within seventy five (75) calendar days from the date of filing, the applications filed by the 

ECs for rate reduction, equivalent to the savings realized due to the removal of the amortization 

payments of the loans, based on the documents submitted in support of the application 

and the comments/pleadings which the consumers or the LGU concerned may have submitted 

within thirty (30) days from receipt of the copies of the application or from the publication, 

as the case may be; Provided, That the data required under items a, b, c, d and f (7) 

and f(10) of Article III, Section 1 hereof shall have been submitted. 

SECTION 5. Formal Hearing - The ERC shall conduct formal hearings on the applications, 

giving proper notices to all parties concerned, with at least one (1) public hearing in the 

affected locality. 

The notices of hearing shall be published at least twice for two (2) successive weeks in 

two (2) newspapers of nationwide circulation. 

SECTION 6. Issuance of Decision - The ERC shall issue a final decision on the 

application not later than twelve (12) months from the issuance of a provisional order, based 

on the required documents submitted pursuant to Article III, Section 1 hereof and the 

certification from PSALM that is has undertaken an independent audit, verified the purposes 

for which the debts have been incurred and confirmed that the amount applied for is true and 

correct. 

SECTION 7. Publication of Approved Rates - The ERC shall publish the approved 

rates in at least one (1) newspaper of general circulation and/or post electronically and 

circulate to all interested electric power industry participants. 

SECTION 8. Separate Item in End-Userís Bill - The approved reduction in rates shall 

be reflected as a separate item in the consumerís electric bills. 

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 immediately upon publication in a newspaper of 

general circulation in the country.



Adopted: 15 Nov. 2003 

(SGD.) LETICIA V. IBAY 

Acting Chairman 

(SGD.) MARY JANE B. COLAYCO (SGD.) OLIVER B. BUTALID 


(SGD.) CARLOS R. ALINDADA 

Commissioner 

GAMES AND AMUSEMENT BOARD 


Resolution No. 02-05, s. 2002 

Need for the Safekeeping of 1 / 4 of Boxerís Purses 

WHEREAS, it cannot be disputed that there is a need for the safekeeping of the 1/4 of 

the boxerís purse withheld by Japan Boxing Commission or Boxing Commission of other 

countries and forwarded to GAB to be given to the boxers concerned. 

WHEREAS, in accordance with Section 125 of GAAM, Volume I, it is mandatory that 

the accountable officers therefore open a savings account with the authorized government 

depository bank for purposes of depositing such cash or performance bond collection. 

WHEREAS, it is also provided that the interest accruing thereto should be forwarded 

to the National Treasury. 

NOW, therefore, BE IT RESOLVED, as it is hereby RESOLVED, that a savings account 

to be opened with the Philippine Veterans Bank, the new depository bank of GAB, for purposes 

of depositing such collections as trust liabilities if the amount involved P50,000.00 or more. 

BE IT RESOLVED likewise that, if the amount of such collections is less than P50,000, 

the same shall be held in trust by the Cashierís Section. 

RESOLVED further that interest accruing on said deposits and any forfeited amount 

shall be recorded as General Fund Income and remitted to the National Treasury at the end 

of every quarter. 

BE IT RESOLVED finally that Mesdames Celia S. Santiago and Noemi Lizardo be 

designated and authorized as the official signatories concerning said transactions and required 

to be properly bonded in accordance with law. 

SO RESOLVED.


Adopted: 20 May 2002 


(SGD.) OFELINA C. ARTUGUE 

Acting Board Secretary 

ATTESTED: 

(SGD.) EDUARDO R. VILLANUEVA 

Chairman 

óo0oó 


Declaring the Commissioner of the Philippine Basketball Association 

(PBA) an Official of a Professional Sports Organization Required to 

Secure a License from the Games and Amusements Board (GAB) 

Adopted: 16 Apr. 2002 



Date Filed: 04 September 2003† 

óo0oó 

Resolution No. 02- 08, s. 2002 

Requiring the Submission to the Board of all Medical Requirements 

and the Licensing of Professional Athletes Ten (10) Days 

Before the Scheduled Activities 

WHEREAS, there is a need to ascertain complete compliance with all the requirements 

for registration and licensing; 

WHEREAS, it is a paramount importance that the professional athletes be accorded 

maximum medical protection; 

WHEREAS, there is a need to provide ample time for the Board to examine and analyze 

the application for licenses of professional athletes; 

NOW, therefore, BE IT RESOLVED, as it is hereby RESOLVED, that: 

1. All medical requirements for the issuance of authority to professional athletes 

be submitted to the Board not less than ten (10) days prior to the scheduled date 

of activities; and



2. Professional boxers who are tested ìnegativeî for hepatitis ìBî are recommended 

to be vaccinated immediately, to be given in a period of six (6) months or 

less to prevent their contamination with the disease. 

SO RESOLVED. 





ATTESTED: 


Chairman 

óo0oó 


Requiring all Professional Athletes Playing Contact Sports 

and Games to Undergo Hepatitis ìBî Examinations as 

Requirement for the Issuance of Licenses 

WHEREAS, professional athletes engaged in such contact sports and games as boxing 

and basketball take the risk of possible contamination with the Hepatitis ìBî virus when 

playing against opponents, afflicted with the said disease; 

WHEREAS, there is a need for the adoption of measures to prevent professional 

athletes from being unnecessarily exposed to such risks and hazards; 


1. all professional athletes playing contact sports and games and applying for 

GAB licenses be required to undergo Hepatitis ìBî examinations and submit the 

result clearing them of Hepatitis ìBî before licenses will be issued to them; and 

2. in the count of Hepatitis ìBî ìpositiveî findings, re-examinations be allowed 

and the grant of the license being applied for be depended upon the results of two 

laboratory tests, namely HBsAg and Anti-HBs. 

SO RESOLVED. 




ATTESTED: 


Chairman 

óo0oó




Requiring Japanese Boxing Promoter to Deposit with the 

Japan Boxing Commission the Purses of Filipino Boxers Fighting Therein 

WHEREAS, it is not a remote possibility that the promoters may refuse to pay the 

purse money or disappear without paying the boxers; 

WHEREAS, there is a necessity to protect the interest and welfare of Filipino boxers 

fighting in Japan; 

WHEREAS, safeguards should be adopted to ensure that the Filipino boxers be paid in 

full and in cash the boxerís purses previously agreed upon and stipulated in their contracts; 


1. Japanese boxing promoters with Filipino fighters in their cards in Japan be 

required to deposit with the Japan Boxing Commission, at least two (2) days 

before the date of the promotion the total purse money of the Filipino boxers 

involved; and 

2. The Japan Boxing Promotion be requested to adopt measures for the prevention 

of unreasonable withholding of the purses of Filipino boxers fighting therein 

and to insure that the purses agreed upon be paid to the boxer concerned in full 

and in cash immediately after their bouts. 

SO RESOLVED. 





ATTESTED: 


Chairman 

óo0oó 


Recommending All Professional Boxers to Submit A 

Certification/Evidence that they have been Vaccinated 

Three (3) Times for Hepatitis ìBî 

WHEREAS, it is the primary responsibility of this Board to insure that maximum medical 

protection is provided to professional boxer;



WHEREAS, in pursuance of this obligation, it is incumbent upon the Board to adopt 

and implement such additional preventive measures as are deemed necessary under the 

circumstances. 

NOW, therefore, BE IT RESOLVED, as it is hereby RESOLVED, to recommend that a 

professional boxer tested negative for Hepatitis ìBî be vaccinated immediately and give 

complete three (3) dosages within six (6) months or less from the last testing to preclude 

contamination with the disease. 

SO RESOLVED. 





ATTESTED: 


Chairman 

óo0oó 

Resolution No. 02-14, s. 2002 

Approving Policies on the Substitution 

of Boxer in a Scheduled Boxing Bout 

WHEREAS, several Filipino boxers are now in serious condition as a result of injuries 

suffered in the ring either locally or in foreign countries. 

WHEREAS, these unfortunate incidents could have been avoided if proper precautionary 

measures had been observed prior to the scheduled fight. 


1. Substitution of a professional boxer stated to fight in the main event of a boxing promotion 

BE ALLOWED provided that the same is made known, formally and in writing, to the 

GAB at least five (5) days before the scheduled weigh-in; 

2. In case of undercards, substitution be likewise ALLOWED upon written notice to the 

GAB not later than the date of the weigh-in; 

3. Affidavit or certification duly subscribed and sworn to before a Notary Public, by the 

trainer of the substitute boxer concerned attesting to the fact that the said boxer has 

adequately trained for the fight and is in perfect physical condition BE ATTACHED to the 

notice of substitution to be submitted to the GAB; and


4. The substitute boxer, if not included in the original permit, BE REQUIRED to secure a 

special permit from the GAB, to be issued and signed by any Members of the Board, 

before he may be authorized to participate in the promotions. 

SO RESOLVED. 





ATTESTED: 


Chairman 

óo0oó 


Prescribing Additional Requirements for the 

Operations of Off-Track Betting Stations 

WHEREAS, there is need to make the public fully aware of the adherence of the offtrack 

betting stations to the rules and regulations governing OTB operations: 

WHEREAS, racing enthusiasts, particularly those placing bets during races should be 

safeguarded against the machinations and manipulations of alleged OTB operators who 

would endeavor, at all costs, to clothe their unlawful activities with a semblance of legality. 


1. GAB permit to operate OTB, be displayed prominently and in a conspicuous place 

inside the premises of the OTB stations; 

2. Color code stickers and property tags with their corresponding numbers BE fastened 

and/or attached to all machines and equipment being used in the OTB station concerned; 

3. For purposes of easy identification by both the betting public and GAB Regulation 

Officers and Inspectors, OTB station tellers and other employees BE REQUIRED to wear 

their identification cards at all times when inside the station premises; 

4. The Manila Jockey Club, Inc. and the Philippine Racing Club, Inc., BE DIRECTED to 

submit to the board a list of the machines and equipment placed and/or used in each of 

their accredited off-track betting stations, with their respective description and service 

numbers; and 

5. All OTB stations found to be tolerating the existence and operation of illegal gambling 

and other unlawful activities BE CLOSED immediately.



BE IT RESOLVED likewise that this Resolution BE EFFECTIVE on June 15, 2002. 

BE IT RESOLVED further that copies of this Resolution be furnished the MJCI and the 

PRCI for their information and compliance. 

SO RESOLVED. 

Adopted: 14 May 2002 




ATTESTED: 


Chairman 

óo0oó 


Approving Amendments to the Rules and Regulations 

Concerning Professional Boxing in the Philippines 

WHEREAS, there is need to amend the rules and regulations being observed in 

connection with GABís mandate to regulate and supervise the sport of professional boxing in 

the Philippines; 

WHEREAS, the adoption of certain amendments thereto has become necessary following 

changes and revision of boxing rules by such international boxing associations as the World 

Boxing Council (WBC), the World Boxing Association (WBA) and the Orient Pacific Boxing 

Federation (OPBF); 

WHEREAS, it is believed that the approval of the proposed amendments will make the 

Philippines attune to the rules and regulations being observed by many countries thereby 

raising the standard of professional boxing management and officiating in the Philippines. 

NOW, therefore, BE IT RESOLVED, as it is hereby RESOLVED, that the amendments 

submitted by the Boxing and Wrestling Division of this Board, BE, as they are hereby, 

APPROVED, effective immediately. 

RESOLVED likewise that copies of this Resolution be furnished the various professional 

boxing organizations in the country, for their information and compliance. 

APPROVED. 

Adopted: 23 May 2002





NOTED: 


Chairman 

óo0oó 


Approving the Mandatory 1% Deductions from Filipino Boxerís Purse 

WHEREAS, there is a need for the augmentation of the existing resources of the 

Boxerís Welfare Fund to satisfactorily meet its mandated obligations; 

WHEREAS, this Boxerís Welfare Fund provides financial assistance to former 

professional boxers who are indigent and direly in need of such financial aid; 

WHEREAS, a possible source of additional cash for this Fund is the earnings of the 

currently active professional boxers who may in the future avail themselves of benefits 

therefrom. 

NOW, THEREFORE, BE IT RESOLVED as it is hereby RESOLVED, that 1% of the 

boxerís purses but not to exceed P10,000.00 per boxer, deducted and remitted as contribution 

to the Boxerís Welfare Fund. 

RESOLVED likewise that this mandatory contribution be assessed to Filipino boxers for 

every fight whether held locally or in foreign countries. 

RESOLVED further that the GAB promulgate, issue and disseminate rules and regulations 

concerning the matter including but not limited to the distribution of such benefits to needly 

boxers. 

SO RESOLVED. 

Adopted: 06 June 2002 



Noted: 


Chairman 

óo0oó





Adopting Policy Guidelines that Before a Professional Golfer 

be Licensed, Be Required to be a Member of or be Accredited 

by any Professional Golf Association in the Philippines 

WHEREAS, professional golfers need protection in their chosen career; 

WHEREAS, professional golfers should be assured of growth and development to keep 

pace with the tremendous strides in other professional sports in the country. 

WHEREAS, it is the concern and duty of GAB to encourage professional golfers to 

secure GAB licenses to make it less difficult for them to acquire foreign license and work in 

other countries; 

WHEREAS, in issuing licenses to professional golfers, GAB should adhere to basic 

requirements as in other professional sports in the country; 

NOW, therefore, BE IT RESOLVED, as it is hereby RESOLVED that all professional 

golf teaching pros, whether local or foreign, be required to be members of or be accredited 

by any professional golf association in the Philippines recognized by the Games and 

Amusement Board. 

SO RESOLVED. 





Noted: 


Chairman 

óo0oó 


Approving the Increase of Fees for Licenses and Permits Being 

Imposed and Collected by the Board and Approving that 

Professional Athletes Engaged in such Sports as Billiards, 

Golf, Tennis, TableTennis, Cycling, Bowling and Volleyball be 

Required to Secure Licenses and Pay the Corresponding 

Fees Prescribed Therefor



Text Available at Office of National Administrative Register, 



óo0oó 


Requiring that 2/3 of the Cash Prizes in Billiard, Cycling 

and Other Professional Sports Tournaments be Deposited with the GAB 

Adopted: 23 Oct. 2002 




óo0oó 


Prescribing Requirements for the Establishment and 

Operation of Off-Track Betting Stations (OTB) 

WHEREAS, there is a need to protect the interest of the public vis-a-vis the conduct of 

professional sports in the country; 

WHEREAS, this need becomes even more in professional sports where betting is 

involved; 

WHEREAS, in light of the above, there is necessity to adopt stricter measures 

concerning the establishment and operation of off-track betting stations in the Philippines. 

NOW, therefore, BE IT RESOLVED, as it is hereby RESOLVED that the following 

requirements be complied with in connection therewith: 

1. No off-track betting station should be allowed to be established and operate less than 

100 meters away from schools or learning institutions and churches or places of worship 

actively and currently being used as such. 

2. The OTB station working area must be at least 40 square meters. 

3. Videos must be provided for ads live units and actual running of races.



4. Only club tellers duly authorized by either of the two (2) racing clubs should operate 

selling machines. 

5. The GAB should be notified immediately and in writing of any decision or action of the 

racing club concerned involving the opening or the temporary or permanent closure of an 

off-track betting station. 

6. An existing OTB station transferring to another location shall be considered a new OTB 

station and shall be required to comply with the requirements therefor. 

7. City or Municipal permits shall be secured annually in accordance with the procedures 

and requirements governing the matter. 

8. City or Municipal permits, GAB permits and GAB color ID logo shall be posted or 

displayed in conspicuous places within the OTB station. 

9. Revocation of permit will be imposed by the GAB if an OTB operates without the necessary 

GAB permit. 

SO RESOLVED. 



Adopted: 27 Jan. 2003 



ATTESTED BY: 


Chairman 

óo0oó 

Medical Guidelines for All Professional Basketball License 




óo0oó 

Resolution No. 03-01, s. 2003 

Adopting Requirements Concerning the Attachment of 

Colored Stickers on Betting Machines Used by the Manila 

Jockey Club, Inc. and the Philippine Racing Club, Inc.






óo0oó 


Adopting an Additional Policy on the Application for or 

Renewal of Permit to Operate OTB Station 

WHEREAS, some OTB operators apply for the issuance of permits to operate without 

the supporting Mayorís permit as some Mayors would not issue Mayorís permit unless the 

GAB permit is secured first; 

WHEREAS, in case it is an original application for permit to operate an OTB, a temporary 

permit to operate may be issued by GAB, provided the applicant could present in lieu of the 

Mayorís Permit, a letter or certification from the Mayor or Sanggunian concerned that the 

Mayor would not issue a mayorís permit without the prior approval of the GAB; 

WHEREAS, in said instance, the OTB operator who is a holder of a temporary permit 

to operate is given thirty (30) days from the issuance of said temporary license within which 

to submit a Mayorís Permit to the GAB, otherwise, the temporary license is deemed 

automatically revoked and/or cancelled; 

WHEREAS, in case of application for renewal of permit to operate an OTB and the 

mayor concerned refuses to issue a Mayorís permit, GAB will not renew the permit or will not 

issue any permit whether temporary or permanent, in recognition of the decision of the local 

executive of what is good in his area and thereby promoting harmonious relationship with 

them; 

NOW, therefore, BE IT RESOLVED, as it is hereby RESOLVED, that GAB applicants 

for permits to operate OTBs who cannot initially secure Mayorís Permit and required to 

secure from the Mayor or the Sanggunian concerned, a letter or certification that the approval 

of the GAB is necessary prior to the issuance of a Mayorís permit. 

BE IT RESOLVED, that the temporary permit to operate that GAB may issue pursuant 

to the letter or certification above mentioned, is temporary in nature and has a life span of 

thirty (30) days unless the Mayorís Permit is submitted within the period. 

RESOLVED further that no application for renewal, shall be acted upon unless supported 

by the Mayorís permit or favorable endorsement of the Mayor or the Sanggunian concerned. 

RESOLVED finally that the above be considered as a requirement for the issuance by 

the GAB of a permanent permit to operate. 

SO RESOLVED.







ATTESTED: 


Chairman 

óo0oó 


Adopting a Schedule of Penalties for Professional Basketball 

Players who are Tested Positive for Prohibited Drugs 

WHEREAS, there is a need to insure that Professional Basketball Leagues are free 

from drug (prohibited) users so that professional players could truly be good example to the 

youth; 

WHEREAS, there is need to accord ample protection to all professional sports players, 

particularly insofar as health is concerned; 

WHEREAS, it is the primary responsibility of the Board to insure medical safety of all 

professional basketball players before they are allowed to play; 

WHEREAS, in pursuance of this obligation it is incumbent upon the Board to adopt and 

implement sanctions to those PBA players who are tested positive for prohibited drugs; 

NOW, therefore, BE IT RESOLVED, as it is hereby RESOLVED, that the following 

penalties be ADOPTED as it is hereby ADOPTED to penalize Professional Basketball players 

with positive medical result for prohibited drugs to wit: 

a. For Filipino and Fil-Am Professional Basketball Players 

1. First Offense - Non-issuance of license for 2 to 4 playing games, in case license is 

not yet issued; the penalty of suspension of license from 2 to 4 playing games of the 

player concerned, in case the license was already issued. 

The license of the players may be reinstated if the following conditions are satisfactorily 


a. Served and complied with the period of suspension 

b. Enrolled and must undergo a 6-month rehabilitation program in a GAB accredited 

Rehabilitation Center 

c. Tested negative of prohibited drugs


2. Second Offense - Non-issuance of license for 4 to 9 playing games, in case license 

is not yet issued; the penalty of suspension from 4 to 9 playing games of the player 

concerned, if the license was already issued. 

The license of the player may be reinstated if the following conditions are satisfactorily 


a. Served and complied with the period of suspension 

b. Enrolled and must undergo a 1-year rehabilitation program in a GAB accredited 

Rehabilitation Center 

c. Tested negative of prohibited drugs 

3. Third Offense - Ban for life or revocation of license 

b. For Foreign Players (Imports) 

License will not be issued or in case was issued, the penalty is revocation of license. 

Any Professional Basketball League that tolerates or allows player who are tested 

positive of prohibited drugs shall be meted with the penalty of revocation of permit and/or 

fines as the Board may deem it just and proper. 

RESOLVED further that these policies shall apply to all professional basketball players 

who will play or are playing in GAB licensed Professional Basketball League. 

SO RESOLVED. 

Adopted: 27 Feb. 2003 




ATTESTED: 


Chairman 

óo0oó 

Resolution No. 03-14, s. 2003 

Adopting an Additional Policy on the Application 

for Boxing Promotion Permit



WHEREAS, it has been observed that lately the Board has been charged with the 

additional responsibility of going after the promoters of boxing events and boxerís managers 

for the remittance to the Office of their monetary obligations, particularly of the boxerís 

purses and GABís share in TV rights is concerned; 

WHEREAS, this situation must be avoided for purposes of eliminating any disruption in 

the operations of the Office and instilling in the minds of those concerned their responsibilities 

under the law. 


1. That applications for boxing promotions will not be processed and acted upon without 

the concerned parties being cleared of any arrears or pending financial obligations to the 

Board; 

2. That no video cameras and other television equipment and instruments will be allowed 

to be brought inside the venues of such boxing promotions and/or be used to cover the 

event without the approval of the Board; and 

3. That this Resolution shall take effect immediately. 

RESOLVED likewise that copies of this Resolution be furnished all the parties concerned. 

SO RESOLVED. 




APPROVED: 


Chairman 

(SGD.) EMMANUEL B. PALABRICA (SGD.) ANGEL P. BAUTISTA 



óo0oó 


Approving the Recognition of the Sport Mixed Martial Arts 

Under the Supervision of the Boxing and Wrestling Division 

of the Games and Amusements Board, the Issuance of the Rules 

and Regulations Governing Professional Mixed Martial Arts in the 

Philippines and the Accreditation of the Unified Reality Combat 

and Sports Entertainment Management, Inc.


WHEREAS, it is the policy of the State to promote physical education and encourage 

sports programs, league competitions, including training for international competitions, to 

foster self-discipline, teamwork, and excellence for the development of a healthy and alert 

citizenry; 

WHEREAS, the government, in an effort to carry out its constitutional mandate, 

empowered the Games and Amusements Board (GAB) to supervise and regulate the conduct 

of professional sports pursuant to P.D. 871; 

WHEREAS, mixed martial arts is a form of sport which is already universally recognized 

and professionally played not only in our neighboring countries in Asia but likewise in many 

other countries worldwide, particularly in Europe and America; 

WHEREAS, in view of the worldwide recognition of mixed martial arts as a form of 

professional sport, there is a need for the Philippines to recognize and patronize mixed 

martial arts in order to cope up with universal trends; 

WHEREAS, mixed martial arts events are highly entertaining and will definitely be a 

boost to tourism in the Philippines; 

WHEREAS, in light of the precautions being taken, mixed martial arts activities are 

safe and provide no physical danger or risk to the life and limb of the participants; 

WHEREAS, the enhancement of the popularity of this new sport discipline among the 

youth and even among adults will veer them away from vices such as alcohol, illegal drugs 

and other nefarious activities; 

WHEREAS, the holding and proliferation of competitions and exhibitions featuring mixed 

martial arts, if recognized and accredited by the Games and Amusements Board, will help 

generate additional income for the government; 

WHEREAS, in order to enable the Filipino people, especially the youth and sports 

enthusiasts, to fully appreciate and recognize the mixed martial arts, there is a need to 

formulate the rules and regulations governing the mixed martial arts in the Philippines; 

WHEREAS, that the Boxing and Wrestling Division of this Board is responsible in the 

implementation and supervision of the sport, mixed martial arts; 

WHEREAS, for purposes of a proper and orderly monitoring of the activities and 

programs of private groups and associations engaged in the promotion and development of 

mixed martial arts, accreditation by GAB is necessary before these private groups and 

associations can be authorized to engage in such endeavors; 

WHEREAS, the Board, upon consultation with its committee, hereby finds, based on 

the findings and recommendation thereof, that the recognition of mixed martial arts as a form 

of professional sport, is ideal to the development and promotion of physical and mental wellbeing 

of the citizenry, promote sportsmanship, provide entertainment and will enhance Filipino 

skills to join international competition.



NOW, therefore, in view of the foregoing, the Board RESOLVED, as it is hereby 

RESOLVED, that MIXED MARTIAL ARTS be recognized, as it is hereby RECOGNIZED, as 

a form of professional sport subject to the rules and regulations as may be promulgated by 

the Games and Amusements Board (GAB), to be under the supervision and regulation of the 

Boxing and Wrestling Division, in the exercise of its supervisory and regulatory powers over 

professional sports pursuant to the provisions of P.D. 871 and other related laws. 

RESOLVED further that after due evaluation and consideration of documents and other 

materials submitted as well as the testimonies and clarifications given by the officers of the 

Unified Reality Combat and Sports and Entertainment Management, Inc., the Board 

APPROVED, as it is hereby APPROVED the accreditation of the UNIFIED REALITY COMBAT 

and SPORTS AND ENTERTAINMENT MANAGEMENT, INC. to promote the sport, MIXED 

MARTIAL ARTS. 

RESOLVED likewise that copies of this Resolution be given to all parties concerned. 

SO RESOLVED. 




APPROVED: 


Chairman 




óo0oó 


Imposing an Additional Requirement for Filipino Boxers Fighting Abroad 

WHEREAS, it has come to the attention and knowledge of the Board that mismatches 

have occurred involving Filipino boxers fighting foreign boxers in the latterís native countries; 

WHEREAS, the Games and Amusement Board is mandated to adopt such measures 

as will accord optimism, protection to the well being and safety of Filipino professional 

boxers, whether fighting locally or in foreign soil; 

WHEREAS, boxing mismatches are anathema to the best interest of boxing professionals 

and endanger, in no small measure, the lives and limbs of the boxers involved;


WHEREAS, there is need to prevent the occurence of boxing mismatches and eliminate 

the possibility of deaths and unnecessary injuries in the ring as a consequence thereof; 

NOW, therefore, BE IT RESOLVED, as it is hereby RESOLVED, that applications for 

authority for Filipino boxers to fight abroad; 

1. Be supported by: 

a. name, age and ring record of the applicant Filipino boxer as certified to by GABís 

Boxing and Wrestling Division; 

b. name, age and ring record of the foreign boxer-opponent as certified to by his countryís 

boxing commission; and 

2. Be filed with the Board, for approval, not less than ten (10) days prior to the Filipino 

boxerís departure for the venue of the fight. 

BE IT RESOLVED likewise that this Resolution shall take effect immediately. 

BE IT RESOLVED further that copies of this Resolution be furnished all concerned. 

SO RESOLVED. 




APPROVED: 


Chairman 




óo0oó 


Approving the Mandatory and Random Drug Testing for 

All Applicants and Licensees of the Game and Amusement Board 

WHEREAS, during previous seminar-workshops a serious concern has been raised 

that professional athletes as well as those involved in professional sports have been and are 

using prohibited drugs; 

WHEREAS, in view of such reports there is an urgent need to insure that professional 

sports be free from prohibited drugs to maintain the integrity of professional sports and be



free from prohibited drugs to maintain the integrity of professional sports and health of the 

professional players; 

NOW, therefore, BE IT RESOLVED, as it is hereby RESOLVED, that all GAB applicants 

for license and licensees shall undergo and pass the drug testing as a requirement for 

licensing and renewal of licensees, respectively and shall be subjected to random drug 

testing at any time the GAB may deem it proper. 

BE IT RESOLVED further that copies of this resolution be furnished all concerned. 

This Resolution shall take effect immediately. 

SO RESOLVED. 




ATTESTED: 


Chairman 




óo0oó 


Granting to the GAB the Power of Automatic Review 

Over Decisions and Rulings of Important Significance of 

All Professional Sports Organizations 

WHEREAS, decisions and rulings promulgated by the Philippine Basketball Association 

(PBA) and other professional sports organizations are presently elevated on appeal to the 

Games and Amusements Board only at the instance of the players or other sports organizations 

or body concerned; 

WHEREAS, inasmuch as said decisions invariably concern or affect the rights of 

professional athletes, there is need for the establishment of a system that would guarantee 

due process and accord these players or any party for that matter, a forum to present its 

side; 

WHEREAS, the Games and Amusement Board, being the final authority on the matter 

and in accordance with its mandated functions, may exercise the power of automatic review


over decisions and rulings of important significance issued and promulgated by professional 

sports organizations in the country and which are no longer subject to a sport organizationís 

reconsideration; 

NOW, therefore, BE IT RESOLVED, as it is hereby RESOLVED, that decisions, rulings, 

resolutions and orders issued by professional sports organizations in the Philippines of 

important significance may be subject to AUTOMATIC REVIEW by the Games and Amusement 

Board. 

RESOLVED further that his Resolution shall take effect immediately. 

RESOLVED likewise that copy of this Resolution be furnished to all parties concerned. 

SO RESOLVED. 




ATTESTED: 


Chairman 




óo0oó 


Approving the Additional Rule on Circumstance when an 

ìImmediate Rematchî is Applied or Ordered, in the Rules and 

Regulations governing Professional Boxing in the Philippines 

WHEREAS, rules and regulations promulgated to govern the conduct of professional 

sport in the country must constantly be reviewed and analyzed for purposes of determining 

their relevance to the times; 

WHEREAS, there is likewise a need for such rules and regulations to be attuned to 

changing circumstances and new developments; 

WHEREAS, provisions for ìimmediate rematchî in contracts involving boxing 

championship bouts have hampered the further elevation of boxing standards in the country.



NOW, therefore, BE IT RESOLVED, as it is hereby RESOLVED, that the following be 

appended or added to Section 2.3 (Defense of Titles) of the Rules and Regulations of 

Professional Boxing in the Philippines; 

ìNo championship contract and title match shall be approved by the Board if the 

contract contains a ìreturn matchî clause which requires or binds the challenger to meet the 

former champion again for the title in the event the challenger wins the bout. The Board shall 

not certify any match between the same two boxers (champion and challenger in GAB 

sanctioned title match) if it is an immediate return match. 

Notwithstanding the rules against return matches without an intervening contest, in 

cases where the champion has lost the championship bout, the Board may order a direct 

championship rematch between a defeated champion and the new champion when in the 

opinion of the Board, the initial match was extremely controversial or irregular, of if there is 

evidence of a violation of the rules governing the conduct of the bout. 

A rematch will be ordered or accepted only after allowing an ìintervening championship 

boutî between the new champion and another rated contender to be approved by the Board. 

The winner of the intervening defense match may be ordered to meet the loser of the initial 

title match, provided that the former champion has not lost in another bout.î 

RESOLVED further that the resolution shall take effect immediately. 

RESOLVED likewise that a copy of this Resolution be furnished all parties concerned. 

SO RESOLVED. 




ATTESTED: 


Chairman 

(SGD.) ATTY. EMMANUEL B. PALABRICA (SGD.) ANGEL P. BAUTISTA 



óo0oó 


Approving the Amendment of the Guidelines for the 

Issuance of GAB Authorization for GAB-Licensed Boxers 

to Travel Abroad to Fight in a Foreign Boxing Promotion


WHEREAS, there is need to further insure the safety of Filipino professional boxers 

fighting in foreign countries; 

WHEREAS, there is likewise the necessity of maintaining the high standards of 

professional boxing in the country, particularly before foreign spectators in promotions held 

abroad. 

NOW, therefore, be it RESOLVED, as it is hereby RESOLVED, that Item 1 of 

Memorandum Circular No. 02-22, Series of 2002, entitled ìGuidelines on the prevention of 

VISA violations by GAB-licensed boxers, managers, trainers and seconds travelling abroad, 

especially in Japan, in connection with foreign boxing promotionî be it is hereby AMENDED 

with the incorporation therein of the following provisions; 

ìNo GAB-licensed professional boxers shall travel abroad to fight in a foreign boxing 

promotions unless a boxer is a certified legitimate 10-rounder and 8-rounder who have won 

at least once in their last three (3) 10-round or 8-round fights, provided however, that if a 

boxer sustained three (3) loses by KOís or TKOís in his last four (4) fights or four (4) losses 

in his last five (5) fights, the boxer will not be permitted to fight abroad to avoid serious injury 

or such other cases that may be detrimental to the health of the boxer. 

All approval, however, shall be at the discretion of the Board.î 

RESOLVED further that this Resolution shall take effect immediately. 

RESOLVED likewise that a copy of this Resolution be furnished all parties concerned. 

SO RESOLVED. 




ATTESTED: 


Chairman 

(SGD.) ATTY. EMMANUEL B. PALABRICA (SGD.) ANGEL P. BAUTISTA 



óo0oó 


Adopting Additional Procedures in Suspending Boxers 

and Holding Boxing Promoters/Managers Responsible 

for Furnishing the Board the Correct and Exact 

Addresses of Boxers under their Supervision



WHEREAS, professional boxers sometimes deliberately write incorrect or inexact 

addresses in their applications for licenses; 

WHEREAS, this practice leads to certain complications, particularly where there is 

need to send notices or summonses to the boxers concerned in connection with complaint 

brought before the Board for adjudication; 

WHEREAS, non-receipt by these boxers due to wrong addresses of communications 

officially transmitted by the GAB pursuant to its quasi-judicial functions invariably results in a 

delay in the resolution of the issues raised in the complaints, and make a travesty of the 

Boardís efforts towards the speedy adjudication of cases pending before it. 

NOW, therefore, BE IT RESOLVED, as it is hereby RESOLVED that the following 

procedures be ADOPTED as they are hereby ADOPTED for purposes of rectifying the 

situation above-described: 

1. Notification of the concerned parties requiring them to submit to the Board 

their latest and correct addresses; and 

2. Suspension, until further orders, of the professional licenses of boxers who fail 

to comply therewith, within a reasonable period of time. 

RESOLVED likewise that the boxing promoters/managers be HELD as it is hereby 

HELD responsible to furnish the Board the correct, exact or new addresses of boxers under 

their supervision. 

RESOLVED further that this Resolution shall take effect immediately and copies of this 

Resolution be furnished all parties concerned, the Field Offices, Divisions and Sections of 

this Board are concerned. 

SO RESOLVED. 




ATTESTED: 


Chairman 




óo0oó



The Professional Mixed Martial Arts Rules 

and Regulations of the Philippines 


U.P. Law complex, Diliman, Quezon City) 

LAND TRANSPORTATION FRANCHISING REGULATORY 

BOARD 


Memorandum Circular No. 2003-012 

Shuttle Service for Subdivisions 

The Board, finding validity on the request of homeownersí associations to find ways 

for an alternative mode of transport service for residents within their subdivisions, has decided 

to accept applications for franchises to operate Multi-cab types of vehicles within a 

particular subdivision operating inside the territorial jurisdiction of such subdivision. 

Applications must be indispensably accompanied by valid contracts between the present 

and legitimate homeownersí association/s and the operator/s. 

This Memoarandum Circular supersedes any and all issuances inconsistent herewith 

and shall take effect fifteen (15) days following its publication in the Official Gazette or in a 

newspaper of general circulation or the filing of three (3) copies hereof with the U.P. Law 

Center, pursuant to Memorandum Circular No. 11, dated 09 October 1992. 


(SGD.) DANTE M. LANTIN 

Chairman 

(SGD.) REMEDIOS G. BELLEZA 

Board Member 

(SGD.) FELIX S. RACADIO 

Board Member 

--o0o--





Exemption from Memo Circular No. 2002-005 

(Suspension of the Issuance of Provisional Authority for 

CPC Application of Which is Pending Before this Board) 

Due to the clamor of the Regional Directors of this Board that Provincial Authority be 

issued by them for expired Certificate of Public Convenience with Extension of Validity 

application of which is pending before them, this Board hereby exempts all Regional Directors 

of LTFRB, except National Capital Region (NCR), from the effects of Memorandum Circular 

No. 2002-005. 

Accordingly, all LTFRB Regional Directors, except NCR, are now duly authorized to 

issue orders granting Provisional Authority for an inextendible period of ninety (90) days 

from the date of the issuance thereof. 

This Memorandum Circular supersedes any and all issuances inconsistent herewith 


newspaper of general circulation or the filing of three (3) copies hereof with the UP Law 

Center, pursuant to Memorandum Circular No. 11, dated 09 October 1992. 




Chairman 


Board Member 


Board Member 

--o0o-- 

Memorandum Circular No. 2003-014 

Imposition of Standard Fare Rates on Vehicle-For-Hire Service 

The Board has approved numerous applications for air-conditioned PUJ service and 

applications for conversion from Garage & Rent-A-Car services into Vehicle-for-Hire service, 

the fare rates authorized therein having been proposed by the operators themselves. 

However, considering the mounting complaints from the riding public that exorbitant 

fare rates have been charged by the operators/drivers of air-conditioned PUJ and vehicle-


for hire services, the Board hereby resolved to impose a standard schedule of fare rates for 

air-conditioned PUJ and vehicle-for-hire services to be charged as follows: 

P6.00 - for the first (5) kilometers; and, 

P1.00 - per succeeding kilometer. 

All existing air-conditioned PUJ and vehicle-for-hire operators, except those on rent a 

car business, are hereby directed to follow strictly this Memorandum Circular. For failure to 

do so, the Board may impose the following penalties: 

First Offense - Fine of P5,000.00 

Second Offense - Suspension of operatorís CPC; and 

Third Offense - Cancellation/Revocation of operatorís CPC 

All operators of air-conditioned PUJ and vehicle-for-hire services are, likewise, directed 

to follow strictly the terms and conditions of their CPCs and the operating characteristics 

of the services granted to them. 

All other Memorandum Circulars inconsistent with this Circular are hereby amended 

and/or repealed. 

This Memorandum Circular takes effect fifteen (15) days following its publication in the 

Official Gazette or in a newspaper of general circulation or by filing of three (3) copies of the 

same with the UP Law Center pursuant to Presidential Memorandum Circular No. 11 dated 

October 9, 1992. 




Chairman 


Board Member 


Board Member 

--o0o-- 


Markings for Taxi and Mega Taxi Units, Amending 

Memorandum Circular No. 2000-016 

In consonance with Memorandum Circular No. 2003-010 dated 25 April 2003, promoting 

the countryís tourism and transportation programs, the Board hereby resolves to require 

all operators of taxi and mega taxi units the following:



1. To remove the capacity markings at the right and left fenders of their units; 

2. To remove the markings at the right and left front doors of the unit, except their tradenames 

and telephone numbers; and 

3. To remove the plate no. and case no. markings at the right and left quarter panels of their 

units. 

In view hereof, all markings requirement is no longer required. Instead, all operators 

concerned are required to strictly comply with Memorandum Circular No. 2003-010. The 

Board shall assign them color coded body numbers based on their recorded addresses, to 

which they shall be painted at the specified portions of the units and according to the 

prescribed sizes. 

Any operator found not to be complying with this Circular may not be issued confirmation 

needed for registration or its franchise may be suspended, after due notice and hearing, 

until this circular is complied with. 

This Memorandum Circular supersedes any and all issuances inconsistent herewith. 

This Order shall take effect fifteen (15) days following its publication in the Official 

Gazette or in a newspaper of general circulation or the filing of three (3) copies hereof with 

the U.P. Law Center pursuant to Presidential Memorandum Circular No. 1 dated 09 October 

1992. 




Chairman 


Board Member 


Board Member 

--o0o-- 


Conversion of Franchised Tourist Buses to Regular Aircon Buses 

To allow operators of regular air-conditioned buses on existing routes to maximize their 

operations on their franchised routes, they are hereby authorized to convert their tourist 

buses, which are presently under-utilized due to the low volume of tourist arrivals, to regular 

air-conditioned buses. 

The conversion of tourist buses into regular aircon buses, which has been cleared with 

the Department of Tourism (DOT), is subject to the following conditions:


1. Only those operators who have CPCís for both regular aircon and tourist buses shall be 

covered by this MC; 

2. The tourist buses proposed for conversion to regular aircon buses must be applied for 

operation as regular aircon buses in the applicantís authorized routes and must all be registered 

for the years 2002 and 2003; 

3. The total number to be allowed for conversion shall be equivalent to 50% of the Route 

Measured Capacity (RMC) determined by the DOTC Survey in 1999 on the routes where the 

tourist buses proposed for conversion shall be operated as regular aircon buses; 

4. Only fifty (50%) percentum of the applicantís registered tourist buses under their tourist 

bus franchises shall be allowed to be converted to regular buses; 

5. Upon conversion of the applicantís tourist buses to regular aircon buses, their DOT accreditation 

will be cancelled and their DOT sticker will be removed. 

In the verified applications that will be filed pursuant to this Memorandum Circular, the 

applicant should indicate the following: 

1. Case Nos. of their tourist bus franchises and the total number of tourist buses 

authorized thereunder; 

2. The number of tourist buses proposed for conversion in relation to applicantís 

total number of authorized tourist buses; 

3. The tourist buses under their franchises have all been registered with the LTO 

for year 2002 and 2003 attaching photo copies of the LTO registration certificates 

and official receipts for said tourist buses; 

4. The case numbers of the applicantís authorized regular routes where the tourist 

buses proposed for conversion to regular aircon buses will be operated. 

The Board reserves the right to reject applications being filed that do not comply with 

the foregoing conditions. Proceedings for the conversion of tourist buses to regular aircon 

buses will be summary in nature considering that the buses proposed for conversion are 

registered buses and there is public need on the routes they will be operated pursuant to the 

RMC determined by the DOTC. 




1992. 

SO ORDERED. 


ë 


Chairman





Board Member 


Board Member 

--o0o-- 


Amendments to Memorandum Circular No. 2003-001 dated 

January 7, 2003 by Means of Inclusion of the Words ìAnd Asian Utility 

Vehicles (AUVs)î in the First Line of Paragraph No. 3, and the Deletion of 

the Words ìOther Than AUV,î From Paragraph No. 4, First and 

Second Lines, Both Found in the said Memorandum 

Due to the request of transport operators that Asian Utility Vehicles (AUVís) be authorized 

to be used as Tourist Coupon Taxi Service and Tourist Chartered Service found in 

Memorandum Circular No. 2003-001, dated January 7, 2003, the words ì AND ASIAN 

UTILITY VEHICLES (AUVís)î is deemed included and inserted between the words ìvehiclesî 

and ìwithî found in the first line of paragraph no. 3 of said Memorandum Circular, 

which is now to be read as follows: 

ì3. Tourist Coupon Taxi Service: refers to 4-door sedan vehicles and 

asian utility vehicles (AUVís) with concessionaire agreement, plying the 

international and/or domestic airports, seaports and hotels covered with 

tourist coupon taxi service franchise which fare charges are predetermined 

by the Board, requiring minimum of ten (10) units, at maximum age limit of 

10 years from date of manufacture.î 

Likewise, the words ìOTHER THAN AUVî as found in paragraph no. 4, first and 

second lines, of the same Memorandum Circular is DELETED, which is now to be read as 

follows: 

ì4. Tourist Chartered Service: refers to bus, coaster, van and 4-door 

sedan vehicles catering to tourists covered with tourist chartered service 

franchise which fare charges are predetermined by the Board, requiring 

minimum of three (3) units, at maximum age limit of 15 years for bus and 

coaster and 10 years for van and car, from date of manufactures.î 




1992. 

SO ORDERED.





Chairman 


Board Member 


Board Member 

--o0o-- 


Amendment to Memorandum Circular No. 2003-008 dated April 22, 2003 

Excluding the Words ìFor New CPC and/or Applicationî from 

Paragraph No. 3, in the said Memorandum 

Due to the request of transport operators with regards to the amendment of Memorandum 

Circular No. 2003-008, dated April 22, 2003, the words ìFOR NEW CPC AND/OR 

APPLICATIONî found in paragraph no. 3 thereof are deemed excluded from said Memorandum 

Circular, which is now to be read as follows: 

ì3. PUJ air-conditioned or Filcab service may be opened for application 

for conversion, subject to the following conditions:î 

Pending applications for new CPCís filed with the Board prior to the issuance of this 

amendatory Memorandum Circular are deemed withdrawn and shall not be processed. 


SO ORDERED. 




Chairman 


Board Member 


Board Member 

--o0o--




Amendment to Memorandum Circular No. 99-016 

This Board issued Memorandum Circular No. 99-016, dated 13 August 1999, supporting 

the governmentís thrust to promote tourism in the country, the second paragraph of 

which reads: 

ìAfter a review of the present policy and in support of the governments thrust to 

promote tourism in the country, the Board hereby lifts and exempts from the 

coverage of Memorandum Circular No. 97-009-A, to wit (1) applications for CPC 

for rent-a-car or vehicles for hire with a minimum of twenty (20) units, provided 

the vehicles are rented or hired without drivers or the operator-applicant is an 

approved concessionaire of the NAIA to operate and pick-up passengers in the 

international or domestic airport terminals, and (2) applications for CPC for taxis 

provided the operator-applicant is also an approved concessionaire of the NAIA 

to operate and pick-up passengers in the international or domestic airport terminals, 

and (2) applications for CPC for taxis provided the operator-applicant is also 

an approved concessionaire of the NAIA to operate and pick-up passengers in 

the international or domestic airport terminals, the color of the taxi being white, 

and the type of vehicle used being sedan.î 

With the objective of providing better transport facilities for tourists, thereby boosting 

the countryís tourism industry, this Board, in coordination with the Department of Tourism, 

Department of Transportation and Communications and Metro Manila Development Authority, 

issued Memorandum Circular No. 2003-001 reclassifying Tourist Transport Services. 

After a circumspect review of the policies, the provisions of paragraph (2) of MC No. 

99-016 appear to deviate from MC No. 2003-01. Accordingly, with the intention to avoid any 

confusion, the Board hereby amends paragraph (2) of the former Circular to read as follows: 

ìAfter a review of the present policy and in support of the governmentís 

thrust to promote tourism in the country, the Board hereby lifts and exempts 

from the coverage of Memorandum Circular No. 97-009-A applications 

of twenty (20) units, provided vehicles are rented or hired without 

drivers.î 


This Memorandum Circular shall take effect immediately. 

SO ORDERED. 



Chairman




Board Member 


Board Member 

--o0o-- 


Directive for a Uniform Pertinent Data Printed 

on the Receipt of Taxi Meter 

Pursuant to Memorandum Circular No. 2003-010, dated 25 April 2003, whereby it 

provides, among other things, that all taxi and mega taxi units based in or operating within 

Metro Manila shall be equipped with ìxxx meter with receipt xxx,î the following data should 

appear on the receipt of the taxi meter, to wit: 

Name of Taxi 

Address 

Telephone Number 

Tax Identification Number 

Plate Number 

Color Coded Body Number 

Date 

Start 

End 

Distance 

Waiting 

Fare in Philippine Peso 

Futhermore, all operators should always ensure that, at any given time, the taxi meter 

should have a paper for receipt. Any operator found to have violated this Circular shall pay to 

the Board the fine of One Thousand Pesos (P1,000.00) or face a suspension of his Certificate 

of Public Convenience, or both at the sole discretion of the Board after observance of 

due process. 


This Memorandum Circular shall take effect immediately. 


Chairman 


Board Member





Board Member 

--o0o-- 


Criteria in Establishing a Centralized Taxi Dispatching 

and Control Center (CTDCC) 




--o0o-- 


Prohibiting the Acceptance of Application/Petition for the 

Issuance of CPC for PUJ and Bus Services filed More than 

Thirty (30) Days from Date of Issuance of Route Measured Capacity 

It came to the knowledge of the Board that the Routes Measured Capacity (RMCís) it 

issued for quite a considerable period of time on jeepneys and buses are still being used as 

bases for the filing of applications for the issuance of Certificates of Public Convenience for 

Jeepney or Bus Service, as the case maybe. 

In order to put a stop on this practice, this Board hereby prohibits the acceptance of 

application/petition for the issuance of Certificate of Public Convenience for PUJ or Bus 

Service when the same is filed more than thirty (30) days from the date of issuance of the 

route measured capacity as appearing in the RMC sheet itself. 

This Memorandum Circular supersedes any and all issuances inconsistent herewith 


newspaper of general circulation or the filing of three (3) copies hereof with UP Law Center, 

pursuant to Memorandum Circular No. 11, dated 09 October 1992. 

SO ORDERED. 


Chairman 


Board Member



Board Member 

LAND TRANSPORTATION OFFICE 


Memorandum 

Automated License Examination 

It has been identified that license examination is administered and corrected manually, 

leaving a lot of opportunity for errors and even examination results tampering. The purpose 

of conducting a license examination to ensure the readiness and theoretical capability of the 

license applicant is therefore defeated. 

In order to avoid manual errors and tampering of data, automation of generation and 

checking of license examinations was identified as enhancement to the Driverís Licensing 

System (DLS) of LTO-IT Project. 

This utility includes the following: 

- Random generation of written examination questions 

- Random generation of answer keys to the randomly generated questions 

Automating the generation and checking of license examinations will guarantee examination 

results that are objective and reflective of the applicantís aptitude to drive. Public 

safety is less jeopardized. 

In view of the guarantees to public safety brought about by Automated License Examination, 

all LTO agencies are directed to implement its use. 

For strict implementation. 



(SGD.) ROBERTO T. LASTIMOSO 


--o0o-- 

Memorandum Circular No. RTL-MC-03471 

Computer Fees







--o0o-- 


Reactivation of Stored Motor Vehicle 

It has been noted that when a stored motor vehicle was reactivated no fees were 

collected although its records are updated. However, when the motor vehicle was put into 

storage we collect storage fees. 

In view thereof and to maximize our revenue collections a fee of thirty pesos (Php 

30.00) as revision of records shall be collected whenever a stored motor vehicle is reactivated 

in addition to collectible registration fees. 

The provision of any memoranda, circulars and other issuances which is inconsistent 

thereof are hereby amended/modified. 

For immediate implementation. 





--o0o-- 


No Change of Venue of Automated Transaction 

to Non-Computerized Office 

It has been reported to the undersigned that a sizeable volume of automated transactions 

have been transferred to non computerized office to evade the payment of IT fee thus 

depriving out IT contractor their legal income and destabilized the integrity of our database 

as it is not updated. 

Effective immediately all non-computerized district offices and extension offices are 

hereby ordered not to accept change venue of registration of automated transactions and 

refer instead the registrant to the nearest computerized office.







--o0o-- 

Memorandum Circular No. RTl-MC-03474 

Registration of Delinquent Motor Vehicles 

Pursuant to the provision of Section 4 (D1) of RA 4136, first paragraph, section 8 of 

Circular 82-028 dated June 8, 1982 is hereby amended to read as follows: 

SECTION 8. Delinquent Motor Vehicles - Delinquent motor vehicles as of December 

2000 and below when presented voluntarily for registration shall pay only one year using the 

2001 MVUC RATE plus 50% of the current CALENDAR YEAR MVUC RATE, placed under 

automatic storage and collect the applicable portion of the year and miscellaneous fees. 

All circulars, memoranda, and particularly first paragraph, Section 8 of Circular 82- 

028, Circular 83C-DIR-020 and Circular 89-109 are hereby modified and amended accordingly. 






--o0o-- 


Inspection of Used Original Left Hand Drive Motor Vehicles 

Imported Through the Subic Bay Freeport Zone 

Effective immediately and in order to ensure efficient delivery of public service, it is 

hereby directed that inspection of imported original left hand drive (LHD) motor vehicles 

imported through SBMA can be done at LTO motor vehicle inspection stations. Likewise, 

transfer of ownership of used imported motor vehicles initially registered at LTO SBMA 

Extension Office shall only be effected at the same district office for proper monitoring and 

control. However, if SBMA Extension Office is already on-line with other district offices, then



transfer of ownership can be effected at any district office most convenient to the owner of 

the motor vehicle. 

All orders/memoranda and circulars in conflict herewith are deemed superseded. 






--o0o-- 


Resumption of the Implementation of Memorandum 

Circular No. RTL-MC-03444 

You are hereby directed to resume the implementation of Memorandum Circular (MC) 

No. RTL-MC-03444 regarding the issuance of the Certification of Stock Reported (CSR) in 

the Manufacturers, Assemblers, Importers and Dealers Reporting System (MAIDRS). The 

implementation of the subject MC shall take effect on July 21, 2003, when the collection of 

certification fee of Thirty Pesos (PhP 30.00) and legal research fund of Ten Pesos (PhP10.00) 

for each CSR issued shall also commence. 






--o0o-- 

Memorandum 

Authentication of Comprehensive Third Party 

Liability Insurance Certificates of Cover 

In view of the lapse last July 15, 2003, of the Temporary Restraining Order issued by 

the Regional Trial Court, Branch 97, National Capital Region, in civil case entitled, ìD: Tech 

Management, Incorporated vs. Land Transportation Office represented by Asst. Sec. Roberto 

T. Lastimoso,î all LTO officials and employees are hereby directed to immediately accept 

Comprehensive Third Party Liability Insurance (CTPL) Certificates of Cover (COC) that are


verified and authenticated online, real time with the LTOís Motor Vehicle Registration System 

(MVRS) under the LTO Information Technology (IT) Project. 

Effective August 1, 2003, all LTO officials and employees are hereby directed to accept 

ONLY CTPL COCs that are verified and authenticated online, real time with the LTOs 

MVRS through the LTO IT project. 






--o0o-- 

Memorandum Circular No. LRM-MC-03478 

Guidelines on the Registration of Imported Motor 

Vehicles thru the Subic Freeport Zone (SBMA) 

In order to closely monitor the registration of all imported motor vehicles brought in 

through Subic Freeport Zone, the following guidelines are hereby adopted for STRICT 

compliance: 

1. All motor vehicles, brand new or used, imported and landed at the Subic Freeport Zone 

shall be registered ONLY with the LTO Subic Extension Office at the Subic Bay Metropolitan 

Authority. 

2. These imported motor vehicles landed at Subic Bay Freeport Zone must undergo Roadworthiness 

and Smoke Emission Tests at the nearest LTO MVIS facility or any accredited 

alternate Motor Vehicle Inspection Station. Only LTO Subic Extension Office will issue 

conduction permits for the purpose of securing the necessary Macro-Etching Certificate 

and PNP Motor Vehicle Clearance Certificate from TMG, PNP facility nearest the LTO 

Subic Extension Office. 

All orders/memoranda and circulars in conflict herewith are deemed superseded. This 

circular shall take effect immediately upon receipt of all parties concerned. 




Secretary DOTC concurrent 

LTO Chief



MARITIME INDUSTRY AUTHORITY 



Rules on the Accreditation of Training Centers/Entities 

Which Shall Offer Courses on Maritime Security 

Pursuant to the provisions of Presidential Decree (PD) No. 474 and Executive Order 

No. 125, as amended, and in conformity with the new Chapter XI-2 of the International 

Convention for the Safety of Life at Sea (SOLAS), 1974, as amended, and the International 

Code for the Security of Ships and of Port Facilities (ISPS Code), the following rules on the 

accreditation of maritime training centers/entities which shall offer courses for Ship Security 

Officers (SSO) and Company Security Officers (CSO) were adopted by the Maritime Industry 

Board in its meeting 16 May 2003. 

I 

Objectives 

1. To provide rules on the accreditation of maritime training centers/entities which shall 

offer/conduct courses on maritime security as required by International Code for the Security 

of Ships and of Port Facilities; and 

2. To ensure that SSOs and CSOs acquire the minimum competencies and knowledge as to 

properly undertake the tasks required by the ISPS Code. 

II 

Coverage 

These Rules shall apply to all training centers/entities which shall offer courses on 

maritime security. 

III 


1. Only MARINA-accredited training centers/entities shall be allowed to offer/conduct training 

courses on maritime security as required under the ISPS Code; 

2. Upon completion of the training course, the trainee must possess competency in: 

2.1 undertaking regular inspections of the ship to ensure appropriate security 

measures are maintained; 

2.2 maintaining and supervising the implementation of the ship security plan 

including any amendments or modifications to the plan;


2.3 enhancing security awareness and vigilance onboard, and ensuring that adequate 

training has been provided to shipboard personnel 

2.4 ensuring the implementation of the ship security plan in coordination with the 

company security officer and the relevant port facility security officer; and 

2.5 ensuring that security equipment is properly operated, tested and calibrated. 

3. The training center/entities must as a minimum comply with the following requirements: 

3.1 Instructors in charge of the training course must: 

.1 have adequate experience in maritime security matters specifically on the 

requirements of Chapter XI-2 of SOLAS 1974, as amended and of the ISPS 

Code; and 

.2 have appropriate training in or is familiar with instructional techniques and 

training methods or have completed IMO Model Course 6.09 

3.2 The number of trainees shall not exceed twenty-four (24) students per classroom; 

3.3 Security methods, aids, tools and equipment necessary for the effective conduct 

of the course shall be provided; and, 

3.4 Administrative Requirements as stipulated in Annex 1, which forms part of this 

Circular shall be complied with. 

4. The training center shall issue the corresponding Certificate of Completion to trainees who 

have completed the actual training course on maritime security. 

5. The Certificate of Accreditation of maritime training centers/entities for purposes of this 

Circular shall be valid for three (3) years only to be renewed every three (3) years. 

IV 

Requirements/Procedure for Registration 

1. The applicant company shall file with the MARINA an application in writing duly supported 

by the following: 

.1 Letter of Intent; 

.2 Articles of Incorporation or Partnership, Registration with the Bureau of Domestic 

Trade, Department of Trade and Industry, as the case may be; 

.3 List of company officers, together with their bio-data with head photographs; 

.4 List of instructors/trainors, together with their bio-data;



.5 Course outline/framework on the training of Ship Security Officer of Company 

Security Officer; and 

.6 Company tax identification number (TIN). 

2. The applicant company shall pay the processing fee of P15,000.00; and 

3. The Certificate of Accreditation shall be issued after determination by the MARINA that the 

maritime training center complies with the requirements/qualifications herein stipulated. 

1. The training centers/entities shall: 

V 

Reportorial Requirements 

.1 provide MARINA a list of the trainees who have completed the course and a 

certified true copy of the corresponding Certificate of Completion thus issued; 

.2 Inform the MARINA in writing of any change in the roster of instructors conducting 

maritime security courses; and 

.3 Inform the MARINA of the discontinuance of the maritime course offered. 

VI 

Sanctions and Penalties 

1. The following fines shall be imposed for violation of this Memorandum Circular after due 

notice and hearing: 

a. For operating with First Violation P50,000.00 

expired Certificate of Second Violation P100,000.00 

Accreditation Third and Succeeding P200,000.00 

Violations 

b. For issuing Certificate of P10,000.00 

Completion to a person/enrollee per certificate 

who did not actually attend 

the training (non-appearance) 

c. For failure to maintain the First violation P5,000.00 

conditions of accreditation Second violation P10,000.00 

under this Memorandum Third and succeeding P15,000.00 

Circular 

2. MARINA shall suspend/cancel the accreditation of a MARINA-accredited training center, 

after due notice and hearing, for the following grounds: 

2.1 Failure to maintain and abide by the provisions under this Circular or 

2.2 Willfull or gross violation of any of the terms and conditions of accreditation.


VII 

Effectivity Clause 

This Memorandum Circular shall take effect upon publication once in a newspaper of 




(SGD.) ELENITA C. DELGADO 

Deputy Administrator for Planning and Officer-in-Charge 

--o0o-- 

Flag State Administration Advisory No. 40 

Indemnity of P100,000.00 to Each Unmanifested Passenger 

Pursuant to the provisions of the Public Service Act (Commonwealth Act No. 146, as 

amended), Presidential Decree No. 474 (MARINA Charter), Executive Order No. 125/125-A. 

both series of 1987, the following advisory is hereby promulgated: 

1. All operators/owners of vessels operating in the domestic trade carrying passengers, and 

the masters, shipís officers and crew and all concerned must comply with the policy on ìNO 

TICKET NO BOARDINGî; 

2. All passengers must be manifested to ensure that the passengers whether ticketed, 

unticketed, minor (regardless of age), paying, non-paying, holding discounted or complimentary 

tickets and/or other accommodated passengers including those accompanying a 

vehicle or animals carried by contract of carriage, on board do not exceed the authorized 

passenger capacity of said vessel; 

3. Unmanifested passengers are entitled to the full payment of indemnity in the amount of 

P100,000.00 to be shouldered by the shipowner/s ship operator; 

4. Any vessel found to have unmanifested passengers shall be subject to suspension/revocation 

of its franchise or authority to operate (CPC/PA/SP) without prejudice to the filing of 

appropriate administrative, civil and criminal case (s) against crew, and cancellation of their 

licenses and Seafarerís Identification Record Book (SIRB), for the violation of existing rules 

and regulations; and, 

5. The Circular embodying the implementing rules of this Flag Administration Advisory shall 

be submitted to the MARINA Board. 


Adopted: 29 May 2003




(SGD.) OSCAR M. SEVILLA 

Administrator 

--o0o--- 


Drug and Alcohol Testing of All Seafarers Serving Onboard 

Passenger-Carrying Ships in the Domestic Trade 

In compliance with the six (6) point directive of President Gloria Macapagal Arroyo to 

further prevent future accidents at sea, and pursuant to Presidential Decree No. 474 and 

E.O. 125, as amended, the following guidelines are hereby promulgated: 

I 

Coverage 

This Flag State Administration Advisory shall cover all seafarers serving onboard passenger-carrying 

Philippine-registered ships in the domestic trade. 

II 


1. The use of prohibited drugs by any seafarer is strictly prohibited; 

2. The drinking of alcohol, or any beverage or drink containing alcohol, by any seafarer 

while onboard, whether on duty/watch or not, is likewise strictly prohibited. 

3. The testing for drug and/or alcohol use shall be conducted on a random basis, while the 

ship is in port or in transit, and shall be at the expense of the shipowner/ship operator; 

4. The testing for drug and/or alcohol use shall be mandatory and shall be conducted immediately 

after the occurence of a maritime accident or incident for all officers and crew of the 

ship/s involved therein; and, 

5. The results of all drug and alcohol tests conducted for each seafarer shall be reflected in 

his Seafarerís Identification and Record Book (SIRB) without prejudice to any administrative, 

civil or criminal action or proceeding which may be instituted against him by the 

aggrieved party/ies. 

III 

Companyís Drug and Alcohol Policy 

1. Within thirty (30) days from date hereof, all shipowners/ship operators of passengercarrying 

ships, as part of their Safety Management System (SMS), shall submit to this 

Authorityís Enforcement Office or the Maritime Regional Office concerned their drug and 

alcohol policy for evaluation and approval ;


2. An audit or re-audit in accordance with ISM or NSM, as appropriate, shall be conducted 

taking into consideration their drug and alcohol policy for evaluation and approval; 

3. The Master shall have the primary duty and responsibility in ensuring that the general 

provisions outlined in Rule II above, including the MARINA-approved drug and alcohol policy, 

are strictly observed and/or enforced by all concerned. 

IV. 

Amendment of Existing Circulars 

The necessary amendment of the relevant MARINA Memorandum Circular shall be 

submitted to the MARINA Board, after due consultation with the affected sectors, within thirty 

(30) days from date hereof. 

V 

Effectivity 

This Advisory shall take effect immediately. 






--o0o-- 


Progressive Retirement of Passenger-Carrying 

Wooden-Hulled Ships in the Domestic Trade 

In compliance with the six (6) point directive of President Gloria Macapagal Arroyo to 

further prevent future accidents at sea, and pursuant to Presidential Decree No. 474 and 

E.O. 125, as amended, the following guidelines are hereby promulgated: 

I 

Coverage 

This Flag State Administration Advisory shall cover all Philippine-registered woodenhulled 

ships carrying passengers in the domestic trade. 

II 

General Provisions



1. The operation of existing passenger-carrying wooden-hulled ships shall be gradually phased 

out. 

2. The continued operation of such passenger-carrying wooden-hulled ships shall be allowed 

subject to compliance with additional safety requirements as outlined in Rule III below. 

3. There shall be no approval of shipís plans and registration under Philippine flag of new 

construction/existing passenger-carrying wooden-hulled ships. 

4. The registration of newly-constructed/existing unregistered passenger-carrying woodenhulled 

ships under Philippine flag and the issuance/extension/renewal of franchise to such 

ships shall no longer be allowed. 

5. The entry of wooden-hulled ships in routes already served by steel-hulled, aluminum, 

fiberglass, or any other technologically-improved hull material shall not be allowed. 

III 

Retirement Period and Additional Safety Conditions for the Continued 

Operation of Existing Passenger-Carrying Wooden-Hulled Ships 

Taking into consideration the presence or absence of alternative shipping service/s in 

the areas affected and the natural and/or physical limitations of the ports served, the operation 

of existing passenger-carrying wooden-hulled ships shall be gradually phased out. These 

ships shall be allowed to continue their operation upon compliance with the following additional 

conditions to the existing safety and documentary requirements under the relevant 

laws, rules and regulations and MARINA Memorandum Circulars: 

TYPE OF RETIREMENT ADDITIONAL SAFETY ALTERNATIVE CONDITIONS 

OPERATION PERIOD CONDITIONS FOR FOR CONTINUED OPERATION 

& SHIP SIZE 

(A) (B) (C) (D) 

Passenger - Three (3) years from issuance 1. Must have passed the re- In case of non-compliance with 

carrying of implementing Circular inspection to be conducted all of the additional safety 

(250-499 GT) by the Joint Inspection Team; conditions in (C), but still 

and, compliant with other existing 

2. The minimum competency/ safety requirements, the ship 

license requirements for the shall be allowed to: 

Master shall be a 2nd Mate. 1. carry purely cargoes only; or 

2. carry passengers and cargoes 

provided it operates: (a) during 

daytime only; and (b) the minimum 

competency/license 

requirement for the Master shall 

be a 3rd Mate. 

Passenger- Five (5) years from issuance 1. Must have passed the re- In case of non-compliance with 

carrying of implementing Circular inspection to be conducted all of the additional safety 

(100-249 GT) by the Joint Inspection Team; conditions in (C), but still 

and, compliant with other existing 

2. The minimum competency/ safety requirements, the ship 

license requirement for the shall be allowed to: 

Master shall be at 3rd Mate. 1. carry purely cargoes only; or 


provided it operates: (a) during


daytime only; and (b) the minimum 

competency/license 


be a Major Patron. 

Passenger-carrying Seven (7) 1. Must have passed the re-inspection In case of non-compliance with 

(35-99 GT) years from to be conducted by the Joint all of the additional safety 

issuance of Inspection Team; in (C), but still compliant with 

implementing 2. The minimum competency/license other existing safety require- 

Circular requirement for the Master shall be a ments, the ship shall be allowed 

Major Patron; and, to: 

3. Daytime navigation only. 1. carry purely cargoes only; 


provided it operates; (a) during 

daytime only but not to exceed 

four (4) hours of travel time; and 

(b) the minimum competency/ 

license requirement for the 

Master shall be a Minor Patron. 

Passenger- Ten (10) years 1. Must have passed the re-inspection In case of non-compliance with 

carrying (3-34 GT) from issuance to be conducted by the Joint all of the additional safety 

of implementing Inspection Team; conditions in (C), but still 

Circular 2. The minimum competency/license compliant with other existing 

requirement for the Master shall be safety requirements, the ship 

a Minor Patron; and shall be allowed to: 

3. Daytime navigation only but not 1. carry purely cargoes only; or 

to exceed four (4) hours of travel 2. carry passengers and cargoes 

time. oprovided it operates: (a) during 

daytime only but not to exceed 

(2) hours of travel time; and (b) 

minimum competency/license 


be a Boat Captain. 

Passenger- none 1. Must have passed the re-inspection In case of non-compliance with 

carrying to be conducted by the Joint all of the additional safety 

(below 3GT) Inspection Team; conditions in (C), but still 

2. The minimum competency/license compliant with other existing 

requirement for the Master safety requirements, the ship 

shall be a Boat Captain; and, shall be allowed to carry purely 

3. Daytime navigation only but not cargoes only. 

to exceed two (2) hours of travel 

time within bay/river trade. 

Provided, further, that only shipís officers and ratings with valid Seafarerís Identification 

and Record Book (SIRB) and Qualification Document Certificate (QDC) or 1995 STCW 

Certificate shall be allowed to serve on board; and provided, finally, that proof of completion 

of Recurrency Training, Crowd/Crisis Management and Behavior Training, Radio Telephony 

Communication & Radar Operation and Plotting Course, Ship Restricted Radio Operatorís 

Course (SRROC) and Prevention of Alcohol and Drug Abuse in the Maritime Sector, as 

applicable, are submitted. 

IV 

Transitory Provisions 

The above provisions, notwithstanding, existing operators of wooden-hulled passenger 

and/or cargo ships in routes which have no alternative passenger and/or cargo shipping



services shall be allowed to continue to operate until the entry of new operators therein with 

more modern or technologically advanced shipping services. 

V 

Institutional Support Mechanism 

1. Within three (3) months from date hereof, the MARINA shall, in close coordination with the 

Development Bank of the Philippines (DBP) and the Board of Investments (BOI), develop the 

appropriate loan packages and incentives for the acquisition of replacement ships by existing 

wooden-hulled operators. 

2. Within six (6) months from date hereof, the MARINA shall develop a standard ship design 

for the replacement of such wooden-hulled ships. 

VI 

Amendment of Existing Circulars 

The necessary amendment of the relevant MARINA Memorandum Circulars shall be 

submitted to the MARINA Board, after due consultation with the affected sectors, within thirty 

(30) days from date hereof. 

VII 

Effectivity 

This Advisory shall take effect immediately. 






--o0o-- 


Mandatory Filling-Up by All Passengers in the 

Domestic Trade of a Health Checklist Form 

Pursuant to P.D. No. 474, the Public Service Act (Commonwealth Act, 146), as amended, 

and Executive Order 125, as amended, and in support to the governmentís program of a 

SARS-FREE Philippines, the following advisory is hereby promulgated: 

1. All passengers of domestic ships shall be required to fill up/accomplish a HEALTH CHECK- 

LIST FORM designed by the Bureau of Quarantine, Department of Health, PRIOR TO 

DISEMBARKATION.


2. The Shipowner/Ship Operator shall designate a ship personnel to act as Ship Health 

Officer to supervise the distribution and collection of said forms. 

3. Passengers who manifest or exhibit any sign or symptom indicated in the HEALTH CHECK- 

LIST FORM must be immediately reported by the Ship Health Officer to the nearest SARS 

Center of the Department of Health, Bureau of Quarantine, Local Health Center, Local SARS 

Action Center, National Epidemiology Center, whichever is available in the area. 

4. Whenever practicable, the HEALTH CHECKLIST FORM shall be translated in the local 

dialect. 

5. The Implementing Circular embodying the rules of this Flag State Administration Advisory 

shall be subsequently submitted to the MARINA BOARD for its approval. 

FOR STRICT COMPLIANCE. 



(SGD.) ATTY. OSCAR M. SEVILLA 


--o0o-- 


Rules on the Accreditation of Maritime Enterprises 

Pursuant to Paragraph 2, Section 4 of Presidential Decree (PD) No. 474 and Section 

14(a) and (i) of Executive Order No. 125, as amended, the following rules on the accreditation 

of maritime enterprises were adopted by the Maritime Industry Board in its meeting on 09 

July 2003. 

I. Objectives 

1. To promote the growth and development of maritime-related activities thereby contribute 

to the economic progress of the country; and, 

2. To regulate and supervise maritime enterprises with the end in view of formulating policies 

and programs that will encourage investments in maritime-based activities thereby support 

the shipping industry. 

II. Coverage 

1. All persons, corporations, firms and other entities engaged or shall engage in ship agency, 

husbanding, ship chandling, ship breaking and similar enterprises. 

III. Definition of Terms



1. Administration refers to the Maritime Industry Authority (MARINA); 

2. Maritime Enterprises include any ship manager, ship agent, multimodal transport operator, 

and any other similar enterprise whose activities consist of representing, within the 

Philippines, as an agent, the business interests of one or more shipping line or shipping 

companies. 

IV. General Provisions 

1. A Maritime enterprise as defined herein except those covered by a separate accreditation 

mechanism imposed by the Administration must be accredited under this Memorandum 

Circular; 

2. The applicant must have a minimum paid-up capital of Five Hundred Thousand Pesos 

(P500,000.00); 

3. Registration under this Circular shall be valid for a period of three (3) years only and may 

be renewed for the same number of years. 

V. Requirements/Procedure for Registration: 

1. The applicant company shall file with the MARINA an application in writing duly supported 

by the following: 

a. List of principal officers/Name of Proprietor supported by bio-data with head photographs 

and indicating shipping related experience; 

b. List of ship(s) owned, if there is any; 

c. Latest Certification from the Securities and Exchange Commission (SEC) of the companyís 

increase of paid-up capitalization, (if applicable); 

d. Company Tax Identification Number (TIN); and, 

e. Any of the following whichever is applicable: 

l Certificate of Registration with the SEC, together with the Articles of 

Incorporation and By-Laws (for Corporation/Partnership); 

l Registration of Business Name issued by the Department of Trade and Industry 

(for Single Proprietorship). 

2. Only applications with complete requirements shall be accepted. Mailed applications that 

are incomplete shall be immediately returned to the applicant; 

3. The applicant company shall pay the processing fee of P5,000.00; 

4. The Certificate of Accreditation shall be issued after determination that the company 

complies with the requirements/qualifications herein stipulated.


VI. Reportorial Requirement 

A MARINA-accredited enterprise shall submit the following reports and/or documents 

in original or true copy forms duly attested by a responsible officer of the accredited enterprise, 

independent auditor, or proper government agency; 

a. Amendment of Articles of Incorporation or By Laws within thirty (30) days from the 

date of registration of said amendment with the SEC; 

b. Replacement of any director or any principal officer within thirty (30) days from date of 

replacement; 

c. Audited annual financial statements on or before 15 May of the following year; and 

d. Change of business address/location. 

VII. Suspension/Cancellation of Accreditation and Penal Provisions 

1. The MARINA shall, after due investigation, suspend/cancel the accreditation of MARINAaccredited 

enterprise for the following grounds: 

a. Failure to maintain the provisions under this Circular; and, 

b. Willful or gross violation of any of the terms and conditions of accreditation. 

2. Companies operating with expired Certificate of Registration shall be required to pay 

fines/penalties in accordance with the following schedule: 

First Violation - P10,000.00 

Second violation- P20,000.00 

Third violation- P25,000.00 

VIII. Transitory Provision 

Maritime enterprises accredited prior to 01 January 2001 pursuant to Memorandum 

Circular (MC) No. 9 shall be required to renew their accreditation upon effectivity of this 

Circular. 

Following is the schedule of re-accreditation for those companies accredited under 

MC-9 on or after 01 January 2001: 

Year accredited under MC-9 Year required for re-accreditation 

January to December 2001 Year 2004 to correspond with the 

January to December 2002 Year 2005 month of previous 

January to July 2003 Year 2006 accreditation 

IX. Repealing Clause 

Memorandum Circular No. 9 is hereby repealed. All Memorandum Circulars, rules and 

regulations and issuances inconsistent herewith are hereby amended or repealed accordingly.



X. Effectivity Clause 

This Memorandum Circular shall take effect fifteen (15) days after its publication once 






óo0oó 

Flag State Administration Advisory No. 45, s. 2003 

Extension of Moratorium on Compliance with Certain 

Life-Saving Appliances Required under the PMMRR 

Notice is hereby given to all concerned, that upon the request of the concerned shipping/ 

fishing associations/operators to fully discuss and finalize the drafted policy on the revised 

rules and regulations under Chapter IX of the 1997 PMMRR, a two (2) month extension, from 

06 August 2003, of the moratorium agreed upon among the MARINA, PCG and affected 

shipping/fishing associations and shipowners/operators on 06 August 2002 is hereby adopted. 

Accordingly, the existing flotation device/buoyant apparatus or equivalent survival craft currently 

being used on board affected ships shall continue to be accepted for purposes of Certificate 

of Inspection (CI) issuance. 






óo0oó 

Flag State Administration Advisory No. 46, s. 2003 

Revised Class Requirement for Philippine-Registered Domestic Ships 

As approved by the MARINA Board of Directors during its Special Board Meeting on 

11 August 2003, notice is hereby given to all concerned that the existing policy on the 

mandatory requirement for Philippine-registered domestic ships to be classed, pursuant to 

MARINA M.C. No. 124, as amended shall be revised to effect the following: 

I. Expanded Coverage of Ships Required to be Classed


All passenger-carrying ships, 3 GT and above, regardless of hull material, whether 

existing or to be acquired and registered under the Philippine flag, shall be required to be 

classed by government-recognized/accredited classification societies. 

II. Guidelines and Requirements for Implementation 

1. Convention-sized †-carrying ships (e.g. 500 GT and over), which are not yet classed, 

shall immediately be applied for classification (under existing rules for such) with any of 

the government-recognized/accredited classification societies. 

2. Non-convention-sized steel-hulled passenger-carrying ships covered by the herein 

requirement, which are not yet classed, shall likewise immediately be applied for 

classification (under existing rules for such) with any of the government recognized/ 

accredited classification societies. 

3. In classing non-convention sized wooden-hulled passenger-carrying ships covered by† 

the herein requirement, the MARINA shall prescribe and issue the necessary standards 

on key elements relevant to such vessel type, as outlined hereunder: 

l General Provisions (Coverage, Definitions) 

l Materials and Workmanship 

l Basis for calculations of scantlings 

l Keelson, Keel and Frames 

l Outside Plankings 

l Deckhouse/Superstructure/Mast & Riggings 

l Miscellaneous (Outrigger & Floaters, etc.) 

l Machineries (Main Engine, Auxilliaries, †Dumping/Drainage, Machinery Foundations, 

Chains/Anchors, Steering/Tiller, Hatch Coaming, Ventilator) 

l Underwater appendages 

On the basis of such Administration-prescribed standards, government-recognized/accredited 

classification societies shall come up with and adopt the corresponding Class 

Rules to be used, and submit such for MARINAís review, evaluation and approval; 

4. Only upon approval by the MARINA of the submitted Class Rules and issuance of the 

corresponding Certificate of Authority to Class, shall the government-recognized/accredited 

classification societies be authorized to class non-convention sized wooden-hulled 

passenger-carrying ships. 

5. The government-recognized/accredited classification societies are enjoined to adopt reasonable 

fees and charges for small to medium-sized shipowners/operators, with the Administration 

subsequently prescribing caps for such fees and charges after due consultation/discussion 

with the concerned recognized/accredited organizations. 

6. The Administration shall undertake verification and monitoring of activities in the classing 

of ships provided herein, to ensure the adequacy of work performed by the concerned 

recognized/accredited organizations authorized to act in its behalf. 

III. Timetables for Compliance



1. For owners/operators of all conversion-sized passenger-carrying ships covered under 

Sec. I hereof, they are given until 30 September 2003 to initiate compliance with the 

herein prescribed class requirement, and submit proof of such initiation on or before 

such date. 

2. For owners/operators of all steel-hulled, non-convention sized, passenger-carrying 

ships covered under Sec. I hereof, they are given until 30 October 2003 to initiate 

compliance with the herein prescribed class requirement, and submit proof of such initiation 

on or before such date. 

3. For owners/operators of all wooden-hulled, non-convention sized, passenger carrying 

ships covered under Sec. I hereof, they are given until 30 December 2003 to initiate 

compliance with the herein prescribed class requirement, and submit proof of such initiation 

on or before such date. 

IV. Sanctions and Penalties 

1. Ships covered which fail to submit to the Franchising Office the certificate/proof of being 

in the process of complying with the requirement, or having been classed, after the 

prescribed due dates, shall be immediately ordered to cease and desist from operating, 

and their authority to operate (SP, PA, CPC) shall be suspended and/or revoked, after 

due process. 

2. Ships covered found and proven to be operating without having complied with the class 

requirement, as well as other violations related to the implementation of and compliance 

with the class requirement shall be imposed the prescribed fines/penalties under M.C. No. 

120, or its amendments, and other applicable laws, rules and regulations. 

IV. Amendments of Existing Circulars 

The necessary amendment of the relevant MARINA Memorandum Circulars shall be 

submitted to the MARINA Board, after due consultation with the affected sectors. 

For the information and guidance of all concerned. 





óo0oó 


Revised Rules on Annual Supervision Fee 


U.P. Law Complex, Diliman, Quezon City





--o0o-- 


Revised Rules on the Mandatory Submission of 

Annual Report of Finances and Operations 




--o0o-- 


Rules on the Progressive/Gradual Phase Out of 

Wooden-Hulled Ships in the Domestic Trade 

Pursuant to Presidential Decree No. 474, E.O. 125, as amended, and Flag State 

Administration Advisory No. 43, the following rules are hereby prescribed: 

I. COVERAGE 

This Memorandum Circular shall cover all Philippine-registered wooden-hulled ships in 

the domestic trade except: 

1. those below 3 GT and other motor bancas belonging to the 3-35 GT shipís size category 

trading within protected waters; 

2. those ships which are solely or exclusively utilized in DOT-identified tourist destinations 

provided that their travel time from port-to-port shall not exceed one (1) hour and that they 

shall operate only in partly protected waters (cruising only); and, 

3. fishing vessels. 

II. OBJECTIVES 

1. To further enhance and ensure the safety of life and property at sea; 

2. To accelerate fleet modernization of ships plying in the domestic trade; and, 

3. To provide rules on the progressive/gradual phase out of wooden-hulled ships in the 

domestic trade. 

III. GENERAL PROVISIONS

1500 


1. The operation of existing wooden-hulled ships shall be gradually phased out, except those 

mentioned under Rule 1 hereof. 

2. The continued operation of existing wooden-hulled ships covered under this Circular shall 

be allowed subject to compliance with the additional safety requirements as outlined in 

Rule IV below. 

3. The Administration will issue, within sixty (60) days from effectivity hereof, the standards 

for wooden-hulled ships which will serve as basis for the development of classification 

rules. 

4. There shall be no approval of shipís plans and/or registration under Philippine flag of new 

construction, whether locally or abroad and existing unregistered or existing unfranchised 

wooden-hulled ships, except those mentioned under Rule I and subject further to the 

restrictions under Rule VI below. Likewise, the issuance/extension/renewal of Certificate 

of Public Convenience (CPC)/Provisional Authority (PA)/Special Permit (SP) to such 

ships shall no longer be allowed. 

5. The entry of wooden-hulled ships in routes already served by steel-hulled, aluminum, 

fiberglass or any other technologically-improved hull material shall no longer be allowed. 

6. The continuing training of shipís officers and ratings as prescribed under Sec. 1.3 of rule 

IV below shall be strictly enforced. Further, the mandatory testing/actual demonstration of 

skills/competence of such officers and ratings shall be pursued. 

7. Fishing vessels shall be strictly prohibited to carry passengers (whether paying or nonpaying) 

and/or to operate for commercial purposes. 

IV. SPECIFIC PROHIBITIONS 

1. Wooden-hulled ships may still be allowed to continue their operation until their phase out 

period only upon compliance with the following additional conditions and service restrictions 

to the existing safety and documentary requirements under the relevant MARINA 

Memorandum Circulars, laws, rules and regulations, as follows: 

____________________________________________________________________________ 

SHIP SIZE PHASE OUT PERIOD ADDíL SAFETY CONDITIONS AND SERVICE 

CATEGORY (B) RESTRICTIONS FOR CONTINUED 

(A) OPERATION PRIOR TO PHASE OUT 

(C) 

_________________________________________________________________________________ 

Over 100-500 Three (3) years from 1. Must have passed the re-inspection to be conducted 

GT effectivity of this Circular by the PCG using the Wooden-Hulled Ship Inspection 

Checklist attached as Annex ìA*î and made an integral 

part of this Circular; 

2. The minimum competency/license requirement for 

the Master shall be that of a 2 nd Mate with one (1) year 

actual sea service as Deck Officer and may employ a 

Major Patron as Deck Officer with Qualification 

Document Certificate (QDC); 

3. Daytime operations only 

Over 35-100 Five (5) years from 1. Must have passed the re-inspection to be conducted 

GT effectivity of this Circular by the PCG using the Wooden-Hulled Ship Inspection 

Checklist attached as Annex ìA*î and made an integral 

part of this Circular;


2. The Minimum competency/license requirement for 

the Master shall be that of a Major Patron and may 

employ a Minor Patron as Deck Officer with QDC; and, 

3. Daytime operations only in protected/partly-protected 

waters. 

3-35 GT Seven (7) years from 1. Must have passed the re-inspection to be conducted 

effectivity of this Circular by the PCG using the Wooden-Hulled Ship Inspection 

Checklist attached as Annex A* and made an integral part 

of this Circular; 

2. The minimum competency/license requirement for the 

Master shall be a Minor Patron/Boat Captain; and 

3. Daytime operations only in protected/partly-protected 

waters. 

The additional safety conditions and service restrictions for continued operation prior 

to phase out under column (C) above shall be complied with by the shipowner/ship operator 

not later than sixty (60) days from effectivity of this Circular. 

2. The upgraded minimum competency/license requirement for masters as prescribed above 

for each ship size category shall likewise apply to steel-hulled ships. 

3. The continued operation of wooden-hulled ships below 3GT and other motor bancas 

belonging to the 3-35 GT ship size category shall, however, be subject to the following 

additional conditions: 

a. the ship must have passed the re-inspection to be conducted by the PCG 

using the appropriate Ship Inspection Checklist (Annex ìAî*); 

b. the minimum competency/license requirement for the Master shall be a Boat 

Captain; and, 

c. daytime operations only within protected waters. 

5. Only shipís officers and ratings with valid Seafarerís Identification and Record Book 

(SIRB) and Qualification Document Certificate (QDC) or 1995 STCW Certificate shall be 

allowed to serve on board. Further, said officers and ratings must submit proof of completion 

of the following recurrency and other training programs, as applicable: 

l Safe Navigation and Collision Regulation 

l Crowd/Crisis Management and Behavior Training for Personnel Serving Onboard 

Domestic Passenger Ships 

l Deck Watchkeeping in the Domestic Trade 

l Engine Watchkeeping in the Domestic Trade 

l Prevention and Control of HIV-AIDS, Alcohol and Drug Abuse in the Maritime Sector 

l Radio Telephony Communications and Radar Operation and Plotting for Major/Minor 

Patron engaged in the Domestic Trade 



1502 


l Ship Cargo Handling and Stability 

l Ship/Company Security 

4. All valid and existing CPCs/PAs/SPs issued to wooden-hulled ships are hereby ordered 

amended or modified accordingly by the above provisions. For this purpose, the Original 

Copy of the CPC/PA/SP shall be surrendered to the MARINA prior to the issuance of the 

amended certificates. 

V. COMPUTATION OF CPC VALIDITY 

1. Prior to determining the CPC validity of affected wooden-hulled ships, the shipsí age 

shall be deducted from the maximum economic life of such ship to arrive at the remaining 

economic life. The maximum economic life of a wooden-hulled ship, except motor bancas, 

is twenty (20) years. 

2. The CPC validity shall be equal to the shipís remaining economic life if its phase out 

period is longer than or equal to the shipís remaining economic life. 

3. If the shipís remaining economic life is longer than its phase out period, the CPC 

validity shall be equivalent to its phase out period. 

4. No CPC shall be issued if the ship has already reached its maximum economic life. 

5. In no case shall the CPC validity exceed the phase out period of the affected woodenhulled 

ship. 

6. The CPC validity of motor bancas shall be equivalent to two (2) years per issuance or 

maximum of eight (8) years in four (4) issuances. 

VI. TRANSITORY PROVISIONS 

1. Subject to compliance with the additional safety conditions and service restrictions for 

operation prior to phase out under Rule IV hereof, existing operators of wooden-hulled 

passenger and/or cargo ships may be allowed to continue in operation provided that: 

1.1 there are no alternative passenger and/or cargo shipping services provided in the 

route/s presently served by them until the entry of new operators therein with more modern 

or technologically advanced shipping services that can adequately provide the required 

service or serve as an improvement over the existing ships operating therein, either 

in terms of age, size, capacity, hull material or other technical features. The instances 

allowing the entry of new operators in routes already served by existing operators as 

prescribed in Sec. IV.3.c of Memorandum Circular No. 161 and its subsequent amendments, 

including all relevant provisions thereof, are hereby incorporated herewith; or, 

1.2 there is absence of facilities for steel-hulled ships and/or there are natural and/or 

physical limitations of the ports served until such time that the said port limitations are 

addressed. 

2. Wooden-hulled ships which are 75% newly-built or completed, repaired or rehabilitated 

or converted/altered as of the effectivity of this Circular, whose shipís plans were previ-


ously approved by the MARINA, may still be allowed to be registered under Philippine flag 

and subsequently qualified for issuance of CPC/PA/SP. The MARINA shall require the 

presentation of proof of such 75% completion/rehabilitation/conversion/alteration subject 

to actual inspection and/or verification thereof. It is understood, however, that the same 

ships shall still be subject to the phase out period as prescribed under Rule IV hereof. 

VII. INSTITUTIONAL SUPPORT MECHANISMS 

1. Within three (3) months from date hereof, the MARINA shall, in close coordination with 

the Development Bank of the Philippines (DBP) and the Board of Investments (BOI), 

develop the appropriate and affordable financing scheme and incentives for the acquisition 

of replacement ships by existing wooden-hulled operators. 

2. Within six (6) months from date hereof, the MARINA shall develop a standard ship design 

and alternative boat-building technology (steel, fiberglass, aluminum, etc) for the replacement 

of such wooden-hulled ships. 

VIII. SANCTIONS AND PENALTIES 

Following the summary administrative procedure under Memorandum Circular No. 74- 

A, the applicable fines and penalties under Memorandum Circular No. 120, and its subsequent 

amendments, shall be imposed on the shipowner/ship operator who have found to have 

committed any violation of this Circular. 

IX. REPEALING CLAUSE 

The Minimum Safe Manning Scale for steel-hulled ships under Rule VI of MARINA 

Memorandum Circular No. 148 is hereby amended/modified accordingly. All other issuances, 

rules and regulations, Circulars, Orders and Decisions inconsistent with this Circular are 

hereby amended/modified accordingly. 

X. SEPARABILITY CLAUSE 

Should any provision or part of this Circular be declared by the competent authority to 

be invalid and unconstitutional, the remaining provisions or parts thereof shall remain in full 

force and effect and shall continue to be valid and effective. 

XI. EFFECTIVITY CLAUSE 

This Memorandum Circular shall take effect immediately upon its publication once in a 

newspaper of general circulation in the Philippines. 


BY AUTHORITY OF THE BOARD: 



--o0o--

1504 




Rules in the Conduct of Drug and Alcohol Testing of all Seafarers and 

Other Personnel Serving Onboard Ships Engaged in the Domestic Trade 

Pursuant to Presidential Decree No. 474 and Executive Order 125, as amended, and in 

compliance with Flag State Administration Advisory No. 42, the Maritime Industry Authority 

(MARINA) Board, hereby prescribes the following rules: 

I. OBJECTIVES 

1. To minimize the occurrence of incidents/accidents at sea; 

2. To further promote maritime safety by conducting random drug and alcohol testing on all 

seafarers and other personnel serving onboard domestic ships; and, 

3. To promote a Drug and Alcohol-Free workplace in support of the Drug Free Philippines 

2010 Program. 

II. COVERAGE 

These rules shall apply to all seafarers and other personnel employed or to be employed 

onboard Philippine-registered ships of at least 3 GT engaged in the domestic trade. 

III. DEFINITION OF TERMS 

1. Alcohol - refers to a most commonly abused substance in liquid form produced by 

fermentation that depresses the nervous system and removes partly or fully a personís 

inhibitions. 

2. Analysts - refers to the individual who performs examination, certifies results and is 

responsible for the chain of custody of tests conducted. 

3. Seafarer - refers to a shipís complement consisting of officers and ratings, and other 

crew such as deck/engine cadets, ordinary seamen, wipers, messmen, cooks, etc. 

4. Cut-off - refers to the concentration used to establish and report a specimen as negative 

or positive. 

5. Dangerous Drugs - are substances that modify and alter a personís judgment, disposition 

and behavior when taken indiscriminately and without proper supervision. 

6. DOH - refers to the Department of Health or official representative of the Secretary of 

Health. 

7. DOH-licensed and accredited Instrument Screening Drug Testing Laboratory (ISDTL) 

- refers to a laboratory in a permanent location that conducts drug and testing using 

validated test Kits and Alcohol Testing.


8. DOH-licensed and Accredited Laboratory (LAL) - refers to a laboratory where confirmatory 

drug and alcohol testing are performed (if necessary) under the supervision of 

the head of the laboratory and where analysts perform the final review and release of test 

results. 

9. Laboratory - refers to a private or government facility that is capable of testing a specimen 

to determine the presence of dangerous drugs therein. 

10. National Reference Laboratory (NRL) - refers to the National Reference Laboratory 

for Environmental and Occupational Health, Toxicology & Micronutrients assay designated 

by the Secretary of Health. It is a laboratory capable of doing screening and 

confirmatory laboratory services, training of surveillance and external quality assurance 

program for laboratory tests. Whenever the drug testing laboratory result is challenged, 

the NRL shall make the final decision. 

11. Screening Test - refers to a test to eliminate negative specimen from further consideration 

and to identify the presumptively positive specimen that requires confirmatory 

testing. 

12. Confirmatory Testing - refers to the analytical procedure to identify and quantify the 

presence of a specific drug or metabolite, which is independent of the initial test which 

uses a different technique and chemical principle from that of the screening test in order 

to ensure reliability and accuracy. 

13. Specimen - refers to the fluid or material derived from the body subjected for testing. 

14. Sample - refers to a representative portion of a specimen or quality control material 

used for testing. 

15. Negative Result - refers to the result reported the DOH-licensed and accredited laboratory 

analyst to the Head of the laboratory when a specimen contains no drugs or the 

concentration of drugs/alcohol is less than the cut-off concentration. 

16. Positive Result - refers to the result reported by a laboratory when a specimen contains 

drugs or drug metabolite/alcohol greater than or equal to the cut-off concentration. 

17. Random Testing - refers to a test performed on a specimen collected from a client/ 

donor/subject who is selected at random from a group of individuals. 

18. Other Personnel - refers to a person or group of persons providing personal and/or 

direct services to passengers on board like hotel-restaurant, housekeeping managers, 

supervisors and personnel like cabin attendants, waiters/waitresses, barmaids, bartenders, 

entertainers, beauticians, shipís security officers/guard, shops/storeís staff, including 

front desk officers, etc. 

19. Ship In-Port - refers to ship/s at berth to its port of call/destination. 

20. Ship In-transit - refers to ship/s underway/enroute to its port of call/destination.

1506 


21. Act - refers to Republic Act No. 9165 otherwise known as ìThe Comprehensive Dangerous 

Drugs Act of 2002.î 

22. Seafarerís Identification and Record Book (SIRB) - refers to a document issued by 

the Maritime Industry Authority to all Filipino seafarers and others including cadets to 

provide the holders with identity papers and record of their sea service. 

IV. GENERAL PROVISIONS 

1. The intake of dangerous drugs by any seafarer and other personnel is strictly prohibited. 

2. The drinking of alcohol, or any beverage or drink containing alcohol, by any seafarer and 

other personnel while on board whether on duty/watch or not, is likewise strictly prohibited. 

3. All shipowners/ship operators are hereby directed to submit, within sixty (60) days from 

effectivity of this Circular, to the Maritime Safety Office or the concerned Maritime Regional 

Office (MRO), their drug and alcohol policy as part of their Safety Management 

System. 

4. An audit or re-audit, in accordance with International Safety Management (ISM) Code or 

the National Safety Management (NSM) Code, as appropriate, shall be conducted taking 

into consideration the shipownerís ship operatorís drug and alcohol policy. 

5. The NSM/ISM Manual pertaining to the prohibition of drug/alcohol intake at the workplace 

shall be strictly observed and enforced. 

6. The testing for drug and/or alcohol use shall be conducted on a random basis, while the 

ship is at port or in transit, and the expense/s incurred therein shall be borne by the 

shipowner/ship operator. 

7. In case of a maritime incident or accident, the testing for drug and/or alcohol use shall be 

mandatory and shall be immediately conducted on all seafarers and other personnel of 

the ship/s involved therein but not later than twenty four (24) hours after the occurence of 

such accident or incident. 

8. The results of all drug and alcohol tests conducted for each seafarer or other personnel 

shall be reflected in his Seafarerís Identification and Record Book (SIRB) without prejudice 

to any administrative, civil or criminal action or proceeding which may be instituted 

against him. 

V. SPECIFIC PROVISIONS 

1. A Medical Team of a DOH-ISDTL, together with the MARINA-PCG Inspection Team, shall 

go on board the ship to conduct a random testing on drugs and alcohol based on the 

MARINA-determined schedule and random sample design. The teams shall be in proper 

uniform and with proper identification at all times. 

2. The Medical Team, and the MARINA-PCG Inspection Team shall be responsible in the 

transport of the screened specimen from the ship to the DOH-LAL for confirmatory testing.


3. Any seafarer or other personnel found positive for drug and alcohol screening test shall 

not be allowed to perform his duties as a seafarer or other personnel on board pending 

the results of the confirmatory testing. 

VI. TESTING PROCEDURE 

1. The Medical Team shall board the ship and shall hold a pre-inspection meeting with the 

Master and/or any of his duly authorized representative/s regarding the purpose and 

procedures of the inspection. 

2. The Medical Team shall then proceed to conduct the drug and alcohol testing on seafarers 

and other personnel whom they randomly selected during the pre-inspection meeting. 

3. A post-inspection meeting shall immediately follow to inform the Master or any of his duly 

authorized representative/s on the results thereof. 

4. The results of the medical examination of those who have been initially found positive for 

drugs and alcohol shall be confirmed by a DOH-LAL. 

5. Any seafarer or other personnel found to be positive in the screening/confirmatory testing 

may challenge said result within fifteen (15) days from receipt thereof. 

6. The MARINA, the shipowner/ship operator and the DOH-ISDTL shall be furnished copies 

of the final result of the drug and alcohol testing by the DOH-LAL within fifteen (15) days 

from the day the testing was conducted. Such result/s of testing shall serve as basis for 

the issuance of the appropriate Show Cause Order and/or Cease and Desist Order by the 

MARINA against the seafarer or other personnel and the shipowner/ship operator, as 

appropriate. 

VII. ADMINISTRATIVE SANCTIONS 

1. A seafarer or other personnel who shall be found positive from drugs and/or alcohol shall 

be liable, after due process, to the following fines/penalties: 

First Offense Suspension of SIRB and/or QDC 

Second and Succeeding Cancellation of SIRB and/or QDC 

Offense with recommendation to 

to PRC to revoke his/her license 

2. Any shipping company/operator which shall allow a seafarer or other personnel found 

positive from drug/alcohol to go on board/join a ship shall be liable, after due process, to 

the following fines/penalties: 

First Offense Suspension of PA/CPC 

Second and Succeeding Cancellation of PA/CPC 

Offenses

1508 


3. Any shipowner/operator covered by this Circular that fails to submit its drug and alcohol 

policy shall be imposed a penalty of Fifty Thousand Pesos (P50,000.00) without prejudice 

to suspension of operation. 

4. Any deliberate misrepresentation/submission of false reports/findings by a DOH-ISDTL 

shall, after due process, be imposed a penalty of P50,000.00 without prejudice to any 

administrative, civil or criminal action or proceeding which may be instituted against them. 

VIII. REPEALING CLAUSE 

All MARINA Memorandum Circulars, rules and regulations, orders and issuances 

inconsistent herewith shall be deemed repealed or amended accordingly. 

IX. EFFECTIVITY 

This Memorandum Circular shall take effect immediately after its publication once in a 




BY AUTHORITY OF THE BOARD: 



--o0o-- 


Rules on the Implementation of Maritime Security Measures for 

Philippine-registered Ships Engaged in International Voyages 

Pursuant to the provisions of Presidential Decree No. 474 and Executive Order No. 

125, as amended, and in conformity with Chapter XI-2 on the Enhancement of Maritime 

Security of the International Convention for the Safety of Life at Sea (SOLAS), 1974, as 

amended, and the International Code for the Security of Ships and Port Facilities (ISPS 

Code), the following rules on the implementation of maritime security in the Philippines was 

approved by the Maritime Industry Board in its meeting on 11 August 2003. 

I. OBJECTIVES 

1. To provide specific guidelines in the implementation of Chapter XI-2, SOLAS, 1974, as 

amended, and the International Code for the Security of Ships and Port Facilities; 

2. To establish the roles and responsibilities of companies operating ships registered in the 

Philippines and the crew on board such ships in maintaining security of ships in accordance 

with SOLAS, 1974 as amended and the ISPS Code;


3. To ensure that adequate and proportionate maritime security measures are in place on 

Philippine-registered ships; and 

4. To ensure the efficient generation and exchange of updated security-related information. 

II. COVERAGE 

1. All companies operating/managing Philippine-registered ships engaged in international 

voyages. 

2. All Philippine-registered ships engaged in international voyages under the following categories: 

.1 passenger ships including high-speed passenger crafts regardless of size; 

.2 cargo ships, including high-speed crafts, of 500 gross tonnage or more; 

.3 mobile offshore drilling units. 

3. All Philippine-registered ships or primarily engaged in domestic trade but temporarily 

allowed by the Administration to undertake international voyages. 

4. This Circular does not apply to †warships, naval auxilliaries or other ships owned or 

operated by the Government of the Philippines and used only on government non-commercial 

service. 

III. DEFINITIONS 

1. Administration refers to the Maritime Industry Authority (MARINA); 

2. Contracting Government refers to the duly authorized officers of the port facility or the 

control officers of a state within whose territory ship covered by this Circular may call/ 

undertake ship/port interface. 

3. Company refers to the owner of the ship or any other organization or person such as the 

manager, or the bareboat charterer, who has assumed the responsibility for operation of 

the ship from the shipowner and who on assuming such responsibility has agreed to take 

over all the duties and responsibilities imposed by the Code. 

4. Ship/port interface means the interactions that occur when a ship is directly and immediately 

affected by actions involving the movement of persons, goods or the provisions of 

port services to or from the ship; 

5. Port facility is a location, as determined by the contracting Government or by the Designated 

Authority, where the ship/port interface takes place. This includes areas such as 

anchorages, waiting berths and approaches from seaward, as appropriate. 

6. Security incident means any suspicious act or circumstance threatening the security of 

a ship, including a mobile offshore drilling unit and a high speed craft, or of a port facility 

or of any ship/port interface or any ship to ship activity.

1510 


7. Security level means the qualification of the degree of risk that a security incident will be 

attempted or will occur. 

8. Declaration of security means an agreement reached between a ship and either a port 

facility or another ship with which it interfaces specifying the security measures each will 

implement. 

9. Recognized security organization means an organization with appropriate expertise in 

security matters and with appropriate knowledge of ship and port operations authorized to 

carry out an assessment, or a verification, or an approval or a certification activity, required 

by Chapter XI-2 of SOLAS 1974 as amended or by Part A of the ISPS Code and 

this Circular. 

10. Ship means a Philippine registered to which this Circular is applicable. 

11. Ship Security Plan (SSP) a plan developed to ensure the application of measures on 

board the ship designed to protect persons on board, cargo, cargo transport units, ships 

stress or the ships from the risks of a security incident. 

12. Ship Security Officer (SSO) the persons on board the ships, accountable to the 

master designated by the company and responsible for the security of the ship, including 

implementation and maintenance of the ship security plan and for liaison with the company 

security officer and port facility security officers. 

13. Company Security Officer (CSO) the person designated by the company for ensuring 

that a ship security assessment is carried out; that a ship security plan is developed, 

submitted for approval, and thereafter implemented and maintained and for liaison with 

port facility security officers and the ship security officer. 

14. ISPS Code means the International Code for the Security of Ships and Port Facilities. 

IV. GENERAL PROVISIONS 

1. Companies and ships covered by this Memorandum Circular shall by 01 July 2004 comply 

with the requirements of Chapter XI-2 on the Enhancement of Maritime Security of 

SOLAS, 1974, as amended and the ISPS Code as herein further elaborated. 

2. By 01 July 2004, all ships covered by this Circular shall carry on board a Ship Security 

Plan (SSP) duly approved by the Administration or by recognized security organization 

(RSO) acting on its behalf. 

3. Ships shall by 01 July 2004 have on board an International Ship Security Certificate 

issued pursuant to paragraph XII.2 of this Circular. 

4. Companies shall be primarily responsible for the implementation of this Circular. 

5. The company shall ensure that the CSO, the master and the SSO are given the necessary 

support to fulfill their duties and responsibilities in accordance with Chapter XI-2 of SOLAS, 

1974, as amended, Part A of the ISPS Code and this Circular.


6. The master shall be given overriding authority and responsibility to make decisions with 

respect to the safety and security of the ship. This shall include denial of access to 

persons (except those identified as duly authorized by a Contracting Government) or their 

effect and refusal to load cargo, including containers or other closed cargo transport 

units. 

7. The company shall ensure that the master has available onboard, at all times, information 

through which officers duly authorized by a Contracting Government can establish: 

.1 who is responsible for appointing the members of the crew or other persons currently 

employed or engaged onboard the ship in any capacity on the business of that ship; 

.2 who is responsible for deciding the employment of the ship; and 

.3 who are the parties to the charter party(ies) if the ship is employed under a charter 

party(ies). 

8. If a conflict arises between any safety and security requirements during the operation of 

the ship, the master shall give effect to these requirements necessary to maintain the 

safety of the ship; provided that the master shall implement temporary security measures 

commensurate with the prevailing security level; provided further that the information of 

such facts are given to: 

.1 the Administration; and 

.2 the Contracting Government in whose port facility/territory the ship is operating or 

intends to enter. 

9. Every ship to which this Circular applies and intending to enter a port of a Contracting 

Government shall provide, upon request of the officers duly authorized by that Government, 

the following information: 

.1 that the ship possesses a valid ISSC and the name of the issuing authority; 

.2 the security level at which the ship is currently operating; 

.3 the security level at which the ship operated in any previous port where it has conducted 

a ship/port interface, at least for the last 10 port calls; 

.4 any special or additional security measures that were taken by the ship in any previous 

port where it has conducted a ship/port interface, at least for the last 10 port calls; 

.5 that the appropriate ship security procedures were maintained during any ship to ship 

activity, at least for the last 10 port calls; or 

other practical security related information (but not details of the ship security plan) taking 

into account the guidance given in Part B of the ISPS Code. 

V. SHIP SECURITY

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1. Ship shall in compliance with this Circular be able to provide security measures that 

correspond to the following security levels: 

.1 Security level 1 - the level for which minimum appropriate protective security measures 

shall be maintained at all times. 

.2 Security level 2 - the level for which appropriate additional protective security measures 

shall be maintained for a period of time as a result of heightened risk of a security 

incident. 

.3 Security level 3 - the level for which further specific security measures shall be maintained 

for a limited period of time when a security incident is probable or imminent, 

although it may not be possible to identify the specific target. 

2. At security level 1, the following activities shall as minimum, be carried out through appropriate 

measures, taking into account the guidance given in Part B of the ISPS Code, in 

order to identify and take preventive measures against security incidents: 

.1 ensuring the performance of all ship security duties; 

.2 controlling access to the ship; 

.3 controlling the embarkation of persons and their effects; 

.4 monitoring restricted areas to ensure that only authorized persons have access; 

.5 monitoring of deck areas and areas surrounding the ship; 

.6 supervising the handling of cargo and shipís stores; and 

.7 ensuring that security communication is readily available. 

3. At security level 2, the additional protective measures, specified in the SSP shall be 

implemented for each activity detailed in paragraph V.2, taking into account the guidance 

given in part B of the Code. 

4. At security level 3, further specific protective measures, specified in the ship security 

plan, shall be implemented for each activity detailed in paragraph V.2, taking into account 

the guidance given in part B of the ISPS Code. 

5. A ship should always operate at security level 1 unless instructed by the Administration or 

a Contracting Government to whose Port Facility it is to undertake a ship/port interface, to 

move to and operate at security level 2 or 3. In case there is a change to a higher security 

level, the ship shall respond without undue delay. 

6. Whenever security level 2 or 3 is set by the Administration, the ship shall acknowledge 

receipt of the instructions on change of the security level. 

7. A ship prior to entering a port, or while in the port within the territory of a Contracting 

Government that has set security level 2 or 3 shall acknowledge receipt of the instruction


and shall confirm to the port facility security officer the initiation of the implementation of 

the appropriate measures and procedures as detailed in the ship security plan. The ship 

shall likewise report any difficulties in implementation. 

8. If a ship is required by the Administration to set, or is already at a higher security level 

than that set for the port it intends to enter or in which it is already located, the ship shall 

advise, without delay, the competent authority of the Contracting Government within whose 

territory the port facility is located and the port facility security officer of the situation. 

VI. DECLARATION OF SECURITY 

1. The ship can in the following cases request for a Declaration of Security (DoS): 

.1 the ship is operating at a higher security level than the port facility or another ship it is 

interfacing with; 

.2 there is an existing agreement on Declaration of Security between the Government of 

the Philippines and the Government of the Country to whose port the ship is to enter; 

.3 there has been a security threat or a security incident involving the ship or the port 

facility as applicable; 

.4 the ship is at port which is not required to have and implement an approved port facility 

security plan; or 

.5 the ship is conducting ship to ship activities with another ship not required to have and 

implement an approved ship security plan. 

2. The Declaration of Security shall be completed by the master or the ship security officer. 

3. Where a ship is not in compliance with the requirements of either Chapter XI-2 of SOLAS, 

1974, as amended, Part A of the ISPS Code, or this Circular, or cannot comply with the 

security level set by the Administration or by another Contracting Government and applicable 

to that ship, then the ship shall notify the appropriate competent authority prior to 

conducting any ship/port interface or prior to entry into port, whichever occurs earlier. 

VII. SHIP SECURITY ASSESSMENT 

1. There shall be a Ship Security Assessment (SSA) carried out for each ship covered by 

this Circular. The Company may take guidance under Part B of the ISPS Code when 

conducting the SSA. 

2. The SSA shall be carried out by persons with appropriate skills to evaluate the security of 

a ship taking into account the Guidance given in Part B of the ISPS Code. 

3. The SSP shall be developed based on a ship security assessment (SSA) which shall 

include an on-scene security survey and at least the following elements: 

.1 identification of existing security measures, procedures and operations;



.2 identification and evaluation of key ship board operations that it is important to protect; 

.3 identification of possible threats to the key ship board operations and the likelihood of 

their occurrence, in order to establish and prioritize security measures; and 

.4 identification of weaknesses, including human factors in the infrastructure, policies 

and procedures. 

4. The SSA shall be documented, reviewed, accepted and retained by the Company. 

VIII. SHIP SECURITY PLAN 

1. Development of Ship Security Plan 

.1 The SSP shall be developed on the basis of a ship security assessment which shall 

form part of the submission to the Administration when approval of the SSP is being 

sought. 

.2 The SSP shall make provisions for the three security levels as provided under paragraph 

V.1 and must clearly stipulate the security measures that should be taken at each 

security level. 

.3 The SSP shall contain a clear statement emphasizing the masterís authority and responsibility 

in respect of the safety and security of the ship. 

.4 The SSP shall be written in the English language. 

.5 The SSP may be kept in an electronic format provided that it shall be protected by 

procedures aimed at preventing its unauthorized deletion, destruction or amendment. 

.6 The SSP shall be protected from unauthorized access or disclosure. 

.7 The SSP shall, address, at the minimum, the following: 

.1 measures designed to prevent weapons, dangerous substances and devices 

intended for use against persons, ships or ports and the carriage of which 

is not authorized from being taken on board the ship; 

.2 identification of the restricted areas and measures for the prevention of 

unauthorized access to them; 

.3 measures for the prevention of unauthorized access to the ship; 

.4 procedures for responding to security threats or breaches of security 

including provisions for maintaining critical operations of the ship or ship/port 

interface; 

.5 procedures for responding to any security instructions which the Administration 

or a Contracting Government may give at security level 3; 

.6 procedures for evacuation in case of security threats or breaches of 

security;


.7 duties of shipboard personnel assigned security responsibilities and of other 

shipboard personnel on security aspects; 

.8 procedures for auditing the security activities; 

.9 procedures for training, drills and exercises associated with the plan; 

.10 procedures for interfacing with port facility security activities; 

.11 procedures for the periodic review of the plan and for updating; 

.12 procedures for report security officer; 

.13 identification of the ship security officer; 

.14 identification of the company security officer including with 24-hour contact 

details; 

.15 procedures to ensure the inspection, testing, calibration, and maintenance 

of any security equipment provided on board, if any; 

.16 frequency for testing or calibration any security equipment provided on 

board, if any; 

.17 identification of the locations where the ship security alert system activation 

points are provided; and 

.18 procedures, instructions and guidance on the use of the ship security alert 

system, including the testing, activation, deactivation and resetting and to limit 

false alerts. 

.8 The information under paragraph VIII.1.7.17/.18 shall be kept in a document known 

only to the master, the SSO and senior officers of the ship. 

.9 The ship security plan shall not be subject to inspection by officers duly authorized by 

a Contracting Government to carry out control and compliance measures save in circumstances 

specified in paragraph VIII.10 hereof. 

.10 Should the control officers of a Contracting Government require a review of the SSP 

after determining that there are clear grounds to believe that the ship is not in compliance 

with the requirements of Chapter XI-2 of SOLAS, 1974 as amended or Part A of the ISPS 

Code or this Circular, such review shall be made only after consent is given by the 

Administration or the master; provided, that the provisions in the plan relating to paragraph 

VIII.1.7 subsections .2, .4, .5, .7, .15, .17 and .18 of this Circular cannot be subject to 

inspection unless otherwise consent by the Administration had been granted. 

.11 The SSP to be developed shall: 

.1 detail the organizational structure of security for the ship;

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.2 detail the shipís relationships with the Company, port facilities, other ships and 

relevant authorities with security responsibility; 

.3 detail the communication systems to allow effective continuous communication 

with the ship and between the ship and others, including port facilities; 

.4 detail the basic security measures for security level 1, both operational and 

physical, that will always be in place; 

.5 detail the additional security measures that will allow the ship to progress without 

delay to security level 2 and, when necessary, to security level 3; 

.6 provide for regular review, or audit, of the SSP and for its amendment in 

response to experience or changing circumstances; and 

.7 detail reporting procedures to the Administration and to the appropriate Port 

Facilitiesí contact points. 

.12 Subject to the provisions of paragraph VIII.3.1 of this Circular, a security organization 

recognized (RSO) by the Administration may prepare the ship security plan. 

.13 Personnel conducting internal audits of the security activities specified in the plan 

or evaluating its implementation shall be independent of the activities being audited unless 

this is impracticable due to the size and the nature of the company or the ship. 

2. Amendments to the Ship Security Plan 

.1 Any amendment to the SSP shall likewise be based on a ship security assessment 

which shall form part of the submission to the Administration or the RSO acting on behalf 

of the Administration. 

.2 Changes to an approved SSP or to any security equipment specified in the approved 

plan shall not be implemented unless the relevant amendments to the plan are approved by 

the Administration. For this purpose, the Administration shall issue advisories to which 

specific area(s) of the SSP this particular provision shall apply. 

.3 The changes/amendments shall be at least as effective as those measures prescribed 

in chapter XI-2 of SOLAS 1974 as amended, Part A of the ISPS Code and this Circular. 

.4 The approval granted by the Administration to any amendment/change to the SSP 

which shall be documented in a manner that clearly indicates such approval, shall be 

made available on board and shall form part of the International Ship Security Certificate; 

provided that if the amendment/change be of a temporary nature, the reinstatement of the 

originally approved measures or equipment, shall render the approval for the amendment 

ineffective. The approval for the amendment so invalidated need not be retained onboard. 

3. Review and Approval of the Ship Security Plan 

1. The SSP shall be subject to the review and approval by the Administration or any of the 

Security Organization so recognized by it; provided that if an RSO is to undertake the


review and approval of the SSP or its amendments, such RSO should not have been 

involved in either the preparation of the ship security assessment, or of the ship security 

plan or of the amendments under review. 

2. The Administration, shall to the extent possible, test the effectiveness of the SSP or of 

any amendment thereto which it had approved or had been approved on its behalf; 

provided that in the following cases, the Administration shall undertake such test: 

.1 the ship had been denied entry by a Contracting Government upon a finding 

that the SSP does not conform with the requirements of the SOLAS, 1974, as 

amended and the Code; 

.2 control officers of a Contracting Government had so reported to the Administration 

non conformity by the ship with the SSP. 

IX. COMPANY SECURITY OFFICER 

1. The company shall designate a company security officer (CSO) with the following duties 

and responsibilities: 

.1 advising the level of threats likely to be encountered by the ship, using appropriate 

security assessments and other relevant information; 

.2 ensuring that ship security assessments are carried out by persons with appropriate 

skills to evaluate the security of the ship; 

.3 ensuring the development, the submission for approval, and thereafter the implementation 

and maintenance of the ship security plan; 

.4 ensuring that the ship security plan is modified, as appropriate, to correct deficiencies 

and satisfy the security requirements of the ship; 

.5 arranging for internal audits and reviews of security activities; 

.6 arranging for the initial and subsequent verifications of the ship by the Administration 

or the RSO; 

.7 ensuring that deficiencies and non-conformities identified during internal audits, periodic 

reviews, security inspections and verifications of compliance are promptly addressed 

and dealt with; 

.8 enhancing security awareness and vigilance; 

.9 ensuring adequate training for personnel responsible for the security of the ship; 

.10 ensuring effective communication and cooperation between the SSO and the relevant 

port facility security officers;

1518 


.11 ensuring consistency between security requirements and safety requirements; 

.12 ensuring that, if sister-ship or fleet security plans are used,††the plan for each ship 

reflects the ship-specific information accurately; 

.13 ensuring that any alternative or equivalent arrangements approved for a particular 

ship or group of ships are implemented and maintained; and 

.14 ensuring the effective coordination and implementation of the SSP by participating 

in exercises at appropriate intervals. 

2. The CSO shall have knowledge and have received training, as may be appropriate, in the 

areas specified under paragraph X.2 of this Circular. 

3. The Company may designate more than one CSO depending on the number or types of 

ships it is operating, provided that there is a clear identification of the CSO who is responsible 

for which ships covered by this Circular. 

X. SHIP SECURITY OFFICER 

1. The company shall designate a ship security officer (SSO) on each ship covered by this 

Circular who shall undertake the following functions: 

.1 undertaking regular security inspections of the ship to ensure that appropriate security 

measures are maintained; 

.2 maintaining and supervising the implementation of the ship security plan, including any 

amendments to the plan; 

.3 coordinating the security aspects of the handling of cargo and shipís stores with other 

shipboard personnel and with the relevant port facility security officers; 

.4 proposing modifications to the ship security plan; 

.5 reporting to the Company Security Officer any deficiencies and non-conformities identified 

during internal audits, periodic reviews, security inspections and verifications of 

compliance and implementing any corrective actions; 

.6 enhancing security awareness and vigilance on board; 

.7 ensuring that adequate training has been provided to shipboard personnel, as appropriate; 

.8 reporting all security incidents; 

.9 coordinating implementation of the ship security plan with the company security officer 

and the relevant port facility security officer; and 

.10 ensuring that security equipment is properly operated, tested, calibrated and maintained, 

if any.


2. The ship security officer shall have knowledge and must have received training, in some 

or all of the following, as appropriate: 

.1 security administration; 

.2 relevant international conventions, codes and recommendations; 

.3 relevant Philippine legislation and regulations; 

.4 responsibilities and functions of other security organizations; 

.5 methodology of ship security assessment; 

.6 methods of ship security surveys and inspections; 

.7 ship and port operations and conditions; 

.8 ship and port facility security measures; 

.9 emergency preparedness and response and contingency planning; 

.10 instruction techniques for security related information and security related communications; 

.11 handling sensitive security training and education, including security measures and 

procedures; 

.12 knowledge of current security threats and patterns; 

.13 recognition and detection of weapons, dangerous substances and devices; 

.14 recognition, on a non-discriminatory basis, of characteristics and behavioral patterns 

of persons who are likely to threaten security; 

.15 techniques used to circumvent security measures; 

.16 security equipment and systems and their operational limitations; 

.17 methods of conducting audits, inspection, control and monitoring; 

.18 methods of physical searches and non-intrusive inspections; 

.19 security drills and exercises, including drills and exercises with port facilities; and 

.20 assessment of security drills and exercises. 

XI. RECORDS 

1. Records of the following activities addressed in the SSP shall be left on board for at least 

the last two (2) years;

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.1 training, drills and exercises; 

.2 changes in security level; 

.3 communications relating to the direct security of the ship such as specific threats to the 

ship or to port facilities the ship is, or has been, in; 

.4 internal audits and reviews of security activities; 

.5 periodic review of the ship security assessment; 

.6 periodic review of the ship security plan; 

.7 implementation of any amendments to the plan; and 

.8 maintenance, calibration and testing of any security equipment provided on board 

including testing of the ship security alert system. 

2. In addition to the information listed in paragraph IV.7, records of the following for the last 

10 port calls shall be kept on board. 

.1 security threats; 

.2 breaches of security; 

.3 declaration of security; 

.4 security level of the ship at each port call; and 

.5 information enumerated in paragraph IV.7 of this Circular. 

3. The records referred to in the preceding paragraph shall be in the English language. 

4. The records may be kept in an electronic format, provided that they are protected by 

procedures aimed at preventing their unauthorized deletion, destruction or amendment. 

5. The records shall be protected from unauthorized access or disclosure. 

XII. VERIFICATION AND CERTIFICATION OF SHIPS 

1. Verifications 

.1 Ships covered by this Circular shall be subject to the verification as specified hereunder: 

.1 an initial verification before the ship is put in service or before the ISSC 

required under paragraph XII.2.1 is issued for the first time, which shall include a 

complete verification of its security system and any associated security equipment 

covered by the relevant provisions of Chapter XI-2 of SOLAS, 1974 as 

amended, the ISPS Code and this Circular and the SSP. This verification shall 

ensure that the security system and any associated security equipment of the


ship fully complies with the applicable requirements of Chapter XI-2 of SOLAS, 

1974, as amended and the ISPS Code and this Circular, is in satisfactory condition 

and fit for the service for which the ship is intended; 

.2 a renewal verification which the Administration may specify but in no case 

exceeding five years, except where paragraph XII.3.1 or paragraph XII.3.6 is 

applicable. This verification shall ensure that the security system and any associated 

security equipment of the ship fully complies with the applicable requirements of 

Chapter XI-2 of the SOLAS, 1974, as amended and the ISPS Code and the 

approved ship security plan, is in satisfactory condition and fit for the service for 

which the ship is intended; 

.3 at least one intermediate verification which shall take place between the second 

and third anniversary date of the ISSC as defined in Regulation I/2(n) of SOLAS 

1974, as amended. The intermediate verification shall include inspection of the 

security system and any associated security equipment of the ship to ensure that 

it remains satisfactory for the service for which the ship is intended. Such 

intermediate verification shall be endorsed on the certificate; and 

.4 any additional verifications as may be determined/required by the Administration. 

.2 Verification of ships shall be carried out by officers of the Administration or a recognized 

security organization acting on behalf of the Administration. 

.3 The security system and any associated security equipment of the ship after verification 

shall be maintained to conform with the provisions of Regulations XI-2/4.2 and XI-2/6 

of SOLAS 1974, as amended, the ISPS Code, this Circular and the SSP. 

.4 After a verification has been undertaken, no changes shall be made in the security 

system and any associated security equipment or the approved ship security plan without 

the approval of the Administration. 

2. Issue or Endorsement of Certificate 

.1 The Administration shall issue or endorse an International Ship Security Certificate 

(ISSC) after the initial or renewal verification in accordance with the provisions of paragraph 

XII.1 of this Circular. 

.2 Where verification was undertaken by a recognized security organization, the Administration 

shall on the basis of the audit report by the RSO issue the ISSC. 

3. Duration and Validity of Certificate 

.1 The ISSC shall have a validity not exceeding five years upon its issuance. 

.2 When the renewal verification is completed within three months before the expiry date 

of the existing ISSC, the new certificate shall be valid from the date of completion of the 

renewal verification to a date not exceeding five years from the date of expiry of the 

existing ISSC.

1522 


.3 When the renewal verification is completed after the expiry date of the existing ISSC, 

the new certificate shall be valid from the date of completion of the renewal verification to 

a date not exceeding five years from the date of the expiry of the existing ISSC. 

.4 When the renewal verification is completed more than three months before the expiry 

date of the existing ISSC, the new certificate shall be valid from the date of completion of 

the renewal verification to a date not exceeding five years from the date of the completion 

of the renewal verification. 

.5 If the ISSC is issued for a period of less than five years, the Administration may extend 

the validity of the certificate beyond the expiry date to a maximum period of five years, 

provided that the verifications referred to in paragraph XII.1.1 of this Circular under this 

Circular and applicable when an ISSC is issued for a period of five years are carried out 

as appropriate. 

.6 If a renewal verification has been completed and a new certificate cannot be issued or 

placed on board the ship before the expiry date of the existing ISSC, the Administration or 

the recognized security organization acting on behalf of the Administration may endorse 

the existing ISSC and such a certificate shall be accepted as valid for a further period 

which shall not exceed five months from the expiry date. 

.7 If a ship, at the time when the ISSC expires, is not in port in which it is to be verified, the 

Administration may extend the period of validity of the certificate but this extension shall 

be granted only for the purpose of allowing the ship to complete its voyage to the port in 

which it is to be verified, and then only in cases where it appears proper and reasonable 

to do so. No ISSC shall be extended for a period longer than three months, and the ship 

to which an extension is granted shall not, on its arrival in the port in which it is to be 

verified, be entitled by virtue of such extension to leave that port without having a new 

ISSC. When the renewal verification is completed, the new Certificate shall be valid to a 

date not exceeding five years from the expiry date of the existing Certificate before the 

extension was granted. 

.8 An ISSC issued to a ship engaged on short voyages which has not been extended 

under the foregoing provisions of this section may be extended by the Administration for a 

period of grace up to one month from the date of expiry stated on it. When the renewal 

verification is completed, the new certificate shall be valid to a date not exceeding five 

years from the date of expiry of the existing ISSC before the extension was granted. 

.9 If an intermediate verification is completed before the period specified in paragraph 

XII.1.1, then: 

.1 the expiry date shown on the ISSC shall be amended by endorsement to a 

date which shall not be more than three years later than the date on which the 

intermediate verification was completed; 

.2 the expiry date may remain unchanged provided one or more additional verifications 

are carried out so that the maximum intervals between the verifications 

prescribed by paragraph XII.1.1 are not exceeded.


.10 An ISSC issued under paragraph XII.2 shall cease to be valid in any of the following 

cases: 

.1 if the relevant verifications are not completed within the periods specified under 

paragraph XII.1.1; 

.2 if the Certificate is not endorsed in accordance with paragraph XII.1.1.3 and 

paragraph XII.3.9.2 if applicable; 

.3 when a Company assumes the responsibility for the operation of a ship not 

previously operated by that Company; and 

.4 upon transfer of the ship to the flag of another State. 

† .11 In case a ship being operated by the company is to be transferred to another 

company, the company as herein covered by the Circular, shall, as soon as possible, 

transmit to the receiving company copies of any information related to the International 

Ship Security Certificate or to facilitate the verification described in paragraph XII.4.2. 

4. Interim Certification 

.1 After 01 July 2004, the Administration may cause an Interim International Ship Security 

Certificate (Interim-ISSC) to be issued on any of the following cases; 

.1 a ship without a certificate, on delivery or prior to its entry or re-entry into 

service; 

.2 transfer of a ship from the flag of a Contracting Government to the Philippine 

flag; 

.3 transfer of a ship to the Philippine flag from a State which is not a Contracting 

Government; 

.4 when a company assumes the responsibility for the operation of a ship not 

previously operated by that Company. 

.2 A interim ISSC shall only be issued after the Administration or the RSO, acting on 

behalf of the Administration, has verified that: 

.1 a ship security assessment required by the ISPS Code and this Circular has 

been completed; 

.2 a copy of the SP meeting the requirements of chapter XI-2 of SOLAS, 1974 

as amended, this Circular and Part A of the Code is provided on board and has 

been submitted for review and approval, and is being implemented on the ship; 

.3 the ship is provided with a ship security alert system meeting the requirements 

of Regulation XI-2/6 of SOLAS, 1974 as amended, if required; 

.4 the Company Security Officer:

1524 


.1 has ensured: 

.1 the review of the SSP for compliance with this regulation of 

the Circular; 

.2 that the SSP has been submitted for approval; 

.3 that the plan is being implemented on the ship; and 

.2 has established the necessary arrangements, including arrangements for 

drills, exercises and internal audits, through which the CSO is satisfied that the 

ship will successfully complete the required verification in accordance with paragraph 

XII.1.1.1 of this Circular within six (6) months; 

.5 arrangements have been made for carrying out the required verifications under 

paragraph XII.1.1.1 of this Circular; 

.6 the master, the SSO and other shipís personnel with specific security duties 

are familiar with their duties and responsibilities as specified in the ISPS Code 

and in this Circular and with the relevant provisions of the ship security plan 

placed on board; and have been provided such information in the English language; 

and 

.7 the SSO meets the requirements of this Circular. 

.3 An interim-ISSC may be issued by the Administration or by a recognized security 

organization, authorized to act on its behalf. 

.4 An interim-ISSC shall be valid for 6 months, or until the certificate required by paragraph 

XII.1.1.2 of this Circular is issued whichever comes first, and may not be extended. 

XIII. SANCTIONS AND PENALTIES 

1. A Company found to have violated any of the provisions of this Memorandum Circular 

shall be imposed the following fines: 

First Violation - P 50,000.00 

Second Violation - P100,000.00 

Third and succeeding violations - P200,000.00 

2. The Administration may, after proper determination of the gravity of non-compliance with 

this Circular, order a ship to cease operations until corrective action is instituted and 

clearance by the Administration thereto had been granted. 

XIV. REPEALING CLAUSE 

All memorandum circulars, rules and regulations and other issuances inconsistent with 

this Memorandum Circular are hereby amended, repealed or modified accordingly.


XV. EFFECTIVITY CLAUSE† 

The provisions of this Memorandum Circular shall take effect fifteen (15) days after 

publication once in a newspaper of general circulation unless otherwise herein specified. 





óo0oó 


Rules on the Provision/Installation of Ship Security Equipment 

Pursuant to the provisions of Presidential Decree No. 474 and Executive Order No. 

125, as amended, and in conformity with the International Convention for the Safety of Life 

at Sea (SOLAS), 1974, as amended, the following rules were approved by the Maritime 

Industry Board in its meeting on 11 August 2003. 

I. OBJECTIVES: 

1. To provide specific guidelines on the implementation of security measures in accordance 

with SOLAS, 1974, as amended, specifically: 

a. Regulation V/19 concerning Carriage Requirement for Shipborne Navigational Systems 

and Equipment for Automatic Identification System; 

b. Regulation XI-1/3 on Ship Identification Number; and, 

c. Regulation XI-2/6 on the provisions of Ship Security Alert System. 

2. To enhance maritime safety and security onboard Philippine-registered ships. 

II. COVERAGE: 

1. All Philippine-registered ships engaged in international voyages; and 

2. Philippine-registered ships primarily documented for domestic trade but temporarily allowed 

by the Administration to undertake international voyages. 

III. DEFINITIONS: 

1. Administration - refers to the Maritime Industry Authority (MARINA);

1526 


2. Company - refers to the owner of the ship or any other organization or person such as 

the manager, or the bareboat charterer, who has assumed the responsibility for operation 

of the ship from the shipowner and who on assuming such responsibility has agreed to 

take over all the duties and responsibilities imposed by the Code. 

3. Ship - refers to a Philippine-registered ship engaged in international voyages and covered 

by this Circular. 

IV. SPECIFIC PROVISIONS: 

A. Ship Security Alert System 

1. All ships covered by this Circular shall be provided with a ship security alert system in 

accordance with the following schedule: 

CONSTRUCTION DATE DATE OF IMPLEMENTATION 

1. ships constructed on or after 01 July 2004 Upon construction 

2. ships on international voyages constructed 

before 01 July 2004 

a. passenger ships/including high speed Not later than the First Survey of the radio 

craft irrespective of size installation after 1 July 2004 

b. oil tankers, chemical tankers, gas carriers, Not later than the First survey of the radio 

bulk carriers and cargo high speed crafts installation after 1 July 2004 

of 500 gt and upwards 

c. other cargo ships of 500 gt and upwards Not later than the First survey of the radio 

and mobile offshore drilling units installation after 1 July 2006 

2. The ship security alert system, when activated shall: 

.1 initiate and transmit a ship-to-shore security alert to a competent authority designated 

by the Administration and to the company operating the ship, identifying the ship, its 

location and indicating that the security of the ship is under threat or it has been 

compromised; 

.2 not send the ship security alert to any other ships; 

.3 not raise any alarm on-board the ship; and 

.4 continue the ship security alert until deactivated and/or reset. 

3. The ship security alert system shall: 

.1 be capable of being activated from the navigation bridge and in at least one other 

location; and 

.2 conform to performance standards not inferior to those adopted by the IMO.


4. The ship security alert system activation points shall be designed so as to prevent the 

inadvertent initiation of the ship security alert. 

5. The requirement for a ship security alert system may be complied with by using the 

radio installation fitted for compliance with the requirements of Chapter IV on Radio 

communications of SOLAS 1974 as amended, provided all requirements of this Circular 

are complied with. 

B. Automatic Identification System (AIS) 

1. All ships covered by this Circular shall be fitted with an automatic identification system 

(AIS) in accordance with the following schedule: 

___________________________________________________________________________________ 

Construction Date Type Size Date of Implementation 

___________________________________________________________________________________ 

Ships constructed Passenger ships Irrespective of size Upon construction 

on or after 01 July Cargo ships 300 gt and upwards 

2002 

Passenger ships Irrespective of size Not later than 01 July 2003 

Tankers 300 gt and upwards Not later than the first 

Survey for safety equipment 

on or after 01 July 2003 

50,000 gt and upwards Not later than 01 July 2004 

Ships constructed Other ships 

before 01 July 2002 300 gt upwards but Not later than the first 

less than 50,000 gt safety equipment Survey* 

after 01 July 2004 or by 31 

December 2004 which ever 

occurs earlier. 

* the first safety equipment survey means the first annual survey, the first periodical survey or the first renewal 

survey for safety equipment whichever is due first after 01 July 2004, and, in addition, in the case of ships under 

construction, the initial survey. 

2. The IAS shall: 

.1 provide automatically to appropriately equipped shore stations, other ships and aircraft 

information, including the shipís identity, type, position, course, speed, navigational status 

and other safety-related information; 

.2 receive automatically safety related information from similarly fitted ships; 

.3 monitor and track ships; and, 

.4 exchange data with shore-based facilities. 

3. Paragraph IV.2 of this Circular shall not apply to cases where international agreements 

rules or standards provide for the protection of navigational information.

1528 


4. A ship may be exempted by the Administration from the requirement of this Circular 

provided the ship will be taken permanently out of service within two (2) years after the 

implementation date. For this purpose, the company operating such ship shall submit an 

undertaking attesting to such fact. 

C. Ship Identification Number (SIN) 

1. Ships covered by this Circular shall have the shipís identification number permanently 

marked, according to the schedule herein stipulated: 

.1 in a visible place either on the stern of the ship or on either side of the hull, amidships 

port and starboard, above the deepest assigned load line or either side of the superstructure, 

port and starboard or on the front of the superstructure or in the case of passenger 

ships, on a horizontal surface visible from the air; and 

.2 in an easily accessible place either on one the end transverse bullheads of the machinery 

spaces, as defined in regulation II-2/3.30, or on one of the hatchways, or, in the 

case of tankers, in the pump-room or, in the case of shipís with ro-ro spaces, as defined 

in regulation II-2/3.41, on one of the end transverse bulkheads of the ro-ro spaces. 

SCHEDULE OF COMPLIANCE: 

CONSTRUCTION DATE DATE OF IMPLEMENTATION 

1. Ships constructed on or after 1 July 2004 Upon Construction 

l Passenger ships of 100 gt and upwards 

l Cargo ships of 300 gt and upwards 

2. Ships constructed before 1 July 2004 Not later than the first drydocking of the ship 

l Passenger ships of 100 gt and upwards after 01 July 2004 

l Cargo ships of 300 gt and upwards 

2. The permanent marking shall be plainly visible, clear of any other markings on the hull and 

shall be painted in a contrasting colour. 

3. The permanent marking referred to in C.1.1 shall not be less than 200 mm in height. The 

permanent marking referred to in paragraph C.1.2 shall not be less than 100 mm in 

height. The width of the marks shall be proportionate to the height. 

4. The permanent marking may be made by raised lettering or by cutting it in or by centre 

punching it or by any other equivalent method of marking the ship identification number 

which ensures that the marking is not easily expunged. 

5. For ships constructed of material other than steel or metal, the Administration shall approve 

the method of marking the ship identification number. 

V. SANCTIONS AND PENALTIES: 

1. The company shall be imposed the following fines or penalties, after due notice and 

hearing, for failure to comply with any of the provisions of this Memorandum Circular:


First Violation - P 50,000.00 

Second Violation - 100,000.00 

Third and succeeding violations - 200,000.00 

2. The Administration may, after proper determination of the gravity of non-compliance with 

this Circular, order a ship to cease operations until corrective action is instituted and 

clearance by the Administration thereto had been granted. 

VI. REPEALING CLAUSE: 

All memorandum circulars, rules and regulations and other issuances inconsistent with 

this Memorandum Circular are hereby amended, repealed or modified accordingly. 

VII. EFFECTIVITY CLAUSE 

The provisions of this Memorandum Circular shall take effect fifteen (15) days after 

publication once in a newspaper of general circulation unless otherwise herein specified. 




NATIONAL COMPUTER CENTER 


NCC Memorandum Circular No. 2003-01 

Guidelines on Compliance to the E-Commerce Act (R.A. 8792) 

and Stage Two and Three of the UN-ASPA Five Stages of E-Government 

RATIONALE 

On 11 July 2002, NCC issued Memorandum Circular No. 2002-01 prescribing the 

initial guidelines on the creation of government agency website, which would enable agencies 

to comply with Stage One of the UN-ASPA Five Stages of e-Government. In April 2002, there 

were 266 (66%) agencies with website monitored out of 399 national government agencies. 

After a year of extending technical assistance and creating web templates for NGAs and 

LGUs, NCC reports that there are now 373 (98.4%) agencies with websites while 6 (1.6%) 

remain without any web presence as of 30 June 2003. The data for LGUs are even more 

encouraging. From 51% of the total number of provinces and cities in 2002, all 79 provinces 

and 115 cities in the country are now with web presence. And from 3% of the total 

municipalities nationwide, a total of 966 out of 1,496 or 64.6%, are also online. The SUCs 

have 100% web presence as of 30 April 2003. The UN-ASPA Five Stages of e-Government 

is described in ìAnnex A*î. 



1530 


Thus, this NCC Memorandum Circular No. 2003-02 is being issued to guide government 

agencies to progress to Stage 2 and 3 of the UN-ASPA Five Stages of e-Government. 

Further, this Circular aims to guide government agencies to comply with the provisions 

of Section 27 (ìGovernment Use of Electronic Data Messages, Electronic Documents and 

Electronic Signaturesî) of the E-Commerce Act. 

Quoting some parts of the provision: ìxxx.... all departments, bureaus, offices and 

agencies of the government, as well as government-owned and -controlled corporations, 

that pursuant to law, require or accept the filing of documents, require that documents be 

created, or retained and/or submitted, issue permits, licenses or certificates of registration 

or approval, or provide for the method, licenses or certifcates of registration or approval, 

or provide for the method and manner of payment or settlement of fees and other obligations 

to the government, shall - (a) accept the creation, filing or retention of such documents in 

the form of electronic data messages or electronic documents; (b) issue permits, licenses, 

or approval in the form of electronic data messages or electronic documents; (c) require 

and/or accept payments, and issue receipts acknowledging such payments through systems 

using electronic data messages or electronic documents; or (d) transact the government 

business and/or perform governmental functions using electronic data messages or 

electronic documents....xxxî 

SECTION 1. Website Features for Stage One Compliance 

Section 1 of NCC Memorandum Circular No. 2002-01, issued last 11 July 2002, 

prescribed the Basic Content of the Official Agency Website for compliance to Stage One of 

the UN-ASPA Five Stages of e-Government. They are as follows: 

1. Philippine national flag graphics image 

2. Agency Name and Logo 

3. Mandate and Main Functions 

4. Organizational Aims and Objectives (Vision, Mission, Objectives) 

5. Write Up About the Agency (historical background) 

6. Organizational Structure and the Responsibilities of each unit 

7. List of Key Officials and their Responsibilities 

8. Plans/Programs/Projects 

9. Policy Pronouncements/Official Statements/Rules and Regulations Issued 

10. Products, Services, Reports, Publications and Statistical Information 

11. Agency Contact Details - postal and e-mail addresses, telephone and fax numbers 

12. A Link to Philippine Government Portal and Other Government Offices 

SECTION 2. Website Features for Stage Two Compliance 

In addition to the Basic Content of the Official Agency Website listed above, agencies 

are hereby advised to include the following features for their official agency website to 

progress to Stage Two of the UN-ASPA Five Stages of e-Government: 

1. Accessible information at the website, which will be regularly updated (at least once a 

month); 

2. Forms, Publications, Newsletters and other documents that can be made available for 

downloading (it may be in html, doc, zip, pdf, txt, rtf or other generally acceptable format) 

or may be ordered online;


3. Announcements of Procurement/Bid Activities, Bulletins of vacant positions; 

4. Links to all Regional/Field Offices with separately hosted websites; 

5. Search features and a Sitemap; 

6. Use of e-mail and feedback form for posting comments and other inquiries; and 

7. Privacy, Security and other intellectual property protection statements. 

SECTION 3. Website Features for Stage Three Compliance 

As of 30 June 2003, there are 99 (26.1%) out of 379 national government agencies 

that have met the requirements of Stage Two of the UN-ASPA Five Stages of e-Government. 

The following features are being prescribed for government agencies so that their official 

agency website will progress to Stage Three of the UN-ASPA Five Stages of e-Government: 

1. Users are able to log-in with password to official agency website; 

2. Application forms that are downloadable may also be submitted online together with other 

electronic supporting documents; 

3. Users can access specific database through a secure transaction; 

4. Website accessibility for people with disabilities by providing text-only website version, 

alternative to auditory and visual content; and 

5. Interactive communication through the use of online forum or discussion board. 

All agencies with websites that have achieved Stage Two compliance are advised to 

make their websites carry the prescribed features enumerated above. 

The legislative, judicial, constitutional offices and local government units are enjoined to 

consider the prescribed features in their respective websites. 

SECTION 4. Electronic Mail Addresses 

For efficient electronic communication, an official e-mail address should be utilized. 

No free e-mail address shall be considered as complying with this Circular. On the other 

hand, e-mail addresses that are packaged together with the agency internet subscription or 

website hosting are acceptable. Agencies are encouraged to support the following e-mail 

addresses, for which the associated function exists within their organizations: 

MAILBOX NAME AREA USAGE 

info General Information Package information about the 

organization, products and/or 

services, as appropriate 

marketing Marketing Product marketing and marketing 

communications 

sales Sales Product purchase information 

support Customer Service Problems with product and/or service 

webmaster Agency Website Send comments, report errors or 

other technical matters, dealing 

specifically with the website content

1532 


abuse Customer Relations Inappropriate public behavior 

security Network Security Security bulletins or queries 

The suggested format is: 

Example: 

mailbox_name@domain_name 

info@ncc.gov.ph 

webmaster@up.edu.ph 

Agencies are not precluded from using other official e-mail addresses that correspond 

to their specific functions. 

SECTION 5. NCC Assistance 

NCC shall provide the following assistance to government agencies: 

(a) Use of an enhanced website template for UN-ASPA Stage 2 and 3 compliance, 

(b) Use of a modified Content Management Software (CMS) for upgrading the website, 

(c) Free workshop on the use of CMS and website template, 

(d) Distribution of source code for CMS, and 

(e) Conversion of database from the Stage 1 CMS to Stage 2 CMS. 

All designated webmasters are required to attend the free workshop that NCC will 

conduct. 

SECTION 6. Submission of Compliance Report 

The designated webmaster, as provided for in Section 3 of NCC MemorandumCircular 

No. 2002-01, shall submit a compliance report to NCC, noted by the Head of Agency, within 

six (6) months after the issuance of this Circular. Annex B* shows the general format of the 

compliance report. All compliance reports shall be submitted in electronic format to 

policy@ncc.gov.ph. 

SECTION 7. Advancement to Higher Stages of E-Government 

Agencies with financial and technical capabilities to proceed to higher stages of the UN- 

ASPA Stages of e-Government are encouraged to advance ahead of the rest. 

SECTION 8. Financial Requirement 

For sustainability, agencies are hereby advised to include in their agency budget for 

Fiscal Year 2004 onwards, enough funds to maintain their website and internet subscription. 




SECTION 9. Effectivity 

This NCC Memorandum Circular No. 2003-01 shall take effect in the 31st day of July 




(SGD.) DR. IBARRA M. GONZALEZ 


--o0o-- 

NCC Memorandum Circular No. 2003-02 

Prescribing a Standard Template for the 

Information Systems Strategic Plan (ISSP) 

SECTION 1. Statement of Policy 

Executive Order (E.O.) No. 265 was issued July 12, 2000 approving and adopting the 

Government Information Systems Plan (GISP) as a framework and guide for all computerization 

efforts in government. 

Section 2 of E.O. No. 265 states that ìall government agencies and instrumentalities 

including local government units shall align their respective computerization projects with the 

priorities identified in the GISPî. 

Chapter 4 of the GISP provides that ìThe National Computer Center (NCC), being the 

technical arm of the ITECC in the overall management and coordination of the GISP in 

coordination with agencies concerned and with the assistance from the private sector, review 

and recommend measures to update or improve operational policies, programs and guidelines 

on the preparation of agency information systems strategic plans (ISSPs), which shall serve 

as building blocks to the GISP.î 

In light of the above, the NCC prescribes the ISSP Template Revised 2003 as the 

standard format in the preparation of government ISSPs. Attachment 1 presents the ISSP 

Template Revised 2003. 

SECTION 2. Considerations for Revising the ISSP Format 

2.1 The NCC Memorandum Circular No. 99-01 ìPrescribing the Guidelines for Information 

Systems Planning in Governmentî was issued on November 29, 1999 to implement the 

mandatory requirement for all departments, attached agencies, GOCCs, GFIs and SUCs 

to submit a 5-year ISSP to NCC for approval following a prescribed format or template 

specified as Annex A*. There is a need to update the ISSP format prescribed as Annex A 



1534 


of the NCC MC No. 99-01 and come up with a standard ISSP template to facilitate the 

formulation of agency-wide ISSPs. 

2.2 Considering the rapid change in technology and the re-engineering program of the 

government bureaucracy, there is a need to shorten the IS planning phase from 5-year 

planning to minimum of 3-year planning. 

2.3 There is a need to include in the ISSP template pressing concerns related to the thrusts 

of e-Government, GISP, IT21, ITECC Strategic Roadmap, e -Commerce, RPWEB and 

internet connection, networking, databases and data archiving, IPR, security and other 

issues. 

2.4 Results of pilot testing and public consultation with the IS Planners in government and 

private sector in the ISSP template were considered in the improvement of the template. 

SECTION 3. Coverage 

The following should submit their ISSP to NCC using the standard ISSP Template 

Revised 2003 as shown in Attachment 1 of this Circular. 

3.1 Agencies who do not have yet an ISSP as of October 2003. 

3.2 Agencies who are currently drafting their ISSPs as of October 2003. 

3.3 Agencies whose ISSPs are valid up to December 2002 only. 

3.4 Agencies who have undergone re-engineering process (e.g. those who have been 

trasferred administratively to another department). 

3.5 Agencies who need to submit updates to their original ISSP as endorsed/approved by 

NCC. 

3.6 Agencies who are into procurement of ICT resources regardless of source of funds 

and do not have approved ISSPs. 

3.7 Agencies who opt to avail of the Build Operate Transfer (BOT) scheme (in any of its 

variances) in their ICT resource procurement for projects which are not covered in their 

ISSPs. 

Agencies whose ISSPs have been reviewed, endorsed or approved by the NCC as of 

September 2003 are not required to reformat their ISSPs. 

Another template has been designed by NCC to suit the ICT needs of the Local 

Government Units (LGUs). LGUs who opt to make their ISSPs are therefore encouraged to 

use the recommended format specifically designed for LGUs only. 

SECTION 4. Responsibility of the Designated Information System (IS) Planner 

and the NCC 

4.1 Agency Heads shall designate one IS Planner who is at least a third ranking executive 

in the Agency (pursuant to EO 190 s. 1994). Division Chiefs or the Head, MIS could be 

designated as IS Planners. NCC shall maintain a database of IS Planners with their 

names, plantilla position and e-mail addresses for coordination. 

4.2 The IS Planner shall be responsible for the submission of their agency ISSP to NCC 

using the standard ISSP Template Revised 2003 (Attachment 1* of this NCC MC). NCC


shall publish in its website, a registry of Agencies with approved ISSPs. The same Registry 

shall be forwarded to the Department of Budget and Management monthly for information/reference. 

4.3 The IS Planner shall act as the executive sponsor of their agency ISSP. He shall make 

sure that all ICT resource procurement required under their ISSP shall be included in the 

agencyís approved Annual Procurement Plan (APP). Article II Section 7 of the ìGovernment 

Procurement Reform Actî (RA 9184) states that ìNo government procurement shall 

be undertaken unless it is in accordance with the approved Annual Procurement Plan of 

the Procuring Entityî. A copy of the approved APP which shall reflect the NCC approved 

ICT resources shall be submitted to NCC instead of an Information Systems Development 

Plan (ISDP) as required under Section 6 of NCC MC No. 99-01. Agencies which do not 

have an approved ISSP are required to submit a copy of their approved APP to NCC in 

securing a clearance to procure any ICT Resource. 

4.4 The IS Planner shall submit to NCC a status report on the implementation of their ISSP 

every semester. The IS Planner must inform the NCC at the end of every semester of all 

ISSP-related accomplishments. NCC shall publish in its website information on the Status 

of ISSPs including government ICT projects. As prescribed under chapter 4 of the GISP, 

the NCC shall monitor ISSP implementation and shall submit, through the ITECC, a report 

to the President and Congress on the performance of the agencies. 

4.5 All designated IS Planners shall be under the direct supervision of the Agency Head. 

The agency head should create a special group/team to support the IS Planner or hire an 

ICT Consultant to assist them in their IS planning activities. 

SECTION 5. Repealing Clause 

This Memorandum Circular amends the ISP format prescribed in NCC Memorandum 

Circular No. 99-01. All other circulars and provisions thereof which are inconsistent with this 

NCC MC are hereby repealed or amended accordingly. 

SECTION 6. Effectivity 

This NCC Memorandum Circular No. 2003-02 shall take effect on the 31st day of July 


Adopted: 31July 2003 

(SGD.) DR. IBARRA M. GONZALEZ 


NATIONAL FOOD AUTHORITY 


SOP No. SS-LG07 

Revised Rules on Administrative Disciplinary Proceedings

1536 




Date Approved: 11 Sept. 2003 

NATIONAL IRRIGATION ADMINISTRATION 



LRA Circular No. 03-2003 

Quoted hereunder in full for the information and guidance of all concerned is LRA 

Circular No. 03, s. 2003 dated February 7, 2003, to wit: 

ìREPUBLIKA NG PILIPINAS 

KAGAWARAN NG KATARUNGAN 

PANGASIWAAN SA PATALAAN NG LUPAIN 

(LAND REGISTRATION AUTHORITY) 

LRA Circular No. 03-2003 

February 7, 2003 

Additional Requirement: Re Registration of Transactions Involving the 

Sale or Transfer of Ownership of Agricultural Lands 

As a gesture of cooperation with the National Irrigation Administration (NIA), in its 

relentless efforts to effectively implement its nationwide program of intensifying irrigation fee 

collection, this Authority deems it necessary to provide further assistance by supplementing 

the provisions of NALTDRA (LRC) Circular No. 93 dated December 2, 1986, so as to include 

the following, to wit: 

ìIn all transactions involving sale or any other mode of 

transfer of ownership of agricultural lands, the registrant shall not be required to submit, 

as an additional requirement, a certification from the National Irrigation Administration 

(NIA) that irrigation fees due thereon had already been duly paid. Failure of the 

registrant to submit the certification shall cause to defer the transfer of ownership until 

such time that said Certification shall have been submitted.î 

All other provisions of the aforementioned circular not inconsistent herewith shall remain 

effective and all Registrars of Deeds are hereby directed to strictly implement the 

same. 

This Circular shall take effect immediately upon its approval. 

Strict compliance is hereby enjoined. 

(SGD.) BENEDICTO B. ULEP 

Administator


You are all enjoined to fully take advantage of this opportunity to enhance our ISF back 

accounts collection and extend full cooperation with the respective Regional Offices of LRA/ 

Register of Deeds in the dissemination of aforecited LRA Circular. 

The Provincial Irrigation Engineers are likewise urged to avail of this circular in attending 

to back account collection related to pump equity and amortization from construction, repair 

and rehabilitation of Communal Irrigation System (CIS). 

Be guided accordingly. 



(SGD.) JESUS EMMANUEL M. PARAS 


--o0o-- 


Implementing Guidelines (IG) for the Compromise Agreement 

Program (CAP) in Settling Irrigation Service Fee - Back Account (ISF-BA) 

of Farmer Beneficiaries of National Irrigation Systems (NISs) 




NATIONAL MEAT INSPECTION COMMISSION 



Memorandum Circular No. 6-2003-02 

Collection of Fees on Imported Meat and Meat Products 



--o0o--

1538 






Memorandum Order No. 21, s. 2003* 

Guidelines in the Collection of Fees on Imported 

Meat and Meat Products 



--o0o-- 

Memorandum Order No. 20, s. 2003* 

Implementation of AO 6, Series of 2000 



NATIONAL TELECOMMUNICATIONS COMMISSION 


Memorandum Circular No. 08-08-2003 

Amending Section II- 2.2.1, of Memorandum Circular No. 02-03-87, 

Implementation of the Revised Amateur Radio Regulations 

Pursuant to the provisions of Ministry Circular No. 87-194, and in order to promote and 

enhance the amateur radio service in the Philippines and to rationalize the designation of call 

signs, facilitate identification of a class of operators authorized in the particular band, Section 

II-2.2.1 of the above-mentioned Circular which provides that: 

Formation of Call Signs: 

1. Prefix DU for classes A, B and C 

2. Prefix DY for class D 

*Also filed by Department of Agriculture on July 8, 2003.


3. Prefix DX or DZ for club station or station installed to be operated for a field trip or a 

special event. 

4. Class A have one option to change to prefix of his call sign to 4D to 4F. 

are hereby amended to the following formation of Call Signs: 

1. Prefix DU, 4F - CLASS ìAî 

2. Prefix DV - CLASS ìBî 

3. Prefix DW - CLASS ìCî 

4. Prefix DY - CLASS ìDî, no code test 

5. Prefix DX or DZ - CLUB Stations, REPEATER Stations, Special Event Stations and 

Dxpeditions. 

The transition of prefix structuring shall be made upon renewal and or modification of 

the station license. 


or in a newspaper of general circulation and the filing of three (3) certified copies hereof with 

the University of the Philippines Law Center. 


(SGD.) ARMI JANE R. BORJE 

Commissioner 

(SGD.) JORGE R. SARMIENTO 

Deputy Commissioner 

(SGD.) KATHLEEN G. HECETA 

Deputy Commissioner 

NATIONAL WAGES AND PRODUCTIVITY COMMISSION 


NWPC Guidelines No. 001-95 

Revised Rules of Procedure in Minimum Wage Fixing 

Pursuant to Article 121(c) of the Labor Code as amended by Section 3 of R.A. 6727, 

the National Wages and Productivity Commission hereby adopts and promulgates the following 

revised rules of procedure governing the proceedings in the Commission and the Regional 

Tripartite Wages and Productivity Boards in the fixing of minimum wage rates by 

region, province, or industry. 

RULE I 

GENERAL PROVISIONS

1540 


Section 1. Title. This Rules shall be known as the Revised Rules of Procedure on 

Minimum Wage Fixing. 

Section 2. Construction. This Rules shall be liberally construed to carry out the 

objectives of R.A. 6727. 

Section 3. Scope. This Rules shall govern proceedings in the National Wages and 

Productivity Commission and the Regional Tripartite Wages and Productivity Boards in the 

fixing of minimum wage rates. 

Section 4. Definition of Terms. As used in this Rules: 

a) ìActî means Republic Act No. 6727; 

b) ìBoardî means the Regional Tripartite Wages and Productivity Board; 

c) ìCommissionî means the National Wages and Productivity Commission; 

d) ìChairmanî means Chairman of the Commission; 

e) ìMemberî refers to the members of the Commission or Board, including its Chairman; 

f) ìRegional Chairmanî means the Chairman of the Board; 

g) ìPartyî means any legitimate organization of workers or employees with substantial 

interest in the region, province or industry therein as determined by the Board, and who 

stands to be directly affected by the Commission/Board proceedings, order, decision or 

resolutions; 

h) ìIndustryî refers to a trade, business or a sector thereof, or group of businesses in 

similar or allied activities in which individuals are gainfully employed; 

i) ìLocalityî refers to a geographical area smaller than a province and includes industrial 

estates/export processing zones; 

j) ìRegionî refers to a geographical area composed of a group of provinces and/or cities 

as defined under Presidential Decree No. 1, as amended, including those that may be 

subsequently established by law; 

k) ìRegional Minimum Wage Ratesî refer to the lowest basic wage rates that an employer 

can pay his workers, as fixed by the Board which shall not be lower than the applicable 

statutory minimum wage rates; 

l) ìStatutory Minimum Wagesî refer to the lowest basic wages as provided by law; 

m) ìWage Distortionî shall mean a situation where an increase in prescribed wage rates 

results in the elimination or severe contraction of intentional quantitative differences in 

wage or salary rates between and among employee groups in an establishment as to 

effectively obliterate the distinctions embodied in such wage structure based on skills, 

length of service, or other logical bases of differentiation; 

n) ìWage Orderî refers to the Order promulgated by the Board pursuant to its wage fixing 

authority. 

RULE II 

MINIMUM WAGE FIXING 

Section 1. Conduct of Wage and Productivity Studies. The Board shall, subject to 

guidelines issued by the Commission, conduct continuing studies of wage rates, productivity 

and other conditions in the region, provinces or industries therein. The Board shall investigate 

and study all pertinent facts, and based on standards and criteria prescribed under Section 

2 of this Rule, shall determine whether a wage order should be issued.


Section 2. Standards/Criteria for Minimum Wage Fixing. The minimum wage rates 

to be established by the Board shall be as nearly adequate as is economically feasible to 

maintain the minimum standards of living necessary for the health, efficiency and general 

well-being of the workers within the framework of national economic and social development 

goals. In the determination of regional minimum wages, the Board shall, among other relevant 

factors, consider the following: 

a) Needs for workers and their families 

1) Demand for living wages 

2) Wage adjustment vis-‡-vis the consumer price index 

3) Cost of living and changes therein 

4) Needs of workers and their families 

5) Improvements in standards of living 

b) Capacity to Pay 

1) Fair return on capital invested and capacity to pay of employers 

2) Productivity 

c) Comparable wages and incomes 

1) Prevailing wage levels 

d) Requirements of economic and social development 

1) Need to induce industries to invest in the countryside 

2) Effects on employment generation and family income 

3) Equitable distribution of income and wealth along the imperatives of economic and 

social development 

Section 3. Procedures in Minimum Wage Fixing. 

a) Motu Proprio by the Board. Whenever conditions in the region, province or industry 

so warrant, the Board may, motu proprio or as directed by the Commission, initiate action 

or inquiry to determine whether a wage order should be issued. The Board shall conduct 

public hearings in the manner prescribed under this Rule and Rule III. The Board may also 

conduct consultations with concerned sectors/industries. 

b) By Virtue of a Petition Filed 

1) Form and Content of Petition. Any party may file a verified petition for wage increase 

with the appropriate Board in ten (10) typewritten legible copies which shall contain the 

following: 

(a) name/s, and address/es of petitioner/s and signature/s of authorized official/s; 

(b) grounds relied upon to justify the increase being sought; 

(c) amount of increase being sought; 

(d) area and/or industry covered.

1542 


2) Board Action. If the petition conforms with the requirements prescribed in the preceding 

sub-section b.1., the Board shall conduct public hearings in the manner prescribed 

under this Rule and Rule III, to determine whether a wage order should be issued. The 

Board may also conduct consultations with concerned sectors/industries. 

3) Publication of Notice of Petition/Public Hearing. A notice of the petition and/or public 

hearing shall be published in a newspaper of general circulation in the region and/or 

posted in public places as determined by the Board. The notice shall include the name/s 

and address/es of the petitioner/s, the subject of the petition and the date/s, place/s and 

time of the hearings. The publication or posting shall be made at least fifteen (15) days 

before the date of initial hearing and shall be in accordance with the suggested form 

attached as Annex ìAî*. 

4) Opposition. Any party may file his opposition to the petition on or before the initial 

hearing, copy furnished the petitioner/s. The opposition shall be filed with the appropriate 

Board in ten (10) typewritten legible copies which shall contain the following: 

(a) name/s and address/es of the oppositor/s and signature/s of authorized official/s; 

(b) reasons or grounds for the opposition; and 

(c) relief sought. 

5) Consolidation of Petitions. If there is more than one petition filed, the Board may, motu 

proprio or on motion of any party, consolidate these for purposes of conducting joint 

hearings or proceedings to expedite resolutions of petitions. Petitions received after publication 

of an earlier petition need not go through the publication/posting requirement. 

6) Assistance of Other Government and Private Organizations. The Board may enlist the 

assistance and cooperation of any government agency or private person or organization 

to furnish information in aid of its wage fixing function. 

RULE III 

CONDUCT OF HEARINGS 

Section 1. Public Hearings. Prior to the issuance of a wage order, public hearings 

shall be conducted giving notices to employeesí and employersí groups, provincial, city and 

municipal officials and other interested parties. 

Section 2. Who May Conduct. Hearings may be conducted by the Board en banc or 

by a duly authorized committee thereof wherein each sector shall be represented. The 

presence of the Regional Chairman or any of the Vice-Chairmen shall be required. If unable 

to attend, Board Members may send observers. The Board shall determine the date/s, 

place/s, and time of the hearings which shall be open to the public except as otherwise 

requested by a party and so determined by the Board. 

Section 3. Order of Hearing. As much as practicable, the petitioner/s shall present 

his/their evidence first, followed by the oppositor/s. The Board may then call on other persons 

to present their views and submit position papers and other supporting documents. 

Section 4. Manner and Duration of Hearings. Public hearings shall be conducted in 

a manner that shall ensure that all sectors and parties who stand to be directly affected by


the decisions and orders of the Board are given the widest opportunity to be heard. Pursuant 

to this, the hearings shall be conducted in each province in the region as far as practicable. 

Hearings shall be conducted within forty-five (45) days from the date of initial hearing 

except when conditions in the region warrant otherwise. 

Section 5. Records of Proceedings. The Board Secretariat shall keep records/minutes 

of all Board proceedings, duly noted by the Members of the Board. 

Section 6. Non-applicability of Technical Rules. The Board shall not be bound strictly 

by technical rules of evidence and procedures. 

Section 7. Prohibition Against Injunction. No preliminary or permanent injunction or 

temporary restraining order may be issued by any court, tribunal or any other entity against 

any proceeding before the Commission or Board. 

RULE IV 

WAGE ORDER 

Section 1. Issuance of Wage Order. Within thirty (30) days after conclusion of the 

last hearing, the Board shall decide on the merits of the petition, and where appropriate, 

issue a wage order establishing the regional minimum wage rates to be paid by employers 

which shall in no case be lower than the applicable statutory minimum wage rates. The Wage 

Order may include wages by industry, province or locality as may be deemed necessary by 

the Board provided, however, that such wage rates shall not be lower than the regional 

minimum wage rates unless expressly specified in the Wage Order. 

The Board shall furnish the Commission a copy of the decision on the petition or the 

Wage Order. 

Section 2. Contents of Wage Order. A Wage Order shall specify the region, province, 

or industry to which the minimum wage rates prescribed under the Order shall apply and 

provide exemptions, if any, subject to guidelines issued by the Commission. 

Section 3. Frequency of Wage Order. Any Wage Order issued by the Board may not 

be disturbed for a period of twelve (12) months from its effectivity, and no petition for wage 

increase shall be entertained within the said period. In the event, however, that supervening 

conditions, such as extraordinary increase in prices of petroleum products and basic goods/ 

services, demand a review of the minimum wage rates as determined by the Board and 

confirmed by the Commission, the Board shall proceed to exercise its wage fixing function 

even before the expiration of the said period. 

Section 4. Effectivity. A Wage Order shall take effect fifteen (15) days after its 

publication in at least one (1) newspaper of general circulation in the region. 

Section 5. Implementing Rules/Regulations. The Board shall prepare, for approval 

of the Secretary of Labor and Employment upon recommendation of the Commission, the 

necessary Implementing Rules and Regulations not later than ten (10) days from the issuance 

of a Wage Order.

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The Secretary of Labor and Employment shall act on the Implementing Rules within a 

period of twenty (20) days from receipt of the said Implementing Rules by the Commission. 

Once approved, the Board shall cause the publication of the Implementing Rules and Regulations 

in at least one (1) newspaper of general circulation in the region. 

Section 6. Review of Wage Order. The Commission may review the Wage Order 

issued by the Board motu proprio or upon appeal. 

Section 7. Correction of Error. The Board may, motu proprio or upon manifestation 

of any party, proceed to correct any patent error, errors in computation or typographical 

errors in any Wage Order. 

Section 8. Amendments to Wage Order. In case of substantive changes in the Wage 

Order, the Board must comply with the required procedures provided under Section 1 of 

Rule II and Section 4 of Rule IV. 

RULE V 

APPEAL 

Section 1. Appeal to the Commission. Any party aggrieved by a Wage Order issued 

by the Board may appeal such Order to the Commission by filing a verified appeal with the 

Board in three (3) typewritten legible copies, not later than ten (10) days from the date of 

publication of the Order. The appeal shall be accompanied by a memorandum of appeal 

which shall state the grounds relied upon and the arguments in support of the appeal. 

The Board shall serve notice of the appeal to concerned parties. 

Failure to file an appeal within the reglementary period fixed under this section or to 

submit the required documents shall be a ground for dismissal of the appeal. 

Section 2. Grounds for Appeal. An appeal may be filed on the following grounds: 

(a)non-conformity with prescribed guidelines and/or procedures; 

(b)questions of law; 

(c)grave abuse of discretion. 

Section 3. Transmittal of Records. Immediately upon receipt of the appeal, the Board 

Secretariat shall transmit to the Commission Secretariat the appeal and a copy of the subject 

Wage Order together with the complete records of the case and all relevant documents. 

Section 4. Period to Act on Appeal. The Commission shall decide on the appeal 

within sixty (60) days from the filing of said appeal. 

Section 5. Effect of Appeal. The filing of the appeal does not operate to stay the Order 

unless the party appealing such Order shall file with the Commission an undertaking with a 

surety or sureties satisfactory to the Commission for payment to employees affected by the 

Order of the corresponding increase, in the event such Order is affirmed. 

RULE VI 

QUORUM


Section 1. Quorum. Four (4) members of the Commission or Board shall constitute a 

quorum to transact business, provided that the Chairman or the Vice-Chairman is present 

and each sector is represented. The Commission or Board may dispense with the proviso 

requiring sectoral representation if the two (2) representatives of any sector fail to attend, 

without justifiable reason, two (2) consecutive scheduled meetings with proper notice. 

Section 2. Votes Required. Any decision of the Commission or Board shall require 

the affirmative of not less than four (4) of its members. 

RULE VII 

WAGE DISTORTION 

Section 1. Correction of Wage Distortion. Where the application of any prescribed 

wage increase by virtue of a Wage Order issued by the Board results in distortions of the 

wage structure within an establishment, the employer and the union shall negotiate to correct 

the distortions. Any dispute arising from wage distortions shall be resolved through the grievance 

procedure under their collective bargaining agreement and, if it remains unresolved, through 

voluntary arbitration. Unless otherwise agreed by the parties in writing, such dispute shall be 

decided by the voluntary arbitrator or panel of voluntary arbitrators within ten (10) days from 

the time said dispute was referred to voluntary arbitration. 

In cases where there are no collective agreements or recognized labor unions, the 

employers and workers shall endeavor to correct such distortions. Any dispute arising 

therefrom shall be settled through the National Conciliation and Mediation Board and, if it 

remains unresolved after ten (10) days of conciliation, shall be referred to the appropriate 

branch of the National Labor Relations Commission (NLRC). It shall be mandatory for the 

NLRC to conduct continuous hearings and decide the dispute within twenty (20) days from 

the time said dispute is submitted for compulsory arbitration. 

The pendency of a dispute arising from a wage distortion shall not in any way delay the 

applicability of any increase in prescribed wage rates pursuant to the provisions of the Wage 

Order. 

RULE VIII 

EXEMPTIONS 

Section 1. Application for Exemption. Whenever a wage order provides for exemption, 

applications for exemption shall be filed with the appropriate Board which shall process these 

applications, subject to guidelines issued by the Commission. 

RULE IX 

ENFORCEMENT 

Section 1. Enforcement of Wage Orders. Compliance with the Wage Order issued 

by the Board shall be enforced by the appropriate Regional Office of the Department of 

Labor and Employment in accordance with enforcement procedures under Articles 128 and 

129 of the Labor Code as amended. 

RULE X 

DISPOSITION OF PENDING MATTERS

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Section 1. Disposition of Pending Matters. The Commission/Board shall exert all 

efforts to dispose of all matters pending before it within the shortest possible time. 

RULE XI 

OFFICIAL RECORDS 

Section 1. Commission/Board Records. All official records of the Commission/Board 

may be made available to interested parties, upon request, except those considered confidential 

and which cannot be divulged without violating a private right or prejudicing the public interest. 

Section 2. Custody of Records and Other Documents. The Executive Director of 

the Commission Secretariat and the Head of the Board Secretariat shall be responsible for 

the safekeeping of all official records of the Commission and Board, respectively. 

RULE XII 

REPEAL AND SEPARABILITY 

Section 1. Repeal and Separability. All existing rules, regulations or orders or any 

part thereof inconsistent with this Revised Rules are hereby repealed, amended or modified 

accordingly. If any part or provision of this Revised Rules is declared unconstitutional or 

illegal, the other parts or provisions shall remain valid. 

RULE XIII 

EFFECTIVITY 

Section 1. Effectivity. This Revised Rules shall take effect fifteen (15) days after its 

publication in one (1) newspaper of general circulation. 


(SGD) JOSE S. BRILLANTES 

Chairman and Acting Secretary of Labor and Employment 

(SGD) CIELITO F. HABITO (SGD) CEDRIC R. BAGTAS 

Vice-Chairman and NEDA Director-General Member, Labor Sector 

(SGD) FRANCISCO R. FLORO (SGD) VICENTE S. BATE 

Member, Employer Sector Member, Labor Sector 

(SGD) EDUARDO T. RONDAIN (SGD) CARMELITA M. PINEDA 

Member, Employer Sector Member and NWPC Executive 

Director 


óo0oó 

Resolution No. 01, s. 1999 

Filing of Application for Exemption from 

Compliance of the Wage Order


WHEREAS, it has been noted that some applications for exemption from compliance 

with Wage Order filed by distressed and other applicant establishments have been denied/ 

dismissed by the Regional Tripartite Wages and Productivity Board (Regional Board) due to 

late filing and/or non-submission of required documents, such as audited financial statements; 

WHEREAS, among the factors that caused the delay in the filing of application and/or 

non-submission of required documents within the prescribed period of time, are lack of 

information on the deadline for filing/submission of documents, non-availability of required 

audited financial statements, location in rural areas and/or inaccessibility to information due 

to distance from urban centers and other grounds which may be beyond the control of the 

applicant; 

WHEREAS, the Commission recognizes the difficulty experienced by applicant 

establishments in filing application for exemption and/or submitting the required supporting 

documents within the reglementary period fixed under the NWPC Guidelines No. 01, Series 

of 1996; 

WHEREAS, during the Commission meeting held on 8 September 1999, it was proposed 

and agreed upon that in order to address the concern of applicants for exemption, the period 

within which an application may be filed and the required supporting documents may be 

submitted, be extended; 

RESOLVED, THEREFORE, as it is hereby resolved, that an application for exemption 

may be filed with the appropriate Regional Board not later than seventy-five (75) days from 

the date of publication of the approved Rules Implementing the Wage Order; provided that 

the complete required documents in support of the application must be filed within the said 

75-day period of filing and that no further extension for filing and submission of the required 

documents shall be allowed. 

This Resolution amends Section 9.A.2 and A.3 of NWPC Guidelines No. 01, Series of 

1996. 

This Resolution shall take effect fifteen (15) days after publication in a newspaper of 


Adopted: 8 Sept. 1999 


óo0oó 

NWPC Guidelines No. 01, Series of 1996 

Rules on Exemption from Compliance with the Prescribed Wage 

Increases/Cost of Living Allowances Granted by the Regional 

Tripartite Wages and Productivity Boards 

Pursuant to Section 3, Article 121 b of RA 6727 and Section 1, Rule VIII of the Revised 

Rules of Procedure on Minimum Wage Fixing, the following rules on exemption are hereby 

issued for strict compliance by all concerned:

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Section 1. Definition of terms 

A. Commission - refers to the National Wages and Productivity Commission. 

B. Board - refers to the Regional Tripartite Wages and Productivity Board. 

C. Order - refers to the Wage Order promulgated by the Board pursuant to its wage-fixing 

authority. 

D. Establishment - refers to an economic unit which engages in one or predominantly one 

kind of economic activity at a single fixed location. 

For purposes of determining eligibility for exemption, establishments under the same 

owner/s but separately registered with the Securities and Exchange Commission (SEC), 

Department of Trade and Industry (DTI) or Cooperative Development Authority (CDA) as 

the case may be, irrespective of their location, shall be treated as individual and distinct 

establishments. 

E. Retail Establishment - refers to one principally engaged in the sale of goods to end 

users for personal or household use. 

A retail establishment that regularly engages in wholesale activities loses its retail character. 

F. Service Establishment - refers to one principally engaged in the sale of services to 

individuals for their own or household use and is generally recognized as such. 

G. Distressed Establishment - refers to an establishment which meets the criteria enumerated 

in Section 3 A of this Guidelines. 

H. Capital - refers to paid-up capital at the end of the last full accounting period, in the case 

of corporations or total invested capital at the beginning of the period under review, in the 

case of partnerships and single proprietorships. 

I. Full Accounting Period - refers to a period of twelve (12) months or one year of business 

operations. 

J. Deficit - refers to the negative balance of the retained earnings account of a corporation. 

Retained earnings represent the cumulative balance of periodic earnings, dividend distributions, 

prior period adjustments and other capital adjustments. 

K. Stock Corporation - refers to one organized for profit and issues shares of stock to its 

members. 

L. Non-Stock Non-Profit Organization - refers to one organized principally for public 

purposes such as charitable, educational, cultural or similar purposes and does not issue 

shares of stock to its members. 

M. Partnership - refers to an association of two or more persons who bind themselves to 

contribute money, property or industry to a common fund with the intention of dividing the 

profits among themselves or for the exercise of a profession.


N. Single Proprietorship - refers to a business unit owned and controlled by only one 

person. 

O. Cooperative - refers to a duly registered association of persons who voluntarily join 

together to form a business establishment which they themselves own, control and patronize 

and which may fall under any of the following types: credit, consumers, producers, 

marketing, service or multi-purpose. 

P. New Business Enterprises - refer to establishments, including non-profit institutions, 

established within two (2) years from effectivity of the Wage Order based on the latest 

registration with the appropriate government agency such as SEC, DTI, CDA and Mayorís 

Office. 

Q. Quasi-banks - refer to institutions such as investment houses and financing companies 

performing quasi-banking functions as defined by the Bangko Sentral ng Pilipinas. 

Section 2. Categories of Exemptible Establishments. Exemption of establishments 

from compliance with the wage increases and cost of living allowances prescribed by the 

Boards may be granted in order to (1) assist establishments experiencing temporary difficulties 

due to losses maintain the financial viability of their businesses and continued employment of 

their workers; (2) encourage the establishment of new businesses and the creation of more 

jobs, particularly in areas outside the National Capital Region and Export Processing Zones, 

in line with the policy on industry dispersal; and (3) ease the burden of micro establishments, 

particularly in the retail and service sector, that have a limited capacity to pay. 

Pursuant to the above, the following categories of establishments may be exempted 

upon application with and as determined by the Board, in accordance with applicable criteria 

on exemption as provided in this Guidelines; provided further that such categories are expressly 

specified in the Order. 

1. Distressed establishments 

2. New business enterprises (NBEs) 

3. Retail/Service establishments employing not more than ten (10) workers 

4. Establishments adversely affected by natural calamities 

Exemptible categories outside of the abovementioned list may be allowed only if they 

are in accord with the rationale for exemption reflected in the first paragraph of this section. 

The concerned Regional Board shall submit strong and justifiable reason/s for the inclusion 

of such categories which shall be subject to review/approval by the Commission. 

Section 3. Criteria for Exemption. The following criteria shall be used to determine 

whether the applicant-establishment is qualified for exemption: 

A. Distressed Establishments 

1. For Stock Corporations/Cooperatives 

a. When deficit as of the last full accounting period or interim period, if any, immediately 

preceding the effectivity of the Order amounts to 20% or more of the paid-up capital 

for the same period; or

1550 


b. When an establishment registers capital deficiency i.e., negative stockholdersí equity 

as of the last full accounting period or interim period, if any, immediately preceding 

the effectivity of the Order. 

2. For Single Proprietorships/Partnerships 

a. Single proprietorships/partnerships operating for at least two (2) years may be granted 

exemption: 

a.1 When the net accumulated losses for the last two (2) full accounting periods 

and interim period, if any, preceding the effectivity of the Order amounts to 

20% or more of the total invested capital at the beginning of the period under 

review; or 

a.2 When an establishment registers capital deficiency i.e., negative net worth as 

of the last full accounting period or interim period, if any, immediately preceding 

the effectivity of the Order. 

b. Single proprietorships/partnerships operating for less than two (2) years may be 

granted exemption when the net accumulated losses for the period immediately 

preceding the effectivity of the Order amounts to 20% or more of the total invested 

capital at the beginning of the period under review. 

3. For Non-Stock Non-Profit Organizations 

a. Non-stock non-profit organizations operating for at least two (2) years may be granted 

exemption: 

a.1 When the net accumulated losses for the last two (2) full accounting periods 

and interim period, if any, immediately preceding the effectivity of the Order 

amounts to 20% or more of the fund balance/membersí contribution at the 

beginning of the period under review; or 

a.2 When an establishment registers capital deficiency i.e., negative fund balance/membersí 

contribution as of the last full accounting period or interim 

period, if any, immediately preceding the effectivity of the Order. 

b. Non-stock non-profit organizations operating for less than two (2) years may be 

granted exemption when the net accumulated losses for the period immediately 

preceding the effectivity of the Order amounts to 20% or more of the fund balance/ 

membersí contribution at the beginning of the period under review. 

4. For Banks and Quasi-Banks 

a. Under receivership/liquidation. Exemption may be granted to a bank or quasi-bank 

under receivership or liquidation when there is a certification from the Bangko Sentral 

ng Pilipinas that it is under receivership or liquidation as provided in Section 30 of 

RA 7653, otherwise known as the New Central Bank Act. 

b. Under controllership/conservatorship. A bank or quasi-bank under controllership/ 

conservatorship may apply for exemption as a distressed establishment under Section 

3 A of this Guidelines.


B. New Business Enterprises. Exemption may be granted to New Business Enterprises 

established outside the National Capital Region (NCR) and Export Processing Zones 

within two (2) years from effectivity of the Order, classified under any of the following: 

1. Agricultural establishments whether plantation or non-plantation. 

2. Establishments with total assets after financing of five million pesos (P5,000,000.00) and 

below. 

C. Retail/Service Establishments Regularly Employing Not More Than Ten (10) 

Workers. Exemption may be granted to a retail/service establishment when: 

1. It is engaged in the retail sale of goods and/or services to end users for personal or 

household use; and 

2. It is regularly employing not more than ten (10) workers regardless of status, except the 

owner/s, for at least six (6) months in any calendar year. 

D. Establishments Adversely Affected by Natural Calamities 

1. The establishment must be located in an area declared by a competent authority as under 

a state of calamity. 

2. The natural calamities, such as earthquakes, lahar flow, typhoons, volcanic eruptions, 

fire, floods and similar occurrences, must have occurred within 6 months prior to the 

effectivity of the Wage Order. 

3. Losses suffered by the establishment as a result of the calamity that exceed the insurance 

coverage should amount to 20% or more of the stockholdersí equity as of the last full 

accounting period in the case of corporations and cooperatives, total invested capital in 

the case of partnerships and single proprietorships and fund balance/membersí contribution 

in the case of non-stock non-profit organizations. 

Only losses or damage to properties directly resulting from the calamity and not incurred 

as a result of normal business operations shall be considered. 

4. Where necessary, the Board or its duly-authorized representative shall conduct an ocular 

inspection of the establishment or engage the services of experts to validate the extent of 

damages suffered. 

Section 4. Documents Required. The following supporting documents shall be submitted 

together with the application: 

For All Categories of Exemption 

Proof of notice of filing of the application to the President of the union/contracting party 

if one is organized in the establishment, or if there is no union, a copy of a circular giving 

general notice of the filing of the application to all the workers in the establishment. The proof 

of notice, which may be translated in the vernacular, shall state that the workersí representative 

was furnished a copy of the application with all the supporting documents. The notice 

shall be posted in a conspicuous place in the establishment.

1552 


A. For Distressed Establishments 

1. For corporations, cooperatives, single proprietorships, partnerships, non-stock non-profit 

organizations. 

a. Audited financial statements (together with the Auditorís opinion and the notes thereto) 

for the last two (2) full accounting periods preceding the effectivity of the Order filed 

with and stamped ìreceivedî by the appropriate government agency. 

b. Audited interim quarterly financial statements (together with the Auditorís opinion 

and the notes thereto) for the period immediately preceding the effectivity of the 

Order. 

Submission of audited interim financial statements shall be in accordance with the following 

schedule: 

EFFECTIVITY DATE OF INTERIM STATEMENTS 

WAGE ORDER REQUIRED 

First quarter of year No interim statements required; 

only the audited statement for the 

last two full accounting periods 

Second quarter of year 

Month 1 None; same as first quarter 

Month 2 None; same as first quarter 

Month 3 First quarter audited statement 

Third quarter of year 



Month 3 First & second quarters audited 

statements 

Fourth quarter of year 

Month 1 Second quarter audited statement 

Month 2 Second quarter audited statement 

Month 3 First, second & third quarters audited 

statements 

2. For Banks and Quasi-Banks 

a. Certification from Bangko Sentral ng Pilipinas that it is under receivership/liquidation. 

B. For New Business Enterprises 

1. Affidavit from employer regarding the following: 

a. Principal economic activity 

b. Date of registration with appropriate government agency 

c. Amount of total assets


2. Certificate of registration from the appropriate government agency. 

C. For Retail/Service Establishments Employing not more than Ten (10) Workers: 

1. Affidavit from employer stating the following: 

a. It is a retail/service establishment. 

b. It is regularly employing not more than ten (10) workers for at least six months in 

any calendar year. 

2. Business Permit for the current year from the appropriate government agency. 

D. For Establishments Adversely Affected by Natural Calamities 

1. Affidavit from the General Manager or Chief Executive Officer of the establishment regarding 


a. Date and type of calamity 

b. Amount of losses/damages suffered as a direct result of the calamity 

c. List of properties damaged/lost together with estimated valuation 

d. For properties that are not insured, a statement that the same are not covered by 

insurance. 

2. Copies of insurance policy contracts covering the properties damaged, if any. 

3. Adjusterís report for insured properties. 

4. Audited financial statements for the last full accounting period preceding the effectivity of 

the Order stamped ìreceivedî by the appropriate government agency. 

The Board may require the submission of other pertinent documents to support the 

application for exemption. 

Section 5. Action on Application for Exemption. Upon receipt of an application with 

complete documents, the Board shall take the following steps: 

a. Notify the DOLE Regional Office having jurisdiction over the workplace of the pendency 

of the application requesting that action on any complaint for non-compliance with the 

Order be deferred pending resolution of the application by the Board. 

b. Request the DOLE Regional Office to conduct ocular inspection, if necessary, of establishments 

applying for exemption to verify number of workers, nature of business and 

other relevant information. 

c. Act and decide on the application for exemption with complete documents, as much as 

practicable, within 45 days from the date of filing. In case of contested application, the 

Board may conduct conciliation or call hearings thereon. 

d. Transmit the decision of the Board to the applicant establishment, the workers or president 

of the union, if any, and the Commission, for their information; and the DOLE Regional 

Office concerned, for their implementation/enforcement.

1554 


The Board may create a Special Committee with one representative from each sector 

to expedite processing of applications for exemption. 

Section 6. Application for Projects/Branches/Divisions. Where the exemption being 

sought is for a particular project/branch/division not separately registered and licensed, the 

consolidated audited financial statements of the establishment shall be used as basis for 

determining its distressed condition. 

Section 7. Distressed Principal. Exemption granted to a distressed principal shall not 

extend to its contractor in case of contract(s) for construction, security, janitorial and/or 

similar services with respect to the employees of the latter assigned to the former. 

Section 8. Extent and Duration of Exemption. A full exemption of one (1) year shall 

be granted to all categories of establishments that meet the applicable criteria for exemption 

under Section 3 of this Guidelines. 

However, a partial exemption of 50% with respect to the amount or period of exemption 

shall be granted only in the case of distressed establishments as follows: 

a. For corporations/cooperatives. When deficit as of the last full accounting period or interim 

period, if any, immediately preceding the effectivity of the Order amounts to less 

than 20% of the paid-up capital of the same period. 

b. For single proprietorships/partnerships. When the net accumulated losses for the period 

under review amounts to at least 15% but less than 20% of the total invested capital at the 

beginning of the period under review. 

c. Non-stock non-profit organizations. When the net accumulated losses for the period 

under review preceding the effectivity of the Order amounts to at least 15% but less than 

20% of the fund balance/membersí contribution at the beginning of the period under 

review. 

Section 9. Procedures on Exemption 

A. For Filing of Application 

1. An application, in three (3) legible copies, may be filed with the appropriate Board by the 

owner/manager or duly authorized representative of an establishment, in person or by 

registered mail. 

The date of mailing shall be deemed as the date of filing. 

2. Applications for all categories shall be filed not later than sixty (60) days from publication 

of the approved implementing rules of the Order. 

In the case of NBEs, applications shall be filed not later than sixty (60) days from date of 

registration. 

3. The application shall be under oath and accompanied by complete supporting documents 

as enumerated under Section 4 of this Guidelines. In the case of an application with 

incomplete supporting documents, the applicant shall be notified to complete the same 

within ten (10) days from receipt of the notice; otherwise, the application shall be dismissed.


B. For Filing of Opposition. Any worker or, if unionized, the union in the applicant 

establishment, may file with the appropriate Board within fifteen (15) days from receipt of the 

notice of the filing of the application, an opposition to the application for exemption stating the 

reasons why the same should not be approved, furnishing the applicant a copy thereof. The 

fifteen (15) day period shall run only upon receipt of complete supporting documents. The 

opposition shall be in three (3) legible copies, under oath and accompanied by pertinent 

documents, if any. 

C. For Filing of Motion for Reconsideration. The aggrieved party may file with the 

Board a motion for reconsideration of the decision on the application for exemption within 

ten (10) days from its receipt and shall state the particular grounds upon which the motion is 

based, copy furnished the other party and the DOLE Regional Office concerned. 

No second motion for reconsideration shall be entertained in any case. The decision of 

the Board shall be final and executory unless appealed to the Commission. 

D. For Filing of Appeal to the Commission 

1. Appeal - Any party aggrieved by the decision of the Board may file an appeal to the 

Commission, through the Board, in two (2) legible copies, not later than ten (10) days 

from date of receipt of the decision. 

The appeal, with proof of service to the other party, shall be accompanied with a memorandum 

of appeal which shall state the date appellant received the decision, the grounds 

relied upon and the arguments in support thereof. 

The appeal shall not be deemed perfected if it is filed with any office or entity other than 

the Board. 

2. Grounds for Appeal - An appeal may be filed on the following grounds: 

a. Non-conformity with the prescribed guidelines and/or procedures on exemption; 

b. Prima facie evidence of grave abuse of discretion on the part of the Board; or 

c. Questions of law. 

3. Opposition - The appellee may file with the Board his reply or opposition to the appeal 

within ten (10) days from receipt of the appeal. Failure of the appellee to file his reply or 

opposition shall be construed as waiver on his part to file the same. 

4. Transmittal of records - Within five (5) days upon receipt of the reply or opposition of the 

appellee or after the expiration of the period to file the same, the entire records of the case 

which shall be consecutively numbered, shall be transmitted by the Board to the Commission. 

Section 10. Quorum and Votes Required. Four (4) members of the Commission or 

Board shall constitute a quorum to decide on the applications for or on appeals on exemption, 

provided each sector is represented. The Commission or Board may dispense with the latter 

proviso if the two (2) representatives of any sector fail to attend two (2) consecutive scheduled 

meetings with proper notice. The affirmative vote of the majority of the members constituting 

a quorum shall be necessary to carry a decision.

1556 


Section 11. Effect of Disapproved Application for Exemption. In the event that the 

application for exemption is not approved, covered workers shall be paid the mandated wage 

increase/allowance as provided for under the Order retroactive to the date of effectivity of 

the Order plus simple interest of one percent (1%) per month. 

Section 12. Non-Diminution of Benefits. Exemption granted under this Guidelines 

shall not be construed to reduce existing wages and other benefits enjoyed by the workers 

under existing laws, decrees, issuances or under any contract of agreement between the 

workers and employees. 

Section 13. Supplementary Guidelines on Exemption. The Board may issue 

supplementary guidelines for exemption in accordance with this Guidelines, subject to review/ 

approval by the Commission. 

Section 14. Effectivity. This Guidelines shall take effect fifteen (15) days after publication 


Section 15. Repeal. All Commission Guidelines previously adopted and inconsistent 

herewith are hereby repealed. 


(Sgd.) LEONARDO A. QUISUMBING (Sgd.) CIELITO F. HABITO 

Chairman Vice-Chairman 

(Sgd.) FRANCISCO R. FLORO (Sgd.) CEDRIC R. BAGTAS 


(Sgd.) EDUARDO T. RONDAIN (Sgd.) ROSELI C. CRUZ 


(Sgd.) CIRIACO A. LAGUNZAD III 

Member 


óo0oó 

NWPC Policy Guidelines No. 01, s. 2001 

Guidelines for Filing Applications for Exemption from 

Compliance with Wage Orders Allowing Exemption for 

Establishments Facing Potential Losses 

Pursuant to Section 3, Article 121 b of Republic Act 6727, Section 1, Rule VIII of the 

Rules of Procedures for Minimum Wage Fixing and Section 2 of NWPC Guidelines No. 01, 

Series of 1996, this Policy Guidelines shall govern the procedures and criteria for applications 

for exemption for establishments facing potential losses.


Section 1. Procedures on Exemption: 

A. An establishment facing potential losses, as defined under Section 2 hereof, may file 

application for exemption in three (3) legible copies with the appropriate Regional Tripartite 

Wages and Productivity Board (RTWPB), by the owner/manager or its duly authorized 

representative, in person or by registered mail, addressed to the Chairman, RTWPB. 

B. The date of mailing shall be deemed as the date of filing. 

C. Applications, which shall be under oath and supported by complete supporting documents, 

shall be filed within seventy-five (75) days from the date of publication of the 

approved Rules Implementing the Wage Order. 

D. Any worker or, if unionized, the union in the applicant establishment may file with the 

appropriate RTWPB within fifteen (15) days from receipt of the notice of filing of the 

application, an opposition to the application in three (3) legible copies stating the reasons 

why the same shall not be allowed, copy furnished the applicant. 

Section 2. Criteria for Exemption. The following criteria shall be used to determine 

whether an applicant establishment is qualified for exemption: 

A. For single proprietorships, partnerships and stock and non-stock corporations charging 

fees for services rendered, when projected losses during the current year of effectivity of 

the Order and, if applicable, the next full accounting year, amount to 20% or more of total 

paid up capital of the current year. 

B. In the case of non-stock non-profit organizations, when potential deficit (i.e. total receipts 

net of total expenses) during the current year of effectivity of the Order and, if applicable, 

the next full accounting year amounts to 20% or more of the fund balance/membersí 

contribution of the current year. 

Section 3. Documents Required for Exemption 

A. Proof of notice to the union president of the filing of application if unionized, or a copy of 

a circular giving general notice of the filing of the application to all the workers in the 

establishment. The union president or the workersí representative must be furnished, 

together with the notice of filing, a copy of the application for exemption with all the 

supporting documents. The notice shall be posted in a conspicuous place in the establishment. 

B. Projected financial statements for the current year of effectivity of the Order and, if 

applicable, the next full accounting year. 

C. To confirm the grant of exemption, audited financial statements for the full accounting 

period/s referred to in Section 2 A & B hereof stamped ìreceivedî by the SEC and/or BIR/ 

Bank to be submitted within twenty (20) days from submission to said agencies. 

D. Other documents that may be required by the Regional Board. 

Section 4. Duration of Exemption 

A. Exemption may be granted conditionally for one year from effectivity of the Order provided 

the company meets the criteria under Section 2 hereof. The one year-exemption

1558 


shall be confirmed upon showing of proof of actual losses as shown in the audited financial 

statements referred to in Section 3C hereof. In the absence of such actual losses, the 

company shall pay its workers the wage increases due them under the Order, retroactive 

to the effectivity of the Order. 

B. On the second year of the effectivity of the Wage Order, all covered workers shall receive 

the wage /COLA increase provided thereunder. 

C. Establishments granted conditional exemption under this category are strongly enjoined 

to refrain from laying off or retrenching workers during the one-year period of exemption. 

Section 5. Applicability of Pertinent Provisions of NWPC Guidelines No. 1, series 

of 1996. All other pertinent provisions of the Rules on Exemption pursuant to NWPC Guidelines 

No. 1, series of 1996 shall likewise apply. 

Section 6. Effectivity. This Guidelines shall take effect fifteen (15) days after publication 



(Sgd.) PATRICIA A. STO. TOMAS (Sgd.) DANTE B. CANLAS 

Chairperson Vice-Chairman 

(Sgd.) CEDRIC R. BAGTAS (Sgd.) DAVID L. DIWA 

Member, Workers Sector Member, Workers Sector 

(Sgd.) FRANCISCO R. FLORO (Sgd.) EDUARDO T. RONDAIN 

Member, Employers Sector Member, Employers Sector 

(Sgd.) ESTHER F. GUIRAO 

Officer-In-Charge-NWPC, Member 

OFFICE OF THE PRESIDENT 



Executive Order No. 218 

Strengthening the Support Mechanism for the 

Philippine Drug Enforcement Agency 



--o0o--




Directing the Transfer of the Philippine Rice Research Institute 

from the Office of the President to the Department of Agriculture, 

Amending for the Purpose, Executive Order No. 1061, As Amended 

by Executive Order No. 60, s. 1986 and Executive Order No. 76, s. 2002 





--o0o-- 


Directing the Adoption of the Code of Good Governance 

for the Professions in the Philippines 

WHEREAS, pursuant to Section 14, Article XII of the Constitution, ìthe sustained 

development of a reservoir of national talents consisting of Filipino scientist xxx professional 

xxx high-level technical manpower xxx shall be promoted by the State.î; (underscoring 

supplied) 

WHEREAS, good governance is one pillar of a strong republic; 

WHEREAS, by virtue of the provisions of Section 5 and 7(a) of Republic Act No. 8981, 

otherwise known as the PRC Modernization Act of 2000, the Professional Regulation 

Commission (PRC), hereinafter called the Commission, is empowered to adopt policies, 

such as professional standards and principles designed to enhance and maintain high 

professional, technical, and ethical standards in the practice of the professions; 

WHEREAS, the adoption of the Code of Good Governance will promote and establish 

ethical awareness and competency among Filipino professionals to make them accountable 

to their public liability and fully fulfill their professional obligation to their clients; and 

WHEREAS, the Code will empower professionals not only to upgrade or improve their 

technical and ethical proficiency but also to keep them abreast with modern trends and 

technology in their respective professions, thereby assuring the highly qualitative and globallycompetitive 

professional services, and secure the safety and protection of the public. 

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. The Code of Good Governance for the Professions in the Philippines shall 

be adopted by all registered professionals.

1560 


SEC. 2. The Governance Advisory Council and the Professional Regulation Commission 

(PRC) are hereby directed to undertake measures, including networking with government 

agencies and civil society, to effectively implement and enforce the Code through the 

Professional Regulatory Boards (PRBs) under the Commissionís supervision and control. 

SEC. 3. The PRC shall, after consultation with and upon recommendation of the various 

Boards, issue the necessary guidelines and procedures for the enforcement of the Code. 

SEC. 4. Repealing Clause - Any executive issuance, orders or provisions thereof 

inconsistent with the provisions of this Executive Order are deemed modified or repealed. 

SEC. 5. Effectivity - This Executive Order shall take effect immediately. 



By the President: 

(SGD.) ALBERTO G. ROMULO 

Executive Secretary 

--o0o-- 


Amending Executive Order No. 15 Series of 1998, Entitled 

ìRedirecting the Functions and Operations of the Department 

of Social Welfare and Developmentî 

WHEREAS, the Department of Social Welfare and Development, hereinafter referred 

to as DSWD, by virtue of Executive Order No. 15 Series of 1998, has been transformed from 

direct service deliverer to technical assistance provider as a result of the devolution of basic 

services to the local government units; 

WHEREAS, despite the devolution, legislations were enacted mandating the DSWD to 

provide direct assistance and/or intervention to the vulnerable sectors of the society; 

WHEREAS, the DSWD, which serves as the national policy and regulatory institution 

for social welfare and development, recognizes the need to strengthen its regulatory functions 

over the management and implementation of social welfare and development programs, 

office and facilities as well as social welfare and development agencies and service providers; 

WHEREAS, in order to effectively and efficiently carry out the mandate of the DSWD, 

there is a need to amend Executive Order No. 15, Series of 1998. 

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. Mandate. Consistent with the provisions of the Administrative Code of 

1987 and Republic Act 7160 (Local Government Code), the DSWD is hereby mandated to 

provide assistance to local government units (LGUs), non-government organizations (NGOs), 

other national government agencies (NGAs), peopleís organizations (POs) and members of 

civil society in effectively implementing programs, projects, and service that will alleviate 

poverty and empower disadvantaged individuals, families and communities for an improved 

quality of life as well as implement statutory and specialized programs which are directly 

lodged with the Department and/or not yet devolved to LGUs. 

SEC. 2. Roles of the DSWD 

a) Enabler of LGUs, NGOs, other NGAs, POs, and other members of civil society in 

implementing social welfare and development programs including disaster management 

through technical assistance, resource generation and augmentation; 

b) Implementor of statutory laws and specialized programs and services whenever these 

have not been devolved or localized; 

c) Developer and monitor of quality assurance measures/standards in the management/ 

implementation of related social welfare and development programs, offices and facilities; 

and 

d) Licensor and accreditor of social welfare development agencies and service providers; 

SEC. 3. Powers and Functions of the DSWD 

a) Set standards, accredit and provide consultative services to public and private institutions, 

organizations and persons engaged in social welfare activities, and monitor, performance 

and compliance to standards by institutions, organizations and persons engaged 

in social welfare activities, both public and private; 

b) Implement (i) residential care and center-based programs and services serving the 

whole region and/or more than two provinces/cities; (ii) pilot and demonstration social 

welfare and development projects; regular programs involving special social services and 

statutory programs; and (iii) crisis intervention. 

SEC. 4. Repealing Clause. Any executive issuance, orders or provisions thereof 

inconsistent with the provisions of this Executive Order are deemed modified or repealed. 

SEC. 5. Effectivity. This Order shall take effect upon its approval. 






--o0o--

1562 





Transferring the Presidential Action Center from the Office 

of the President to the National Anti-Poverty Commission 



--o0o-- 


Rationalizing the Extraction and Disposition of Sand and 

Gravel/Lahar Deposits in the Provinces of Pampanga, Tarlac and Zambales 

Adopted:04 July 2003 





--o0o-- 

General Order No. 4 

Directing the Armed Forces of the Philippines and the 

Philippine National Police to Suppress Rebellion 




--o0o-- 


Requests for Presidential Issuances and/or Approvals 

In the interest of efficiency in the processing of requests for Presidential issuances 

and/or approvals, such as executive orders, proclamations, administrative orders, 

memorandum orders, memorandum circulars and similar directives, it is hereby reiterated 

once more that such requests shall be submitted to the Office of the President only after


complete staff work has been conducted. The request shall enclose the basic papers and 

all documents related thereto, and with a covering Memorandum not exceeding two pages 

containing the following information: 

1. Justification - an explanation on the economic, administrative or other justification for 

the requested issuance or approval. 

2. Legal Basis - a statement citing the legal basis for the requested issuance or approval. 

3. Agencies Involved - a statement enumerating the Departments, agencies or offices 

that may be involved in, or affected by, the implementation of the requested issuance or 

approval. 

4. Coordination with Agencies - a statement that the necessary coordination or consultation 

were made with the agencies involved or affected, attaching copies of their comments/recommendation 

thereon duly signed by the Department Secretaries or Heads of 

Agencies concerned. 

5. Potential Problems - a statement on the potential risks, problems, or complications, if 

any, that may arise if the request for Presidential issuance or approval is granted or 

denied. 

Requests for Presidential issuances and/or approval not complying with the foregoing 

requirements may be returned to the requesting Department/Agency/Official for completion 

of necessary staff work. 

For compliance. 



By authority of the President: 



--o0o-- 


Designating the Bangko Sentral ng Pilipinas as the Exclusive 

Manufacturer of Presidential Medals and Decorations 

WHEREAS, the Bangko Sentral ng Pilipinas (BSP), as the central monetary authority, 

has the exclusive authority to issue Philippine coins and to prescribe the design, fineness 

and other characteristics thereof; 

WHEREAS, the BSP Mint has the equipment and skilled technicians trained abroad in 

the exacting art of manufacturing state and military medals and decorations;

1564 


WHEREAS, presidential medals and decorations, being official symbols of the 

presidency, should be the product of superior workmanship and artistic excellence; 

WHEREAS, the BSP has the capacity and has expressed willingness to undertake the 

manufacture, as is the practice in other countries, of presidential and other state medals and 

decorations; 


by the power vested in me by law, do hereby order: 

Section 1. The Bangko Sentral ng Pilipinas is hereby designated as exclusive 

manufacturer and supplier of presidential medals and decorations, subject to existing 

agreements, if any, entered into by the Office of the President with medal and decoration 

manufacturers. For this purpose, the Historical Affairs Office and the Protocol Office shall 

continue consultations with the BSP with respect to the manufacture of these items, to 

include the drafting of technical and gender-friendly drawings for these decorations to replace 

the original, but missing, specifications; 

Sec. 2. Other agencies, particularly the Department of Foreign Affairs, the Department 

of National Defense and the Armed Forces of the Philippines, are encouraged, as a costsaving 

measure and to maximize the revenue-generating potential of a government 

instrumentality, to tap the services of the BSP for their medal and decoration requirements, 

subject to existing laws on procurement. 

Sec. 3. All issuances, rules and regulations inconsistent herewith are superseded or 

modified, accordingly. 

Sec. 4. This Order shall take effect immediately. 






--o0o-- 


Establishing a Housing Committee in all Departments, National Government 

Agencies Including Government-Owned and Controlled Corporations 

and its Intrumentalities and Defining its Functions 

WHEREAS, Section 9 of Article XIII of the Philippine Constitution provides that the 

State shall undertake, in cooperation with the private sector, a continuing program of urban 

land reform and housing which will make available at affordable cost decent housing and 

basic services to underprivileged and homeless citizens in urban centers and resettlement 

areas; and,


WHEREAS, there is a need to ascertain the housing needs and capacity of public 

sector employees to ensure the development of a housing program/project that is responsive 

to them. 


by virtue of the powers vested in me by law, do hereby order all Departments, Government 

Agencies including GOCCs and its instrumentalities to create a housing committee in their 

respective department/agency that shall perform the following functions: 

1. Conduct, in coordination with the Housing and Urban Development Coordinating Council 

(HUDCC) and concerned key shelter agencies (KSAs), an in-house survey to determine 

employeesí housing needs and capabilities; and 

2. Formulate and implement, in coordination with HUDCC and concerned KSAs and Government-Owned 

and Controlled Corporations, a housing program/project responsive to 

the need of employees. 

All issuances, orders, rules and regulations or parts thereof which are inconsistent with 

the provisions of this Administrative Order are hereby repealed or modified accordingly. 

This Administrative Order shall take effect immediately. 






--o0o-- 


Prescribing Guidelines on the Issuance by the Authentication Office, 

Office of the President, of Certification for the Authentication of 

Signatures on Documents for Use in Foreign Countries 

The following guidelines are hereby prescribed for the issuance by the Authentication 

Office, Office of the President, of a certification authenticating the signatures on documents 

to be used in foreign countries. When used in this Circular, the term ìdocumentî shall refer 

to such instrument, deed or paper, with its enclosures, presented for authentication, unless 

the context clearly suggested otherwise. 

1. The text of the certification shall substantially hew to the following formulation: 

ìI, the undersigned authentication officer, Office of the President, do hereby 

certify that: 

whose name appears on the attached certificate was, at the time of signing the 

said certificate, duly authorized by the laws of the Republic of the Philippines to


sign the same, and that full faith and credit are and ought to be given to his official 

acts; and I further certify that I am familiar with his handwriting and confirm that 

the signature and seal affixed to the said certificate are genuine.î 

2. The Certification attests to the genuineness of the signature appearing on the attached 

certification for the purpose of identifying a specific document and giving credence to the 

official acts of the notary public or certifying officer thereon for use, if and when required, 

as instrument of evidence in foreign countries. 

The Certification does not attest to the validity, efficacy, or enforceability of the basic 

document itself. 

3. The authentication officer may require the submission of an updated signature specimen 

of the certifying officer, the production of such other documents or shall take such appropriate 

measures necessary to ensure the integrity of the authentication process and the 

certification to be issued. Any doubt entertained by the authentication officer as to the 

authenticity of the document, with its enclosures, and/or the signature/s appearing thereon, 

shall be promptly referred to his/her immediate superior. 

4. No document shall be processed for authentication unless it has been properly certified 

and only upon proof of payment of the prescribed authentication fee and other charges; 

Provided, however, that documents emanating from a Philippine government agency must 

be made on the official stationery and shall bear the official seal of that agency. 

5. Listed hereunder are the documents and the corresponding certifying officers: 

5.1 For Public Documents: 

5.1.1 Birth, death and marriage certificate - the authorized official of the National 

Statistics Office (NSO), provided that the authentication officer may require, with 

respect to marriage certificate of Muslims, that the certification of the Clerk of 

Court of the Shariah Court of the place where the marriage was solemnized be 

appended to the NSO certification. 

5.1.2 Diploma, transcript of records and certificate of completion - the proper 

official of the Department of Education (DepEd), or, in appropriate cases the 

Commission on Higher Education (CHED) or Technical Education Skills Development 

Authority (TESDA). 

5.1.3 Certificate of Board Examination - the proper official of the Professional 

Regulations Commission (PRC). 

5.1.4 Land Transportation Office (LTO) certificate - the proper LTO official. 

5.1.5 National Bureau of Investigation (NBI) - the proper NBI official. 

5.1.6 Photo or machine copy of government contracts on official file - the records 

custodian of the contracting agency.


5.1.7 Authority to import or export arms or ammunitions - the proper official of the 

Philippine National Police (PNP). 

5.1.8 Artist Record Book - proper TESDA official; other overseas employment 

instrument - the proper official of the Philippine Overseas Employment Administration 

(POEA) or the Department of Labor and Employment. 

5.1.9 Other public documents - the proper official of the issuing agency. 

5.2 For Private Documents: 

5.2.1 A notarized deed or document executed in the Philippines - the Clerk of 

Court of the Court which issued the notarial commission. 

5.2.2 A document executed by a Filipino in a foreign country - the proper official 

of the Philippine Embassy or the nearest Consular Office. 

5.2.3 Medical certificate from a private clinic or hospital - the proper official of the 

Department of Health. 

6. A document executed between a Filipino and a foreign national shall comply with authentication 

requirements of both the laws of the Philippines and the laws of the country of the 

foreign national. 

7. The transmittal list of documents received and released for any given day shall be prepared 

and furnished by the Authentication Office, Office of the President, to the Authentication 

Office, Office of Consular Services, Department of Foreign Affairs, containing the 

control number, number of applicants, Official Receipt number, number of certifications, 

amount paid and the name of the authentication officer. 

8. In line with the requirements of efficient and effective governance, the Authentication 

Office, Office of the President, shall adopt mechanisms to ensure that applications for 

authentication are attended with dispatch on a ìfirst come, first servedî basis. 

9. Memorandum Circular No. 55, series of 1988, and all other issuances, rules and regulations, 

insofar as they are inconsistent with this Circular, are hereby superseded or 

modified accordingly. 

10. This Memorandum Circular shall take effect immediately. 



By Authority of the President: 



--o0o--

1568 



Imposing the Penalty of Dismissal from the Service of P/SSUPT 

Michael Ray B. Aquino of the Philippine National Police for 

Absence Without Official Leave (AWOL) 

Before this Office is the administrative case against Police Senior Superintendent 

Michael Ray B. Aquino of the Administrative Holding Office, Headquarters Support Service, 

Philippine National Police (PNP), for alleged Absence Without Official Leave (AWOL) for 

more than thirty (30) days effective August 1, 2001 up to the present. 

On 10 July 2001, this Office issued a presidential clearance for the PNP to conduct 

administrative investigation against the subject PNP officer for the aforesaid offense. 

In his letter-report dated 12 April 2002, PNP Chief Director General Leandro R. Mendoza 

found P/SSUPT Aquino guilty of the offense charged and recommended his dismissal from 

the police service. A copy of the letter-report is attached hereto as Annex ìAî * and made an 

integral part thereof. 

The Presidential Adviser for Police Affairs, in his Memorandum of 10 May 2002, 

concurred with the above recommendation of the PNP Chief with prejudice to future re-entry 

to the police service. 

Section 42 of Republic Act (RA) No. 6975, as amended by Section 53 of RA 8551, 

provides the following: 

ìSEC 42. Summary Dismissal Powers of the National Police Commission, 

PNP Chief, and the PNP Regional Directors - The National Police Commission, 

the Chief of the PNP and the Chief of the PNP regional directors, after due notice 

and summary hearings, may immediately remove or dismiss any respondent 

PNP member in any of the following case. 

x x x x x x 

Any member or officer of the PNP who shall go on absence without Official 

leave (AWOL) for a continuous period of thirty (30) days or more shall be 

dismissed immediately from the service. His activities and whereabouts during 

the period shall be investigated and if found to have committed a crime, he shall 

be prosecuted accordingly.î (italics ours) 

There is no doubt that subject PNP officer has not been seen or heard shortly after 

former President Joseph Estrada left his post in January 2001. To date, he has not reported 

to his new assignment at the Administrative Holding Office, Headquarters Support Service 

nor appeared during investigation of the instant case. Accordingly, his dismissal from the 

police service is in order. 

*Annex not filed with ONAR.


WHEREFORE, as recommended by the PNP Chief and NAPOLCOM, Police Senior 

Superintendent Michael Ray B. Aquino is hereby DISMISSED from the police service with 

prejudice to future re-entry into the police service. 

SO ORDERED. 






--o0o-- 


Directing the Secretary of the Department of Transportation and 

Communications (DOTC) to Exercise Primary Oversight Functions 

Over the North Rail Project, Transferring the North Luzon Railways 

Corporation [NORTHRAIL] from the Office of the President to the DOTC, 

and Reorganizing the Respective Governing Boards of Northrail 

and the Philippine National Railways [PNR] 








--o0o-- 


Streamlining the Rules and Procedures of Defense Contracts 

WHEREAS, in line with the governmentís program of good governance, there is a need 

to streamline procedures for defense contracts for the expeditious implementation of defense 

projects and the speedy response to security threats while promoting transparency, impartiality, 

and accountability in government transactions;

1570 


WHEREAS, to achieve the foregoing, the Task Force created by the undersigned to 

study the procurement process and fund disbursement system of the AFP has recommended 

the issuance of an Executive Order to streamline the rules and procedures on defense 

contracts; 



Section 1. Signing and Approving Authority. Except for contracts required by law to be 

acted upon and/or approved by the President, the Secretary of National Defense shall have 

the authority to sign and/or approve Government contracts of the Department of National 

Defense and any of its bureaus, offices or agencies, before the Government contracts shall 

be considered approved in accordance with law and binding on the Government; Provided, 

however, that the Secretary of National Defense may delegate in writing to appropriate 

officials, subject to appropriate ceilings, this authority to sign and/or approve a Government 

contract below Fifty Million Pesos (50 Million), as he sees fit under the circumstances: 

Provided, further, that for Government contracts of the Armed Forces of the Philippine involving 

an amount below Fifty Million Pesos (P50 Million), the Chief of Staff of the Armed Forces of 

the Philippines shall have full authority to sign the same. 

Section 2. Creation of a Single GHQ BAC; Composition. In accordance with and 

subject to the provisions of law, for the purpose of the immediately preceding Section, the 

Armed Forces of the Philippines shall be considered as a procuring entity with respect to 

Government contracts pertaining to it, and it shall establish in its General Headquarters 

(GHQ) a single Bids and Awards Committee (BAC) to undertake all public biddings therein. 

The GHQ BAC shall be composed of the following members: 

Regular Members: 

1. Chairman, who is at least a third ranking permanent officer of the Armed Forces of the 

Philippines; 

2. An officer, who is at least a fifth ranking permanent officer of the Armed Forces of the 

Philippines, with knowledge, experience, and/or expertise in procurement and, to the 

extent possible, represents the legal or administrative area of the Armed Forces of the 

Philippines; 

3. An officer, who is at least a fifth ranking permanent officer of the Armed Forces of the 

Philippines, and, to the extent possible, represents the finance area of the Armed Forces 

of the Philippines; 

Provisional Members: 

4. An officer of the subordinate unit of the Armed Forces of the Philippines to which the 

procurement pertains, who has technical expertise relevant to the procurement at hand, 

and to the extent possible, has knowledge, experience, and/or expertise in procurement; 

and 

5. A representative from the end user unit who has knowledge of procurement laws and 

procedures.


The members of the BAC, including the Chairman and the Vice-Chairman, shall be 

designated by the Chief of Staff of the Armed Forces of the Philippines. Moreover, the Vice- 

Chairman shall be selected from among the regular members of the BAC. 

Section 3. BAC Secretariat; Technical Working Group. The Chief of Staff of the 

Armed Forces of the Philippines shall create a Secretariat which shall serve as the main 

support unit of the BAC. He may designate an existing organic office within the GHQ to serve 

as Secretariat. However, he may reorganize any relevant unit within the GHQ by designating 

it as a BAC Secretariat and redeploying appropriate existing personnel to it to perform this 

function, as well as procurement related tasks. The Head of the BAC Secretariat shall be at 

least a fifth ranking permanent employee. 

The BAC shall be supported by a Technical Working Group. For this purpose each 

subordinate unit of the Armed Forces of the Philippines shall maintain a pool of technical, 

financial and legal experts, which pool may be called upon by the BAC, depending on the 

type of procurement involved, to assist in the procurement process, particularly in the review 

of bidding documents, in the eligibility screening, evaluation of bids and post qualification. 

Section 4. This Executive Order takes effect immediately. 






--o0o-- 


Encouraging the Conversion of Tricycle Operators and 

Drivers Associations (TODA) into Transport Service Cooperatives 

WHEREAS, tricycles play a vital role in the movement of passengers, particularly in 

remote areas and/or subdivisions where other modes of transportation do not serve the 

public; 

WHEREAS, the tricycle sector is greatly affected by R.A. 8749, otherwise known as 

the Philippine Clean Air Act, the implementation of which, the tricycle sector workers fear, 

may result in losing their only means of livelihood; 

WHEREAS, during the indoor rally of the Tricycle Operators and Drivers Associations 

(TODAs) in Cuneta Astrodome on 03 January 2003 government assistance was sought for 

TODAs to establish cooperatives that will allow them, among others, put up gasoline stations; 

WHEREAS, tricycle operations need to be converted into transport service cooperatives 

for them to be eligible for various projects/programs of the government designed primarily for 

the poor and marginalized sectors of our society;

1572 


WHEREAS, the conversion of tricycle operations into transport service cooperatives 

will serve as a practical vehicle for promoting self reliance and harnessing people power in 

the attainment of economic growth, development and social justice towards the envisioned 

strong Republic; 

WHEREAS, Office of Transportation Cooperatives (OTC), an attached agency of the 

Department of Transportation and Communications, is mandated under Executive Order No. 

898, series of 1983 to promote the growth and development of transportation cooperatives as 

a vehicle to uplift the socio-economic condition of the workers of the transport industry, 

particularly the drivers; and 

WHEREAS, the Department of Interior and Local Government (DILG) issued 

Memorandum Circular No. 2002-35 dated March 7, 2002 to all Local Government Units/ 

Executives and all other concerned to support the Koop Paradahan, Pook Sakayan (KPPS) 

project and the conversion of tricycle associations into transport service cooperatives. 


by virtue of the powers vested in me by law do hereby order: 

SECTION 1. The Department of Transportation and Communications (DOTC) thru the 

Office of the Transportation Cooperatives (OTC) is hereby directed, as the lead agency, to 

enhance and intensify the voluntary conversion of tricycle operators/associations into transport 

service cooperatives in close coordination with the Department of Interior and Local Government 

(DILG) thru the Bureau of Local Government Development (BLGD). Said agencies shall 

include in its regular plans and programs such conversion of tricycle associations into transport 

service cooperatives and for other purposes. 

SEC. 2. The DOTC, thru the OTC, is authorized to call upon any Department, Bureau, 

or Office for such assistance it may require in the performance and attainment of the objectives 

of this order. 

SEC. 3. The joint collaborative effort, commitment and coordination of the private sector, 

particularly that of the National Union of Transportation Cooperatives and National Federation 

of Tricycle Operators and Drivers Association, is also enjoined. 

SEC. 4. This Memorandum Order shall take effect immediately. 






--o0o--



Directing Local Authorities to Simplify and Rationalize their Civil 

Application Systems, and the Secretary of Interior and Local 

Government and Secretary of Trade and Industry to Facilitate the 

Streamlining of Procedures in the Issuance of 

Local Permits and Clearances 

WHEREAS, red tape is a disincentive to business opportunities and presents 

opportunities for graft and corruption; 

WHEREAS, in order to address red tape, there is an urgent need to simplify and 

rationalize application systems in such areas as business permits, building permits, certificate 

of occupancy, real property documents and civil registry documents; 

WHEREAS, the simplification and rationalization of civil application systems will enhance 

revenue generation efforts, facilitate investments and promote transparency, accountability, 

level playing field and efficiency and effectiveness in local administration; and 

WHEREAS, business-friendly local government policies and procedures strengthen 

the foundation of good local governance and are essential in the building of competitive local 

economies; 



Section 1.All Mayors of Cities and Municipalities are hereby directed to simplify and 

rationalize the issuance of business permits, building permits, certificate of occupancy and 

other clearances in terms of documentary requirements, procedures and signatories, 

processing time and processing cost. 

Sec. 2. The Secretary of Interior and Local Government and the Secretary of Trade 

and Industry shall facilitate the simplification of such civil application systems, and shall 

jointly take the lead in the implementation of the following concerns: 

(a) Conduct of National and Regional Gatherings of Business-Friendly Cities and Municipalities 

as fora in the sharing of insights and experiences in the promotion of investorfriendly 

environments at the local government level; 

(b) Documentation and popularization of good practices; and 

(c) Monitoring of the performance of cities and municipalities. 

Sec. 3. The Secretary of Interior and Local Government and Secretary of Trade and 

Industry shall jointly prepare and submit a semestral report to the Office of the President, 

through the Presidential Management Staff, on actions taken and accomplishments in 

compliance with this Memorandum Order.

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Sec. 4. This Memorandum Order shall take effect immediately. 






--o0o-- 


Establishing the Honors Code of the Philippines to Create an Order 

of Precedence of Honors Conferred and For Other Purposes 


OFFICE OF THE OMBUDSMAN 



Creation of an Internal Affairs Board 

Pursuant to the authority vested in the Office of the Ombudsman under Sections 11 and 

18 of Republic Act No. 6770, otherwise known as the ìOmbudsman Act of 1989î, cognizant 

of the principle that public office is a public trust and that all public officers and employees, 

including the officials and employees of the Office of the Ombudsman, must at all times be 

accountable to the people, the Office of the Ombudsman deems it imperative to create the 

Internal Affairs Board and staffs to ensure the highest integrity of its officials and employees. 

Accordingly, the Office hereby promulgates the following rules and guidelines: 

I. STATEMENT OF POLICY 

A. The Office of the Ombudsman shall inculcate among its officials and employees the 

faithful observance of the Code of Conduct and Ethical Standards for Public Officials and 

Employees, all laws, rules and regulations concerning the civil service and public accountability, 

and rules and regulations of the Office of the Ombudsman.


B. The Office of the Ombudsman shall promulgate and execute programs and procedures 

that shall ensure the highest integrity of its officials and employees. 

C. The Office of the Ombudsman shall act on all complaints filed in any form or manner 

against any incumbent or former official or employee of the Office of the Ombudsman, 

and for this purpose, shall adopt and promulgate stringent rules that shall ensure fairness, 

impartiality, propriety and integrity in all its actions. 

II. FUNCTIONS OF THE INTERNAL AFFAIRS BOARD AND STAFFS 

The functions, duties and responsibilities of the Internal Affairs Board (lAB or Board, 

for brevity) and the IAB staffs are as follows: 

A. INTERNAL AFFAIRS BOARD 

1. The Board shall recommend to the Ombudsman policies, programs and procedures that 

shall ensure strict compliance by officials and employees of the Office of the Ombudsman 

with the Code of Conduct and Ethical Standards for Public Officials and Employees, all 

laws, rules and regulations concerning the civil service and public accountability, as well 

as rules and regulations of the Office of the Ombudsman. These policies, programs, and 

procedures may pertain to sustainable systems for the conduct of integrity checks, performance 

audit, personnel background investigations, lifestyle checks and the like. 

2. The Board shall recommend to the Ombudsman the promulgation of a code of conduct 

and ethical standards for all officials and employees of the Office of the Ombudsman, and 

separate codes that shall apply to various positions, groups of positions or component 

units of the Office; Provided, that said codes shall form part of office rules and regulations; 

Provided, further, that said codes shall be consistent with the Code of Conduct and 

Ethical Standards for Public Officials and Employees (Republic Act No. 6713), and all 

other laws, rules and regulations concerning the civil service and public accountability. 

3. The Board shall recommend to the Ombudsman the promulgation of manuals of operations 

that shall apply to bureaus, offices and/or component units of the Office to ensure 

the faithful performance of its mandated functions, duties and responsibilities, in accordance 

with the eight norms of conduct of public officials and employees as provided for in 

Section 4 of R.A. No. 6713. 

4. The Board may direct any official or employee to render assistance to the IAB in the 

formulation of policies, programs, procedures, codes of conduct and manuals of operations. 

5. The Board shall act on all complaints against any official or employee of the Office of the 

Ombudsman involving charge(s) allegedly committed singly or in conspiracy with any 

person. 

6. The Board, consistent with the policies provided herein, may, with the approval of the 

Ombudsman, request any intelligence or investigating agency or direct any official, em-

1576 


ployee, or component unit of the Office of the Ombudsman other than the IAB Staffs, to 

conduct an intelligence operation or fact-finding investigation on any official or employee 

of the Office of the Ombudsman. 

B. IAB PROGRAM STAFF (PS) 

The lAB-PS, under the supervision of the IAB Chairman, shall render legal, technical 

and administrative assistance to the IAB in the performance of its functions mentioned in 

parts (II)(A)(1) to (II)(A)(4) hereof. 

C. INVESTIGATING STAFF (IS) 

The IAB-IS, under the supervision of the Board Chairman, shall conduct the necessary 

intelligence operation or fact-finding investigation, preliminary investigation and/or 

administrative adjudication, and shall render such other legal, technical and administrative 

assistance as the IAB may require in the performance of its functions set forth in parts 

(II)(A)(5) and (II)(A)(6) hereof. 

D. IAB ADMINISTRATIVE OFFICER 

The IAB Administrative Officer, under the supervision of the Board Chairman, shall 

render administrative assistance to the Board in the management of records, in the raffling 

for the selection of evaluating officers, investigators, members of investigating panels, and 

IAB Division team leaders and members, in the calendaring of hearings and meetings of the 

Board, and perform such other functions, duties and responsibilities that may be assigned to 

the Administrative Officer. 

III. COMPOSITION OF THE INTERNAL AFFAIRS BOARD AND STAFFS 

A. The Internal Affairs Board (IAB) is hereby constituted with the following membership: 

1. The Overall Deputy Ombudsman 

2. The Special Prosecutor 

3. The Deputy Ombudsman for Luzon 

4. The Deputy Ombudsman for the Visayas 

5. The Deputy Ombudsman for Mindanao 

6. The Deputy Ombudsman for the Military 

The Chairman and the Vice-Chairman of the IAB shall be designated by the Ombudsman 

from among the members of the lAB for a term of one year. They may be redesignated at 

the discretion of the Ombudsman. 

B. The IAB shall have its support staff composed of the following: 

1. The IAB Program Staff or the lAB-PS shall be composed of the (a) Human Resource 

Management Officer V of the Central Office; (b) the Human Resource Management 

Officers of the Area/Sectoral Offices, including the Office of the Special Prosecutor; 

(c) the Head Executive Assistant; and (d) other officials and employees of the 

Office who may be recommended by the lAB for designation by the Ombudsman for 

a term of one year and who may be redesignated at the discretion of the Ombudsman.


The Coordinator of the IAB Program Staff (PS) shall be designated by the Ombudsman 

from among the members of the PS. 

2. The IAB Investigating Staff or IAB-IS shall be composed of officers and employees of 

the Office of the Ombudsman who are of known integrity and probity, and who shall 

be designated by the Ombudsman to act as investigators and/or hearing officers in 

cases cognizable by the IAB; Provided, that the Ombudsman shall designate as 

members of the lAB-IS at least two (2) officers/employees from each of the Area/ 

Sectoral Offices, including the Office of the Special Prosecutor; Provided, further, 

that the members of the IAB-IS shall have a term of office of one (1) year and may 

be redesignated at the discretion of the Ombudsman. 

3. The IAB Administrative Officer shall be designated by the Ombudsman for a term of 

one year and may be redesignated at the discretion of the Ombudsman. 

IV. PROCEDURES IN HANDLING COMPLAINTS 

A. Form of Complaints. The Office of the Ombudsman, through the IAB, shall act on all 

complaints in any form against its officials and employees, involving charge(s) allegedly 

committed singly or in conspiracy with any other person, filed by the public or by any 

official or employee of the Office, whether said complaint is made orally or in writing, 

signed or unsigned, verified or not verified or in any other form. 

B. Receipt of Complaints. All complaints against any official or employee of the Office of 

the Ombudsman, involving charge(s) allegedly committed singly or in conspiracy with any 

other person, may be addressed to: 

The Chairman 

Internal Affairs Board 

Office of the Ombudsman 

Agham Road, Quezon City 

The complaint may be received by any of the component units of the Office, which shall 

immediately forward it to the IAB Administrative Officer. 

For purposes of this Order, the component units of the Office of the Ombudsman are the 

Central Office, Office of the Special Prosecutor, Office of the Deputy Ombudsman for 

Luzon, Office of the Deputy Ombudsman for the Visayas, Office of the Deputy Ombudsman 

for Mindanao, and Office of the Deputy Ombudsman for the Military. 

C. Assignment of a Reference Number. Upon receipt of the complaint by the IAB Administrative 

Officer, the same shall be assigned a sequential reference number and forwarded 

to the IAB Chairman for assignment to an investigator for the conduct of evaluation. 

D. Assignment of Complaints for Evaluation. Upon receipt of the complaint, the Board 

Chairman, with the assistance of the lAB Administrative Officer, shall assign the same to a 

member of the IAB-IS by raffle, for the conduct of an initial evaluation thereof. 

In the absence of the Board Chairman or where the Board Chairman is disqualified or 

has voluntarily inhibited himself from participating in the proceedings, the IAB Vice-Chair-

1578 


man or the IAB member designated by the Ombudsman, in that order of priority, shall act 

in his stead. 

E. Conduct of Evaluation. Upon receipt of the complaint, the investigator shall evaluate the 

complaint and submit to the lAB Chairman, within five (5) days from receipt thereof, an 

evaluation report, which shall contain, among others, the following: 

1. A statement as to the form and substance of the complaint; 

2. The identity and rank of the respondent (s}; 

3. The actions recommended to be taken, which may be any of the following: 

a. To proceed with the conduct of a preliminary investigation and/or administrative 

adjudication and to further recommend the issuance of preventive suspension where 

applicable; Provided, that the complaint is sufficient in form and substance; Provided, 

further, that if the complaint is not under oath, the investigator shall first require the 

complainant to subscribe to it under oath; 

b. To conduct a fact-finding investigation or intelligence operations; 

c. To dismiss the complaint outright; or 

d. To refer the complaint to an official, bureau, board, committee or such other unit 

in the Office of the Ombudsman, for appropriate action, such as, but, not limited to any 

of the following: 

1) Directing the respondent and/or his immediate supervisor to immediately 

act on a particular matter; 

2) Referral of the complaint to the appropriate board, committee or office 

unit such as, but not limited to the Decorum and Investigation Committee (for 

cases pertaining to sexual harassment), or the Grievance Committee (for workrelated 

issues giving rise to employee dissatisfaction such as interpersonal 

relationship and linkages, protests on appointments, non-implementation of policies, 

practices and procedure on economic and financial issues, as well as 

those affecting recruitment, promotion, transfer, retirement, termination and 

the like) or the public assistance unit; or 

3) Recommending to the authorized official non-disciplinary management 

action. 

F. Action on the Evaluation Report 

1. Where the Evaluation Report recommends the conduct of a preliminary investigation 

and/or administrative adjudication against any official or employee of the Office of 

the Ombudsman, the Chairman shall approve the same, and the case shall immediately 

be docketed and assigned by raffle, with the assistance of the IAB Administrative 

Officer, to an IAB Investigator or panel, or to the IAB, either in division or en banc, 

when proper.


2. Where the Evaluation Report recommends the conduct of a fact-finding investigation, 

the case shall immediately be assigned by raffle with the assistance of lAB 

Administrative Officer, to an IAB-IS investigator or a panel of IAB-IS investigators, at 

the discretion of the lAB Chairman. 

3. In case the IAB Chairman disagrees with the recommendation to conduct an 

intelligence operation, fact-finding investigation, preliminary investigation and/or 

administrative adjudication, the decision of the IAB Chairman shall prevail. The report 

shall be approved by the following: 

a. The IAB Chairman, where the respondent or highest ranking respondent occupies 

a position belonging to the first level in the career service, or who is in the noncareer 

service with Salary Grade 13 and below; 

b. The IAB en banc, where the respondent or highest ranking respondent occupies 

a position belonging to the second level of the career service with Salary Grade not 

higher than 24, or who is in the non-career service with Salary Grades 14 to 24; 

c. The Ombudsman, upon recommendation of the IAB, where the respondent or 

the highest ranking respondent occupies a position with Salary Grade 25 or above. 

4. The preventive suspension order, when proper, shall be approved in accordance 

with the immediately preceding section. 

5. Where the evaluation report recommends any action other than the conduct of 

preliminary investigation and/or administrative adjudication or fact-finding investigation/intelligence 

operation, the approval required in part (IV)(F)(3) above should 

likewise be obtained. 

G. Conduct of Fact-Finding Investigation or Intelligence Operation 

1. Where the conduct of a fact-finding investigation or intelligence operation is found to 

be proper on the basis of a complaint, or at the instance of the IAB Chairman, IAB 

en banc or the Ombudsman, the 1AB Chairman, with the assistance of the IAB 

Administrative Officer, shall assign the case by raffle to an IAB-IS investigator or to 

a panel of IAB-IS investigators. 

2. The lAB-IS investigator or panel of IAB-IS investigators shall submit an Intelligence or 

Fact-Finding Report, together with his/its recommendation, to the IAB Chairman 

within sixty (60) days from his/its receipt of the complaint. 

H. Action on the Intelligence or Fact-Finding Investigation Report 

1. Where the Intelligence or Fact-Finding Report recommends the conduct of a preliminary 

investigation and/or administrative adjudication against an official or employee 

of the Office of the Ombudsman, the Chairman shall approve the same and direct 

the investigator or panel of IAB-IS investigators to prepare the necessary complaint. 

The case shall immediately be docketed and assigned by raffle, with the assistance 

of the IAB Administrative Officer, to another IAB investigator or panel, or to the IAB, 

either in division or en banc, when proper.

1580 


2. In case the IAB Chairman disagrees with the recommendation to conduct preliminary 

investigation and/or administrative adjudication, the decision of the Board Chairman 

shall prevail. 

The report shall be approved by the following: 

a. The IAB Chairman, where the respondent or the highest ranking respondent 

occupies a position belonging to the first level in the career service, or who is in the 

non-career service with Salary Grade 13 and below; 

b. The IAB en banc, where the respondent or the highest ranking respondent 

occupies a position belonging to the second level of the career service with Salary 

Grade not higher than 24, or who is in the non-career service with Salary Grades 14 to 

24; 

c. The Ombudsman, upon recommendation of the IAB, where the respondent or 

the highest ranking respondent occupies a position with Salary Grade 25 or above. 

3. The preventive suspension order, when proper, shall be approved in accordance 

with the immediately preceding section. 

4. Where the intelligence or fact-finding report recommends any action other than the 

conduct of preliminary investigation and/or administrative adjudication, the approval 

required in part (IV)(H)(2) above should likewise be obtained. 

I. Docketing of Cases 

The Board Chairman shall direct the Records Officer V of the Central Records Division to 

assign a Central Office docket number to the case which has been recommended for 

preliminary investigation and/or administrative adjudication. 

J. Assignment of Cases by Raffle 

1. Where the respondent or the highest ranking respondent has a Salary Grade not 

higher than 24, the Board Chairman, with the assistance of the IAB Administrative 

Officer, shall assign by raffle an lAB-IS investigator or constitute, also by raffle, an 

IAB-IS investigating team who shall conduct the preliminary investigation and/or 

administrative adjudication. 

2. Where the respondent or the highest ranking respondent occupies a position with 

Salary Grades 25 to 29, the IAB acting in a division of three, shall conduct the 

preliminary investigation and/or administrative adjudication; Provided, that the IAB 

division may avail of the assistance of the investigating staff; Provided, further, that 

the investigating staff who will assist the IAB division shall be selected by a majority 

vote of the members of the IAB Division. 

The assignment of cases to an IAB Division shall be done in the following manner: 

a. The IAB Chairman, with the assistance of the IAB Administrative Officer, shall 

first draw by raffle from among the qualified members of the IAB, the Team Leader of 

the First Division.


b. Thereafter, the two members of the First Division shall be drawn by raffle from 

among the remaining qualified IAB members. 

c. The remaining three (3) members of the IAB shall then constitute the Second 

Division, whose Team Leader shall be drawn by raffle conducted by the IAB Chairman, 

with the assistance of the IAB Administrative Officer. 

d. The Overall Deputy Ombudsman, however, shall automatically act as the Team 

Leader of whichever IAB Division he may belong. 

e. In no case shall the Deputy Ombudsman for the Visayas and the Deputy Ombudsman 

for Mindanao sit at the same time in one division. 

f. The first case filed with the IAB shall be assigned to the IAB First Division; while 

the next case shall then be assigned to the IAB Second Division. 

g. Thereafter, the IAB Chairman, with the assistance of the IAB Administrative 

Officer, shall conduct another round of raffle to determine the composition of the IAB 

Divisions which shall handle the subsequent cases flied with the IAB. 

h. The foregoing procedure shall be repeated after every two (2) cases that are 

referred to the IAB for preliminary investigation and/or administrative adjudication. 

i. Where the Team Leader or a member of a division is subsequently found to be 

disqualified or has voluntarily inhibited himself from participating in the proceeding, the 

IAB Chairman shall request the Ombudsman to designate a substitute from among the 

members of the other division. 

j. The presence of at least two members of an IAB Division is required to constitute 

a quorum. The vote of at least two members of a Division is required to pass a 

resolution or validate an act of the Division. 

3. Where the respondent or the highest ranking respondent is the Chairman, Vice-Chairman 

or member of the Board, the IAB en banc shall conduct the preliminary investigation 

and/or administrative adjudication; Provided, that the respondent member, 

Vice Chairman or Chairman shall automatically be disqualified from participating in 

the proceeding except as respondent; Provided, further, that the IAB may avail of 

the assistance of the Investigating Staff who shall be selected by a majority vote of 

the lAB en banc. 

The presence of a simple majority of the qualified IAB members shall constitute a quorum. 

The vote of a simple majority of all the qualified members of the IAB shall be required to 

pass a resolution or decision of the IAB en banc; Provided, however, that in case of a tie 

or lack of quorum for two (2) scheduled sessions of the IAB at which the matter is 

supposed to be taken up, the matter shall be deemed automatically submitted to the 

Ombudsman. 

K. Conduct of Preliminary Investigation and Administrative Adjudication 

Preliminary investigation and administrative adjudication shall be conducted within sixty 

(60) days from docketing of the complaint. Unless otherwise herein provided, the Rules 

and Regulations of the Office of the Ombudsman shall apply in all cases cognizable by the 

IAB. The recommended resolution or decision shall be submitted to the approving authority 

within thirty (30) days upon termination of the proceedings. 

L. Approval of Resolutions and Decisions

1582 


1. Resolutions and decisions on cases where the respondent or highest ranking 

respondent has a Salary Grade not higher than Salary Grade 24 shall be approved 

by the lAB en banc. The provision in part (IV)(J)(3) hereof on quorum and number 

of votes required to pass a resolution or decision of the lAB en banc shall be observed. 

2. Resolutions and decisions on cases where the respondent or highest ranking 

respondent occupies a position with Salary Grade 25 or above shall be submitted by 

the IAB to the Ombudsman for final action. 

M. Motion for Reconsideration 

A motion for reconsideration of any order, directive or decision of the Chairman, the lAB 

en banc or the Ombudsman, must be filed within five (5) days from receipt of a written 

notice thereof and may be entertained only on any of the following grounds: 

1. New evidence has been discovered which materially affects the order, directive or 

decision; or 

2. Serious errors of law or irregularities have been committed prejudicial to the interest 

of the movant. 

The motion for reconsideration shall be resolved within five (5) days from filing; Provided, 

that only one motion for reconsideration shall be entertained. 

Findings of fact of the Office of the Ombudsman, when supported by substantial evidence, 

shall be conclusive. Any order, directive or decision imposing the penalty of public 

censure, reprimand, suspension of not more than one month and/or forfeiture of not more 

than one-month salary, shall be final and unappealable. 

N. Disqualifications 

The Chairman, Vice Chairman or any member of the IAB, as well as any member of the 

IAB Investigating Staff, shall be automatically disqualified from acting on a complaint or 

participating in a proceeding under the following circumstances: 

1. He is a party to the complaint, either as a respondent or complainant; 

2. He belongs to the same component unit as any of the parties to the case; 

3. He belongs or belonged to the same component unit as any of the parties to the 

case during the period when the act complained of transpired; 

4. He is pecuniarily interested in the case or is related to any of the parties within the 

sixth degree of affinity or consanguinity, or to counsel within the fourth degree, 

computed according to the provisions of civil law; or 

5. He has, at one time or another, acted upon the matter subject of the complaint or 

proceeding. 

For purposes of this Administrative Order, the Overall Deputy Ombudsman shall be considered 

part of the Central Office. 

The Chairman, Vice-Chairman or any member of the lAB, as well as any member of the 

lAB-IS, may, in the exercise of his sound discretion, inhibit himself from acting on a 

complaint or participating in a proceeding for just and valid reasons other than those 

mentioned above.


Where the Chairman of the IAB is disqualified or has voluntarily inhibited himself from 

participating in a case, the Vice-Chairman of the IAB shall act in his stead. Where the 

Vice-Chairman of the IAB is also disqualified or has inhibited himself from participating in 

a case, the Ombudsman shall appoint an Acting Chairman from among the qualified 

members of the IAB. 

V. GENERAL PROVISIONS 

A. Separability Clause. If any provision of this Order is held unconstitutional or invalid, 

other provisions not affected thereby shall remain valid and binding. 

B. Modification of Existing Issuances. All issuances or provisions of any issuance of the 

Office of the Ombudsman which may be inconsistent with any of the provisions of this 

Order are hereby repealed or modified accordingly. 

C. Action on Cases Pending upon the Effectivity of this Order. All cases or complaints 

filed against or involving any official or employee of the Office of the Ombudsman, pending 

at any stage upon the effectivity of this Order, shall immediately be forwarded to the lAB 

Administrative Officer for transmittal to and for appropriate action of the IAB. 

D. Applicability of the Rules of Court. The provisions of the Rules of Court shall apply in a 

suppletory character, insofar as they are not inconsistent herewith and whenever practicable 

and convenient. 

E. Effectivity. This Order shall take effect after fifteen (15) days following the completion of 

its publication in the Official Gazette or in three (3) newspapers of general circulation in 

the Philippines, one of which is printed in the national language, and upon the filing with 

the University of the Philippines Law Center of three (3) certified copies thereof. 



(SGD.) SIMEON V. MARCELO 

Ombudsman 

óo0oó 

Administrative Order No. 07 , series of 1990 

Rules of Procedure of the Office of the Ombudsman 

Pursuant to the authority vested in the Office of the Ombudsman under Sections 18, 23 

and 27 of Republic Act No. 6770, otherwise known as the ìOmbudsman Act of 1989î, the 

following Rules of Procedure of the Office of the Ombudsman, are hereby prescribed and 

promulgated. 

Rule I 

Preliminary Provisions

1584 


Section 1. Title. These rules shall be known as the Rules of Procedure of the Office 

of the Ombudsman. 

Section 2. Coverage. These rules shall apply to all criminal and administrative complaints, 

grievances or requests for assistance and such other matters cognizable by the Office of the 

Ombudsman. 

Section 3. Form of Complaints, Grievances or Request for Assistance. Complaints 

may be in any form, either verbal or in writing. For a speedier disposition of the complaint, 

however, it is preferable that it be in writing and under oath. A complaint which does not 

disclose the identity of the complainant will be acted upon only if it merits appropriate 

consideration, or contains sufficient leads or particulars to enable the taking of further action. 

Grievances or requests for assistance may likewise be verbal or in writing. In any 

case, the requesting or complaining party must indicate his address and telephone number, 

if any. 

Rule II 

Procedure in Criminal Cases 

Section 1. Grounds. A criminal complaint may be brought for an offense in violation 

of R.A. 3019, as amended, R.A. 1379, as amended, R.A. 6713, Title VII, Chapter II, Section 

2 of the Revised Penal Code, and for such other offenses committed by public officers and 

employees in relation to office. 

Section 2. Evaluation. Upon evaluating the complaint, the investigating officer shall 

recommend whether it may be: 

a. dismissed outright for want of palpable merit; 

b. referred to respondent for comment; 

c. indorsed to the proper government office or agency which has jurisdiction over the case; 

d. forwarded to the appropriate office or official for fact-finding investigation; 

e. referred for administrative adjudication; or 

f. subjected to a preliminary investigation. 

Section 3. Preliminary Investigation; Who May Conduct. Preliminary investigation 

may be conducted by any of the following: 

1. Ombudsman Investigators; 

2. Special Prosecuting Officers; 

3. Deputized Prosecutors; 

4. Investigating Officials authorized by law to conduct preliminary investigations; or 

5. Lawyers in the government service, so designated by the Ombudsman. 

Section 4. Procedure. The preliminary investigation of cases falling under the jurisdiction 

of the Sandiganbayan and Regional Trial Court shall be conducted in the manner prescribed 

in Section 3, Rule 112 of the Rules of Court, subject to the following provisions: 

a) If the complaint is not under oath or is based only on official reports, the investigating 

officer shall require the complainant or supporting witnesses to execute affidavits to substantiate 

the complaints.


b) After such affidavits have been secured, the investigating officer shall issue an order, 

attaching thereto a copy of the affidavits and other supporting documents, directing the 

respondent to submit, within ten (10) days from receipt thereof, his counter-affidavits and 

controverting evidence with proof of service thereof on the complainant. The complainant 

may file reply affidavits within ten (10) days after service of the counter-affidavits. 

c) If the respondent does not file a counter-affidavit, the investigating officer may consider 

the comment filed by him, if any, as his answer to the complaint. In any event, the 

respondent shall have access to the evidence on record. 

d) No motion to dismiss shall be allowed except for lack of jurisdiction. Neither may a motion 

for a bill of particulars be entertained. If respondent desires any matter in the complainantís 

affidavit to be clarified, the particularization thereof may be done at the time of clarificatory 

questioning in the manner provided in paragraph (f) of this section. 

e) If the respondent cannot be served with the order mentioned in paragraph 6 hereof, or 

having been served, does not comply therewith, the complaint shall be deemed submitted 

for resolution on the basis of the evidence on the record. 

f) If, after the filing of the requisite affidavits and their supporting evidences, there are facts 

material to the case which the investigating officer may need to be clarified on, he may 

conduct a clarificatory hearing during which the parties shall be afforded the opportunity 

to be present but without the right to examine or cross-examine the witness being questioned. 

Where the appearance of the parties or witnesses is impracticable, the clarificatory 

questioning may be conducted in writing, whereby the questions desired to be asked by 

the investigating officer or a party shall be reduced into writing and served on the witness 

concerned who shall be required to answer the same in writing and under oath. 

g) Upon the termination of the preliminary investigation, the investigating officer shall forward 

the records of the case together with his resolution to the designated authorities for 

their appropriate action thereon. 

No information may be filed and no complaint may be dismissed without the written 

authority or approval of the Ombudsman in cases falling within the jurisdiction of the 

Sandiganbayan, or of the proper Deputy Ombudsman in all other cases. 

Section 5. Cases Falling Under the Jurisdiction of Municipal Trial Courts. Cases 

falling under the jurisdiction of the Office of the Ombudsman which are cognizable by Municipal 

Trial Courts, including those subject to the Rule on Summary Procedure may only be filed in 

court by information approved by the Ombudsman or the proper Deputy Ombudsman. 

Section 6. Notice to Parties. The partied shall be served with a copy of the resolution 

as finally approved by the Ombudsman or by the proper Deputy Ombudsman. 

Section 7. Motion for Reconsideration. 

a. Only one motion for reconsideration or reinvestigation of an approved order or resolution 

shall be allowed, the same to be filed within fifteen (15) days from notice thereof with the 

Office of the Ombudsman, or the Deputy Ombudsman as the case may be.

1586 


b. No motion for reconsideration or reinvestigation shall be entertained after the information 

shall have been filed in court, except upon order of the court wherein the case was filed. 

Rule III 

Procedure in Administrative Cases 

Section 1. Grounds for Administrative Complaint. An administrative complaint may 

be filed for acts or omissions, including but not limited to the following: 

a. contrary to law or regulations; 

b. unreasonable, unfair, oppressive or discriminating; 

c. inconsistent with the general course of agencyís functions though in accordance with 

law; 

d. on a mistake of law or an arbitrary ascertainment of facts; 

e. in the exercise of discretionary powers but for an improper purpose; 

f. otherwise irregular, immoral or devoid of justification; 

g. due to any delay or refusal to comply with the referral or directive of the Ombudsman or 

any of his deputies against the officer or employee to whom it was addressed; and 

h. such other grounds provided for under PD 807, RA 6713 and other applicable laws. 

Section 2. Public Officers Covered; Exceptions. All elective and appointive officials 

of the government and its subdivisions, instrumentalities and agencies, including Members of 

the Cabinet, local governments, government-owned or controlled corporations and their 

subsidiaries are subject to the disciplinary authority of the Office of the Ombudsman. 

Excepted from the foregoing are Members of Congress, the Judiciary, and officials 

removable only by impeachment; provided, however, that the Office of the Ombudsman may 

investigate any serious misconduct in office allegedly committed by officials removable only 

by impeachment, for the purpose of filing a verified complaint for impeachment, if warranted. 

Section 3. How Initiated. An administrative case may be initiated by a written complaint 

under oath accompanied by affidavits of witnesses and other evidences in support of the 

charge. An administrative proceeding may also be ordered by the Ombudsman or the 

respective Deputy Ombudsman on his initiative or on the basis of a complaint originally filed 

as a criminal action or a grievance complaint or request for assistance. 

Section 4. Evaluation. Upon receipt of the complaint, the same shall be evaluated to 

determine whether the same may be: 

a. dismissed outright for any of the grounds stated under Section 20 of R.A. No. 6770; 

b. referred to other disciplinary authorities under paragraph 2, Section 23, R.A. No. 6770 

for the taking of appropriate administrative proceedings; or 

c. the subject of administrative adjudication by the Office of the Ombudsman. 

Section 5. Administrative Adjudication; How Conducted. 

a. If the complaint is not dismissed for any of the causes enumerated in Section 20 of 

Republic Act No. 6770, the respondent shall be furnished with copy of the affidavits and 

other evidences submitted by the complainant, and shall be ordered to file his counteraffidavits 

and other evidences in support of his defense, within ten (10) days from receipt


thereof, together with proof of service of the same on the complainant who may file reply 

affidavits within ten (10) days from receipt of the counter-affidavits of the respondent. 

b. If, on the basis of the affidavits and other evidences submitted by the parties, the investigating 

officer finds no sufficient cause to warrant further proceedings, the complaint may 

be dismissed. Otherwise he shall summon the parties to a preliminary conference to 

consider the following matters: 

1. Whether the parties desire a formal investigation or are willing to submit the case for 

resolution on the basis of the evidence on record and such other evidences they will 

present at such conference; 

2. Should the parties desire a formal investigation to determine the nature of the charge, 

stipulation of facts, a definition of the issues, identification and marking of exhibits, 

limitation of witnesses, and such other matters as would expedite the proceedings; 

c. After the preliminary conference, the investigating officer shall issue an order reciting the 

matters taken up during the conference, including the facts stipulated, the evidences 

marked and the issues involved. The contents of this order may not be deviated from 

unless amended to prevent manifest injustice. 

d. Should a hearing be conducted, the parties shall be notified at least five (5) days before 

the date thereof. Failure of any or both of the parties to appear at the hearing is not 

necessarily a cause for the dismissal of the complaint. A party who appears may be 

allowed to present his evidence in the absence of the adverse party who was duly notified 

of the hearing. 

e. Only witnesses who have submitted affidavits served on the adverse party at least five (5) 

days before the date of his being presented as a witness may be allowed to testify at the 

hearing. The affidavit of any witness shall constitute his direct testimony, subject to crossexamination, 

re-direct examination and re-cross-examination. 

f. The parties shall be allowed the assistance of counsel and the right to the production of 

evidence through the compulsory process of subpoena and subpoena duces tecum; 

Section 6. Rendition of Decision. Not later than thirty (30) days after the termination 

of the hearing, the investigating officer shall submit a resolution containing his findings and 

recommendation for the approval of the Ombudsman. Once approved, the said resolution 

shall constitute the decision in the case. Copy thereof shall be served upon the parties and 

the head of the office or agency of which the respondent is an official or employee for his 

information and compliance with any directive contained therein. 

Section 7. Finality of Decision. Where the respondent is absolved of the charge, and 

in case of conviction where the penalty imposed is public censure or reprimand, suspension 

of not more than one month, or a fine equivalent to one month salary, the decision shall be 

final and unappealable. In all other cases, the decision shall become final after the expiration 

of ten (10) days from receipt thereof by the respondent, unless a motion for reconsideration 

or petition for certiorari shall have been filed by him as prescribed in Section 27 of RA 6770. 

Section 8. Motion for Reconsideration or Reinvestigation; Grounds. Whenever 

allowable, a motion for reconsideration or reinvestigation may only be entertained if filed

1588 


within ten (10) days from receipt of the decision by the respondent on any of the following 

grounds: 

a. New evidence had been discovered which materially affects the order, directive or decision; 

b. Errors of facts or law or irregularities have been committed prejudicial to the interest of 

the movant. 

Only one motion for reconsideration or reinvestigation shall be allowed, and the hearing 

officer shall resolve the same within five (5) days from receipt thereof. 

Section 9. Preventive Suspension. Pending investigation, the respondent may be 

preventively suspended without pay for a period of not more that six (6) months if, in the 

judgment of the Ombudsman or his proper deputy, the evidence of guilt is strong, and (a) the 

charge against such officer or employee involves dishonesty, oppression or gross misconduct, 

or neglect in the performance of duty; or (b) the charge would warrant removal from the 

service; or (c) the respondentís continued stay in office may prejudice the case filed against 

him. 

If the administrative investigation is not terminated within the period the respondent is 

suspended, the respondent shall be automatically reinstated unless the delay in the disposition 

of the case is due to the fault, negligence, or any cause attributable to the respondent, in 

which case the period of such delay shall not be counted in computing the period of 

suspension. 

Section 10. Penalties. (a) In administrative proceedings conducted under P.D. No. 

807 by agencies or offices other than the Office of the Ombudsman, the penalties under said 

law shall be imposed; (b) In administrative proceedings conducted under these Rules, the 

Office of the Ombudsman may impose a penalty ranging from suspension without pay for 

one year to dismissal with forfeiture of benefits or a fine ranging from five thousand (P5,000.00) 

pesos to twice the amount malversed, illegally taken, or lost, or both at the discretion of the 

Ombudsman, taking into consideration circumstances that mitigate or aggravate the liability 

of the officer or employee found guilty of the complaint or charge. 

This is without prejudice to the authority of the Ombudsman to exercise his authority 

under Section 15, paragraph (3) of R.A. No. 6770. 

Rule IV 

Procedure in Grievances/Request for Assistance 

Section 1. Grievance or Request for Assistance; Nature Of. A grievance or request 

for assistance may consist of a complaint or request seeking redress or relief concerning an 

act or omission of a public official or employee, office or agency alleged to be unreasonable, 

unfair, oppressive, discriminatory, improper or inefficient, and which does not necessarily 

amount to a criminal or administrative offense. 

Section 2. By Whom Handled. Grievance or request for assistance shall be acted 

upon by the Public Assistance Office in the Central Office of the Ombudsman, or in the 

Office of the respective Deputy Ombudsman.


Section 3. Action Thereon. A grievance or request for assistance shall be acted 

immediately upon receipt. 

a. Where the grievance or request for assistance appears to be manifestly frivolous, vexatious, 

or made in bad faith, or where it involves a matter purely between private parties, the 

same may be dismissed outright and the complainant/requesting party informed of the 

reasons for such dismissal; 

b. Where the redress, relief or assistance sought may be acted upon by another office, the 

same may be referred to the office concerned, with the Public Assistance Office following 

it up in behalf of the complainant; 

c. In all other cases which the Office of the Ombudsman may take cognizance of, the 

procedure in the following section shall be observed. 

Section 4. Procedure. 

a. If the grievance or request is relatively simple and/or requires immediate action, the same 

may be acted upon by telegram, telephone, or other means of communication or given 

personal attention by going to the office or agency concerned. 

b. Whenever deemed necessary or advisable, a copy of the grievance or request for assistance, 

together with pertinent documents shall be sent to the public official, employee or 

agency concerned, copy furnished its head and the Resident Ombudsman, if any, for the 

taking of immediate remedial action; or, if the relief requested may not be complied with, 

to submit a written explanation therefor. 

c. If such explanation is found satisfactory, and/or appropriate action had already been 

taken on the grievance or request, the same shall be dismissed and the parties informed 

accordingly. 

d. The Public Assistance Office may arrange a conference between the complainant/requesting 

party, and the public official concerned with a view to a satisfactory and expeditious 

resolution of the grievance/request. 

e. Upon consideration of the facts or information gathered, a resolution on the grievance or 

request shall be made within two (2) days of which the parties shall be notified, and 

appropriate steps taken to ensure compliance therewith. 

Section 5. Effect of Non-Compliance. Any delay or refusal to comply with the referral 

of directive of the Ombudsman or any of the Deputies shall constitute a ground for administrative 

disciplinary action against the officer or employee to whom it as addressed pursuant to 

Section 26, paragraph (4) of R.A. No. 6770. 

Rule V 


Section 1. Immunity from Prosecution. 

a. Any person whose testimony or production of documents or other evidence is necessary 

to determine the truth in any inquiry, hearing, or proceeding being conducted by the 

Office of the Ombudsman or under its authority in the performance or furthermore of its 

constitutional functions and statutory objectives, including preliminary investigation, may 

be granted immunity from criminal prosecution by the Ombudsman, upon such terms and 

conditions as the Ombudsman may determine, taking into account the pertinent provisions 

of the Rules of Court.

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Such immunity may be granted upon application of the concerned party, the investigating, 

hearing, or prosecuting officer, or at the instance of the Ombudsman. Provided, 

however, that in all cases, the concerned party shall execute an affidavit reciting the 

substance of his proposed testimony and/or the nature of the evidence in his possession. 

b. In all hearings, inquiries, and proceedings of the Office of the Ombudsman, including 

preliminary investigation of offenses, no person subpoenaed to testify as a witness shall 

be excused from attending and testifying or from producing books, papers, correspondence, 

memoranda and/or other records on the ground that the testimony or evidence, 

documentary or otherwise, required of him may tend to incriminate him or subject him to 

prosecution: Provided, that no person shall be prosecuted criminally for or on account of 

any matter, concerning which he is compelled to testify and produce evidence, after 

having claimed the privilege against self-incrimination. 

c. The grant of immunity from criminal prosecution under the preceding paragraphs may be 

revoked upon proper notice in the event that the person granted immunity subsequently 

retracts his statement, or fails or refuses to testify or produce evidence in court in accordance 

with the sworn statement upon which his immunity was granted. 

Neither shall such grant of immunity exempt the party concerned from criminal 

prosecution for perjury or false testimony, nor shall he be exempt from demotion or removal 

from office. 

Section 2. Public Disclosure; Exemption. When circumstances so warrant and with 

due prudence, the Office of the Ombudsman may publicize in a fair and balanced manner 

the filing of a complaint, grievance, or request for assistance, and the final resolution, decision 

or action taken thereon: Provided, however, that prior to such final action, no publicity shall 

be made of matters which may adversely affect national security or public interest, prejudice 

the safety of witnesses or the disposition of the case, or unduly expose persons complained 

against to ridicule or public censure. 

Section 3. Rules of Court, Application. In all matters not provided in these rules, the 

Rules of Court shall apply in a suppletory character, or by analogy whenever practicable and 

convenient. 

Section 4. Effectivity. These rules shall take effect following the completion of their 

publication in the Official Gazette or in three (3) newspapers of general circulation in the 

Philippines, one of which is printed in the national language. 

They shall govern all cases brought after they take affect and to further proceedings in 

cases then pending, except to the extent that their application would not be feasible or would 

cause injustice to any party. 

Section 5. Separability Clause. If any provision of these rules is held unconstitutional, 

other provisions not affected thereby shall remain valid and binding. 

Adopted: 10 April 1990 

(SGD.) CONRADO M. VASQUEZ 

Ombudsman 

óo0oó




Amendment of Section 7, Rule II, Administrative Order No. 07 

WHEREAS, Section 7, Rule II, Administrative Order No. 07, as amended by 

Administrative Order No. 09, on preliminary investigations allows the filing of one motion for 

reconsideration or reinvestigation of an approved order or resolution within the inextendible 

period of five (5) days from notice. 

WHEREAS, Section 7, Rule II, Administrative Order No. 07, as amended, has its basis 

on Section 27, R.A. No. 6770 (Ombudsman Act of 1989), which provides that ìA motion for 

reconsideration of any order, directive or decision of the Office of the Ombudsman must 

be filed within five (5) days after receipt of written notice. x x x. The above rules may be 

amended or modified by the Office of the Ombudsman as the interest of justice may 

require.î (Emphasis ours) 

WHEREAS, on the matter of appeals from the resolution of prosecutors in the National 

Prosecution Service, Section 9 of the 2000 NPS RULE ON APPEAL (Department Circular 

No. 70 dated July 3, 2000) of the Department of Justice (DOJ), consistent with the Rules of 

Criminal Procedure, provides that ëthe appeal shall not hold the filing of the corresponding 

information in court on the basis of the finding of probable cause in the appealed resolution.î 

WHEREAS, equity and uniformity in the administration of justice require the observance 

in Ombudsman criminal cases of the same rule on the immediate filing of the information in 

court upon the finding of probable cause in the resolution, without removing from the accused 

his privilege to file a motion for reconsideration/reinvestigation upon proper leave of court. 

WHEREAS, the records of the courts, particularly the Sandiganbayan, show a high 

incidence of flight from justice among parties against whom probable cause had been found. 

WHEREFORE, pursuant to the above-quoted Section 27, R.A. No. 6670, in the interest 

of justice, Section 7, Rule II, Administrative Order No. 07 is hereby amended as follows: 

ìSection 7. Motion for Reconsideration. ñ 

a) Only one motion for reconsideration or reinvestigation of an approved order or 

resolution shall be allowed, the same to be filed within five (5) days from notice 

thereof with the Office of the Ombudsman, or the proper Deputy Ombudsman as 

the case may be, with corresponding leave of court in cases where the information 

has already been filed in court. 

b) The filing of a motion for reconsideration/reinvestigation shall not bar the filing 

of the corresponding information in Court on the basis of the finding of probable 

cause in the resolution subject of the motion.î 

This Administrative Order shall take effect upon publication in a newspaper of general 

circulation in the Philippines.

1592 


Adopted: 16 Feb. 2001 


(SGD.) ANIANO A. DESIERTO 

Ombudsman 

óo0oó 

Administrative Order No. 13, s. 1996 

Guidelines in the Handling and Prosecution of Ombudsman 

Cases Filed With or Pending Before Regular Courts Pursuant 

to the Provisions of Republic Act No. 7975 

Pursuant to the authority vested in the Office of the Ombudsman under Sections 18, 23 

and 27 of Republic Act No. 6770, otherwise known as the Ombudsman Act of 1989, the 

following guidelines are hereby promulgated:†††† 

A. Reinvestigation 

1. All Petitions/Motions for Reinvestigation of cases already filed in court shall not be 

entertained and the same shall, instead, be addressed to the court trying the case. 

2. Where the trial court orders/directs the conduct of reinvestigation proceedings, the 

same shall be undertaken by the prosecutor assigned to prosecute the case in court 

and shall, as far as practicable, be limited to the reception and evaluation of such 

evidence as the accused may deem fit to present for the purpose of overturning the 

finding of probable cause arrived at during the inquest or preliminary investigation 

proceedings; without prejudice, however, to the right of the complainant/offended 

party to be notified of such proceedings and to submit, in appropriate cases, proof 

in contravention of the evidence adduced by the accused. 

3. Resolutions of the reinvestigating prosecutor as well as review resolutions of the city/ 

provincial prosecutor recommending: 

a) Dismissal of the case; or 

b) Withdrawal of the complaint or information filed in court; or 

c) Substantial amendments to the complaint or information such as, but not limited 

to: 

1) charging an offense different from or lesser than that originally charged; 

or 

2) downgrading the degree of participation of an accused; or 

3) excluding an accused from the original complaint or information; or 

4) including other persons as additional accused.


shall be subject to the approval of the Ombudsman or his Deputies, as the case may 

be, and††no motion praying for such dismissal, withdrawal or amendment of the 

original complaint or information shall be filed in court without the prior written 

approval of the Ombudsman or his Deputies. 

4. Resolutions of the reinvestigating prosecutor recommending the remand of the case 

to the trial court for further proceedings under the original complaint or information, 

concurred in or approved by the city/provincial prosecutor, as well as resolutions of 

city/provincial prosecutors disapproving recommendations of their assistants for the 

dismissal, withdrawal or amendment of the original complaint or information, need 

not be submitted to the Office of the Ombudsman for further action. 

B. Plea Bargaining 

1. City/Provincial Prosecutors are authorized to approve plea bargaining agreements 

entered into, concurred in or consented to by the prosecutors under them in all 

cases where the penalty to be imposed on the accused as a result of the plea 

bargaining is lower by not more than one degree than that prescribed by law for the 

offense charged in the complaint or information: 

2. No plea bargaining agreement entailing: 

a) The imposition of a penalty lower by more than one degree from that prescribed 

by law for the offense charged in the complaint or information; or 

b) The imposition of a penalty different in nature from that prescribed by law for the 

offense charged in the complaint or information; or 

c) The dismissal of other charges filed or pending in court against the same accused 

shall be entered into, concurred in or consented to by the city/provincial prosecutors 

and their assistants without the prior written approval of the Ombudsman or his 

Deputies. 

C. Procedural Matters 

1. In cases falling under the provisions of paragraph A-3 hereinabove, the following 

documents shall be transmitted to the Office of the Ombudsman or his Deputies: 

a) The records of the reinvestigation proceedings; 

b) The original and a copy of the resolution/recommendation of the reinvestigating 

prosecutor; 

c) The original and a copy of the motion for dismissal, withdrawal or amendment, 

as the case may be, of the original complaint or information, duly signed by the 

reinvestigating prosecutor. 

2. In cases falling under the provisions of paragraph B-2 herein above, the following 

documents shall be transmitted to the Office of the Ombudsman or his Deputies: 

a) The written offer of the accused to enter into a plea bargaining agreement;

1594 


b) The recommendation of the trial prosecutor stating, among others, the reason(s) 

justifying the acceptance of the offer of the accused; 

c) The original and a copy of the manifestation of consent to the plea bargaining 

offer of the accused, duly signed by the trial prosecutor and the offended party and the 

latterís counsel, if any. 

D. Motions for Suspension 

1. Pursuant to the provisions of Section 13 of Republic Act No. 3019, as amended, 

otherwise known as the ìAnti-Graft and Corrupt Practices Act,î any incumbent public 

officer against whom any valid criminal information has been filed in court for: 

a) Violations of Republic Act No. 3019, as amended; 

b) Offenses defined and penalized under Title 7, Book II of the Revised Penal 

Code; 

c) Any offense involving fraud upon government or public funds or property penalized 

under the Revised Penal Code and other special laws such as, but not limited to, 

falsification and bribery or malversation, 

whether as a simple or as a complex offense and in whatever stage of execution and 

mode of participation, is pending in court, shall be suspended from office. 

2. For purposes of complying with the foregoing provision of law, trial prosecutors 

shall, immediately upon filing of the information, file with the trial court the 

corresponding Motion for Suspension of the accused from office. 

E. Repealing Clause. All previous Orders, Rules and Procedures inconsistent with this 

Administrative Order are repealed or modified accordingly. 

F. Effectivity. This Administrative Order shall take effect fifteen (15) days after its 

publication in a newspaper of general circulation. 


Adopted: 7 Feb. 1996. 


(SGD.) ANIANO A. DESIERTO 

Ombudsman 

óo0oó 


Amendment of Rule III, Administrative Order No. 07 

Rule III, Administrative Order No. 07 of this Office is hereby amended, to read as 

follows:


ìRule III 

PROCEDURE IN ADMINISTRATIVE CASES 

Section 1. Grounds for administrative complaint - An administrative complaint may be 

filed for acts or omissions which are: 

a. contrary to law or regulations; 

b. unreasonable, unfair, oppressive or discriminatory; 

c. inconsistent with the general course of an agencyís functions though in accordance with 

law; 

d. based on a mistake of law or an arbitrary ascertainment of facts; 

e. in the exercise of discretionary powers but for an improper purpose; 

f. otherwise irregular, immoral or devoid of justification; 

g. due to any delay or refusal to comply with the referral or directive of the Ombudsman or 

any of his deputies against the officer or employee to whom it was addressed; and 

h. such other grounds provided for under E.O. No. 292 and other applicable laws. 

Section 2. Public officers covered; exceptions - All elective and appointive officials of 

the government and its subdivisions, instrumentalities and agencies, including Members of 

the Cabinet, local governments, government-owned or controlled corporations and their 

subsidiaries are subject to the disciplinary authority of the Office of the Ombudsman. 

Excepted from the foregoing are Members of Congress, the Judiciary, and officials 

removable only by impeachment; provided, however, that the Office of the Ombudsman may 

investigate any serious misconduct in office allegedly committed by officials removable by 

impeachment for the purpose of filing a verified complaint for impeachment, if warranted. 

Section 3. How initiated - An administrative case may be initiated by a written complaint 

under oath accompanied by affidavits of witnesses and other evidence in support of the 

charge. Such complaint shall be accompanied by a Certificate of Non-Forum Shopping 

duly subscribed and sworn to by the complainant or his counsel. An administrative 

proceeding may also be ordered by the Ombudsman or the respective Deputy Ombudsman 

on his initiative or on the basis of a complaint originally filed as a criminal action or a 

grievance complaint or request for assistance. 

Section 4. Evaluation - Upon receipt of the complaint, the same shall be evaluated to 

determine whether the same may be: 

a) dismissed outright for any of the grounds stated under Section 20 of Republic Act No. 

6770, provided, however, that the dismissal thereof is not mandatory and shall be 

discretionary on the part of the Ombudsman or the Deputy Ombudsman concerned; 

b) treated as a grievance/request for assistance which may be referred to the Public 

Assistance Bureau, this Office, for appropriate action under Section 2, Rule IV of 

this Rules; 

c) referred to other disciplinary authorities under paragraph 2, Section 23, RA 6770 for the 

taking of appropriate administrative proceedings;


d) referred to the appropriate office/agency or official for the conduct of further fact-finding 

investigation; or 

e) docketed as an administrative case for the purpose of administrative adjudication by 

the Office of the Ombudsman. 

Section 5. Administrative adjudication; how conducted ñ 

a) If the complaint is docketed as an administrative case, the respondent shall be furnished 

with a copy of the affidavits and other evidence submitted by the complainant, and 

shall be ordered to file his counter-affidavit and other evidence in support of his defense, 

within 10 days from receipt thereof, together with proof of service of the same on the 

complainant who may file his reply-affidavit within ten (10) days from receipt of the counteraffidavit 

of the respondent. 

b) If the hearing officer finds no sufficient cause to warrant further proceedings on the basis 

of the affidavits and other evidence submitted by the parties, the complaint may be dismissed. 

Otherwise, he shall issue an Order (or Orders) for any of the following purposes: 

1. To direct the parties to file, within ten (10) days from receipt of the Order, 

their respective verified position papers. The position papers shall contain 

only those charges, defenses and other claims contained in the affidavits and 

pleadings filed by the parties. Any additional relevant affidavits and/or 

documentary evidence may be attached by the parties to their position papers. 

On the basis of the position papers, affidavits and other pleadings filed, the 

Hearing Officer may consider the case submitted for resolution. 

2. If the Hearing Officer decides not to consider the case submitted for resolution 

after the filing of the position papers, affidavits and pleadings, to conduct a 

clarificatory hearing regarding facts material to the case as appearing in the 

respective position papers, affidavits and pleadings filed by the parties. At 

this stage, he may, at his discretion and for the purpose of determining whether 

there is a need for a formal trial or hearing, ask clarificatory questions to 

further elicit facts or information; 

In the conduct of clarificatory hearings, the parties shall be afforded the 

opportunity to be present but without the right to examine or cross-examine 

the party/witness being questioned. The parties may be allowed to raise 

clarificatory questions and elicit answers from the opposing party/witness, 

which shall be coursed through the Hearing Officer who shall determine whether 

or not the proposed questions are necessary and relevant. In such cases, the 

Hearing Officer shall ask the question in such manner and phrasing as he may 

deem appropriate; 

3. If the Hearing Officer finds no necessity for further proceedings on the basis 

of the clarificatory hearings, affidavits, pleadings and position papers filed by 

the parties, he shall issue an Order declaring the case submitted for resolution. 

The Hearing Officer may also require the parties to simultaneously submit,


within ten (10) days from receipt of the Order, their Reply Position Papers. 

The parties, if new affidavits and/or exhibits are attached to the other partyís 

Position Paper, may submit only rebutting evidence with their Reply Position 

Papers. 

4. If the Hearing Officer finds the need to conduct a formal investigation on the 

basis of the clarificatory hearings, pleadings, affidavits and the position papers 

filed by the parties, an Order shall be issued for the purpose. In the same 

Order, the parties shall be required to file within ten (10) days from receipt of 

the Order their respective pre-trial briefs which shall contain, among others, 

the nature of the charge(s) and defenses, proposed stipulation of facts, a 

definition of the issues, identification and marking of exhibits, limitation of 

witnesses, and such other matters as would expedite the proceedings. The 

parties are not allowed to introduce matters in the pre-trial briefs which are 

not covered by the position papers, affidavits and pleadings filed and served 

prior to issuance of the Order directing the conduct of a formal investigation. 

c. The conduct of formal proceedings by the Office of the Ombudsman in administrative 

cases shall be non-litigious in nature. Subject to the requirements of due process 

in administrative cases, the technicalities of law, procedure and evidence 

shall not strictly apply thereto. The Hearing Officer may avail himself of all reasonable 

means to ascertain speedily the facts of the case. He shall take full control of 

the proceedings, with proper regard to the right of the parties to due process, and 

shall limit the presentation of evidence to matters relevant to the issue(s) before 

him and necessary for a just and speedy disposition of the case. 

d. In the conduct of formal administrative investigation, the Hearing Officer shall set 

the case for continuous trial. The parties shall be notified at least ten (10) days before 

the date of the initial hearing. Failure of any or both of the parties to appear at the 

scheduled hearing(s) is not necessarily a cause for the dismissal of the complaint. A 

party who appears may be allowed to present his evidence in the absence of the adverse 

party who was duly notified of the hearing; however, if the absent party is able to show 

that there is a valid cause for his absence, he shall be afforded the opportunity to 

cross-examine the witness(es) presented during his absence. In case of two (2) 

successive unjustified non-appearances of any party in the proceedings, it shall be 

the option of the party who is present to submit the case for resolution on the 

basis of the records of the case and the evidence so far presented; 

e. Only witnesses whose affidavits have been submitted by the parties and served on 

the adverse party prior to the issuance of the Order directing the conduct of a 

formal investigation may be allowed to testify at the hearing. The affidavit of any witness 

shall constitute his direct testimony, subject to cross-examination, re-direct examination 

and re-cross examination. Unless the testimony of the witness involves newly discovered 

evidence, the Hearing Officer may not allow the presentation of witnesses 

whose affidavits have not been filed by the parties and served on the adverse party 

prior to the issuance of the Order to conduct formal investigation. If a witness 

whose testimony involves newly discovered evidence is allowed to testify, the adverse 

party shall have the right to cross-examine such witness and to submit 

rebuttal evidence, if any, relevant to said newly discovered evidence;

1598 


f. The parties shall be allowed the assistance of counsel and the right to the production of 

evidence through the compulsory process of subpoena ad testificandum and subpoena 

duces tecum; 

g. The following pleadings shall be deemed prohibited in the cases covered by these 

Rules: 

1. Motion to dismiss, although any ground justifying the dismissal of the case 

may be discussed in the counter-affidavit/pleadings of the party; 

2. Motion for bill of particulars; and 

3. Dilatory motions including, but not limited to, motions for extension of time, 

for postponement, second motions for reconsideration and/or re-investigation. 

Said pleadings shall be stricken off the records of the case. 

Section 6. Rendition of decision - Not later than thirty (30) days after the case is 

declared submitted for resolution, the Hearing Officer shall submit a proposed decision 

containing his findings and recommendation for the approval of the Ombudsman. Said 

proposed decision shall be reviewed by the Directors, Assistant Ombudsmen and 

Deputy Ombudsmen concerned. With respect to low ranking public officials, the Deputy 

Ombudsman concerned shall be the approving authority. Upon approval, copies thereof 

shall be served upon the parties and the head of the office or agency of which the respondent 

is an official or employee for his information and compliance with the appropriate directive 

contained therein. 

Section 7. Finality and Execution of Decision - Where the respondent is absolved 

of the charge, and in case of conviction where the penalty imposed is public censure 

or reprimand, suspension of not more than one month, or a fine equivalent to one 

month salary, the decision shall be final, executory and unappealable. In all other 

cases, the decision may be appealed to the Court of Appeals on a verified petition for 

review under the requirements and conditions set forth in Rule 43 of the Rules of 

Court, within fifteen (15) days from receipt of the written Notice of the Decision or 

Order denying the Motion for Reconsideration. 

An appeal shall not stop the decision from being executory. In case the penalty 

is suspension or removal and the respondent wins such appeal, he shall be considered 

as having been under preventive suspension and shall be paid the salary and such 

other emoluments that he did not receive by reason of the suspension or removal. 

A decision of the Office of the Ombudsman in administrative cases shall be 

executed as a matter of course. The Office of the Ombudsman shall ensure that the 

decision shall be strictly enforced and properly implemented. The refusal or failure by 

any officer without just cause to comply with an order of the Office of the Ombudsman 

to remove, suspend, demote, fine, or censure shall be a ground for disciplinary action 

against said officer. 

Section 8. Motion for reconsideration or reinvestigation; Grounds - Whenever allowable, 

a motion for reconsideration or reinvestigation may only be entertained if filed within ten (10) 

days from receipt of the decision or order by the party on the basis of the following grounds: 

a. New evidence had been discovered which materially affects the order, directive or decision;


b. Grave errors of facts or laws or serious irregularities have been committed prejudicial to 

the interest of the movant. 

Only one motion for reconsideration or reinvestigation shall be allowed, and the Hearing 

Officer shall resolve the same within five (5) days from the date of submission for 

resolution. 

Section 9. Preventive suspension - Pending investigation, the respondent may be 

preventively suspended without pay if, in the judgment of the Ombudsman or his proper 

deputy, the evidence of guilt is strong, and (a) the charge against such officer or employee 

involves dishonesty, oppression or gross misconduct, or gross neglect in the performance of 

duty; or (b) the charge would warrant removal from the service; or (c) the respondentís 

continued stay in office may prejudice the just, fair and independent disposition of the 

case filed against him. 

The preventive suspension shall continue until the case is terminated; however, 

the total period of preventive suspension should not exceed six months. Nevertheless, 

when the delay in the disposition of the case is due to the fault, negligence or any 

cause attributable to the respondent, the period of such delay shall not be counted in 

computing the period of suspension herein provided. 

Section 10. Penalties - (a) For administrative charges under Executive Order No. 292 

or such other executive orders, laws or rules under which the respondent is charged, 

the penalties provided thereat shall be imposed by the Office of the Ombudsman; (b) 

in administrative proceedings conducted under these Rules, the Office of the Ombudsman 

may impose the penalty of reprimand, suspension without pay for a minimum period of 

one (1) month up to a maximum period of one (1) year, demotion, dismissal from the 

service, or a fine equivalent to his salary for one (1) month up to one (1) year, or from 

Five Thousand Pesos (P5,000.00) to twice the amount malversed, illegally taken, or lost, or 

both at the discretion of the Ombudsman, taking into consideration circumstances that mitigate 

or aggravate the liability of the officer or employee found guilty of the complaint or charge. 

The penalty of dismissal from the service shall carry with it that of cancellation of 

eligibility, forfeiture of retirement benefits, and the perpetual disqualification for reemployment 

in the government service, unless otherwise provided in the decision. 

This is without prejudice to the exercise of authority of the Ombudsman under Section 

15, paragraph (3) of RA 6770.î 

This Order shall take effect after fifteen (15) days following the completion of its publication 

in the Official Gazette and upon filing with the University of the Philippines Law Center of 

three (3) certified copies thereof. 

Adopted: 15 Sept. 2003. 

(SGD.) SIMEON V. MARCELO 

Tanodbayan 

(Ombudsman)

1600 


OVERSEAS WORKERS WELFARE ADMINISTRATION 


Memorandum Of Instructions No. 007, s. 2003 

Upgrading of Landbased and Seabased Workers Benefits Under 

the OWWA Self-Insurance Coverage Program (SICP) 

Pursuant to the Agencyís commitment to continuing program development towards 

provision of superior benefit package to OFW members, and as approved by the Board of 

Trustees through Board Resolution No. 027, Series of 2003, the benefits under the Self- 

Insurance Coverage Program (SICP) is hereby upgraded as follows: 

I. Upgraded Benefits 

A. Death Benefit 

Deaths due to 

Workerís Category Natural Cause Accident 

LANDBASED From P 70,000.00 P120,000.00 

To P100,000.00 P200,000.00 

SEABASED From P 45,000.00 P 70,000.00 

To P100,000.00 P200,000.00 

Annex A 

REVISED SCHEDULE OF DISABILITY/DISMEMBERMENT BENEFITS 

Disability or Dismemberment for both landbased and seabased workers caused by 

accident, as well as those supervening but not immediately apparent at the time of the 

accident, if discovered within 90 days from the date of accident, shall be compensable 

based on the following schedule: 

EXTENT OF DISABILITY/DISMEMBERMENT AMOUNT OF COVERAGE 

1. Total and Permanent Disability from Engaging 

in or Attending to Employment or Occupation Php50,000.00 

of Any Kind and Every Kind 

Total and Permanent Loss of Sight in Both Eyes 50,000.00 

Brain Injury Causing Coma or Insanity 50,000.00 

Total and Permanent Loss of Sight of One Eye 

(except perception of light) or Lens of One Eye 25,000.00


Temporary, Partial Disability (including cases 

due to insanity) 25,000.00 

2. Total Loss by Physical Severance or Total and 

Permanent Loss or Use of: 

Both Feet 50,000.00 

Both Hands 50,000.00 

One Hand and One Foot 50,000.00 

Either Hand or Foot and the Sight of One Eye 50,000.00 

Arm at or Above the Elbow 50,000.00 

Arm Below the Elbow 25,000.00 

One Hand at Wrist 25,000.00 

Leg Above the Knee 25,000.00 

Leg at or Below the Knee but Above the Ankle 25,000.00 

One Foot 25,000.00 

All Fingers of One Hand 25,000.00 

Thumb and Any Two/Three Fingers of One Hand 25,000.00 

Four Fingers Excluding Thumb of One Hand 25,000.00 

Thumb 12,500.00 

Index Finger 7,500.00 

Middle Finger 7,500.00 

Ring Finger 7,500.00 

Little Finger 5,000.00 

All Toes of One Foot 12,500.00 

Great Toe 5,000.00 

Any other Toe 2,500.00 

3. Total and Permanent Loss of:

1602 


Speech 50,000.00 

Hearing in Both Ears/Two External Ears 50,000.00 

Hearing in One Ear/One External Ear 25,000.00 

4. Loss of Nose, Penis or Testicles 25,000.00 

In no case shall the liability under this section exceeds Pesos Fifty Thousand 

(Php50,000.00) for both Landbased and Seabased workers. 

B. Funeral Grant 

The Funeral Grant of P20,000.00 for both category of workers shall henceforth be 

deemed as part of the death benefits. 

C. Disability/Dismemberment Benefit 

The Disability/Dismemberment benefits due the seabased workers shall likewise be 

upgraded and shall be equal to the existing coverage of the landbased workers as per 

attached impediment schedule referred to as Annex ìAî. 

D. Medical Reimbursement 

The Medical Reimbursement benefit shall be maintained at its present level. 

II. Premium Allotment 

The amount to be set aside from the OWWA contribution of the seabased workers for 

the Insurance Benefit Program Fund (IBPF) shall be increased from P87.50 to P165.00, the 

amount being equal to that of the landbased workers. 

III. Effectivity 

This MOI shall take effect 01 July 2003. All Secretariat issuances inconsistent herewith 

are hereby repealed or amended accordingly. 



(SGD.) VIRGILIO R. ANGELO 


--o0o-- 

Memorandum of Instruction No. 009, s. 2003 

Revised Guidelines Governing the Implementation of the SESP - Phase II


Pursuant to OWWA Board Resolution No. 031, dated 30 June 2003, and in response 

to the educational needs of deserving dependents of deceased, displaced, and low-income 

Overseas Filipino Workers (OFWs), MOI No. 001, Series of 2000, which provides guidelines 

for the Skills-for-Employment Scholarship Program - Phase II, is hereby amended as follows: 

A. NATURE OF THE PROGRAM 

The Skills-for-Employment Scholarship Program - Phase II (SESP-II) provides 

scholarship grant in the collegiate level to deserving and qualified dependents of OFWs. It 

covers degree courses not exceeding five (5) years of curriculum studies. 

B. OBJECTIVES 

The program intends to: 

1. Assist in ensuring educational opportunities for deserving dependents of deceased, displaced, 

and low-income OFWs; 

2. Enhance beneficiariesí marketability/employability; and 

3. Augment government efforts in maintaining a highly qualified manpower pool in the country. 

C. ELIGIBILITY AND LIMITATIONS 

1. Prioritization of eligibility to the program shall be as follows: 

a) Dependents of deceased OFWs; 

b) Dependents of permanently disabled OFWs who sustained work-related injuries; 

c) Dependents of untimely terminated/displaced OFWs; and 

d) Dependents of active low-income OFWs. 

2. Dependent as used herein shall refer to the daughter or son of married OFWs or the 

brother or sister of unmarried OFWs who are bonafide member of OWWA. Dependents 

shall not be more than 25 years of age. 

3. A grant for scholarship is non-transferable. 

4. Only one (1) qualified dependent in an OFW family shall be allowed to avail of this scholarship. 

D. MECHANICS OF IMPLEMENTATION 

1. Scholarship Privileges 

a) The scholarship grant hereto provided shall include financial assistance in the amount 

of P10,000 for tuition fee, and P20,000 for allowance/stipend to cover books/school supplies, 

clothing, transportation and other related expenses, per semester.

1604 


b) The scholar is free to choose his/her desired field of study, a well as the (governmentrecognized) 

school where he/she will enroll. 

2. Selection of Qualifiers/Scholars 

a) The National Capital Region (NCR) and the Regional OWWA Units (ROUs) shall interview, 

screen, select and indorse the list of prospective scholars to the OWWA Scholarship 

Committee. 

b) All qualified applicants shall be selected and ranked on the basis of grades obtained in 

their 4th year in High School, where general weighted average must not be lower than 

80% and their performance in the qualifying examination of the scholarship. 

c) Priority shall be given to applicants with the best academic record and lowest family 

income. 

d) The Scholarship Committee shall evaluate the recommendations of NCR and ROUs, 

and recommend appropriate action to top management. 

3. Release of Financial Assistance 

a) Tuition fees shall be paid directly to the school subject to the maximum rate allowed 

under the program; and 

b) The allowance/stipend per semester to cover books/school supplies, clothing, transportation, 

and other related expenses shall be released to NCR/ROUs before the start of 

every semester. The NCR/ROUs shall release it to the scholars on a monthly staggered 

basis. 

4. Scholarship Committee 

An OWWA Scholarship Committee is hereby created. It shall formulate policies and 

strategic thrusts, including operational systems required for the implementation of the program. 

It shall be constituted as follows: 

Chair - Director, Plans & Programs Office 

Vice-Chair- Head, Manpower Development Benefits Dept. 

Members - Head, Regional Operations Coordinating Center 

- Head, National Capital Region 

- Head, Social Benefits Department 

5. Administration 

a) The Plans and Programs Office (PPO) thru the Manpower Development Benefits Department 

(MDBD) shall administer the program in coordination with the Field Services 

Office (FSO), particularly the Regional Operations Coordinating Center (ROCC). 

b) Database for the program shall be maintained at the ROUs. Copies of basic documents 

must be regularly sent to ROCC which shall assist MDBD in maintaining a central registry 

of scholars.


6. Distribution of Scholarship Slots 

a) The Manpower Development Benefits Department of the Plans and Programs Office 

(MDBD-PPO_ shall recommend an equitable distribution of scholarship slots to Regional 

OWWA Units (ROUs), subject to approval of the OWWA Scholarship Committee. 

b) The concentration of OFW family population and availability of educational institution in 

the region shall serve as references in determining the proper distribution of scholarship 

slots. 

7. Requisites for Scholarship Application 

The eligible applicant must: 

a) Be a Filipino citizen; 

b) Be in good health and of good moral character; 

c) Belong to the upper 20% of the High School graduating class; 

d) Have a family gross annual income (for OFW as single earner) of US$3,600 or 

Php190,000; 

e) Pass the qualifying examination of the school where he/she intends to enroll; and 

f) Not be a recipient of other scholarship grant. 

8. Documentary Requirements 

a) Accomplished application form (2 sets) 

b) 1î x 1î ID pictures (2 copies) 

c) Proof of relationship to OFW/copy of Birth Certificate of applicant duly certified by the 

Local Civil Registrar 

d) Form 137 or Transcript of Records 

e) OFW E-Card/Overseas Employment Certificate (OEC)/Seamenís Service Record Book/ 

Employment Contract authenticated by the POEA or any proof of OWWA contribution 

f) Medical Certificate if OFW is disabled, Death Certificate if OFW is deceased and/or 

Case Report if OFW is untimely terminated or displaced 

g) Latest Income Tax Return or equivalent document 

9. Accreditation of Schools 

Though the choice of school is left to the scholar, the OWWA Scholarship Committee 

shall, after two (2) school years and upon appropriate program evaluation, accredit participating 

schools, which shall be deemed as OWWA partners for this program. 

10. Fund Source 

Funding for the program shall be sourced from the scholarship fund approved by the 

Board of Trustees. The Secretariat shall recommend to the Board the annual budgetary 

requirements of the program. The Board shall also be appraised of the total fund requirements 

over an envisioned period of program implementation for a specific number of scholars. 

E. PILOT OPERATIONS


1. For initial implementation this school year 2003-2004, the scholarship shall be opened to 

one hundred (100) deserving OFW-dependents only. Qualifiers shall be identified from 

the admitted/enrolled OFW-dependents at the University of the Philippines. 

2. The target participating branches of the University of the Philippines shall be in nine areas 

namely: Manila, Quezon City, Baguio City; Los BaÒos, Laguna; San Fernando and Angeles 

City in Pampanga; Iloilo City; Tacloban City; and Davao City. 

3. The target beneficiaries in the nine areas where there are UP Campuses/branches will be 

distributed as follows: 12 slots each for all areas except Regions IV (Laguna) and NCR 

(Manila and Quezon City) which shall be allotted with 14 slots each. 

4. Fund source for SY 2003-2004 shall be the CY 2003 SESP budget approved by the 

Board of Trustees. The MDBD-PPO shall recommend the corresponding budgetary realignment 

for approval of the Administrator, subject to accounting and auditing procedures. 

F. EFFECTIVITY 

This Memorandum of Instruction (MOI) shall take effect immediately. 



(SGD.) VIRGILIO R. ANGELO 


--o0o-- 

Memorandum Of Instruction No. 011, s. 2003 

Increase in Room and Board Benefits 

Pursuant to Executive Order 195, effective August 15, 1994 and Philhealth Board 

Resolution No. 533 Series of 2003, the new daily benefit limit for room and board effective 

April 1, 2003 discharges shall be as follows: 

HOSPITAL CATEGORY (FROM) OLD RATE (TO) NEW RATE 

Primary P120/day P 200/day 

Secondary 220/day 300/day 

Tertiary 345/day 400/day 

Accordingly, the above rates shall be the bench mark for the 200% increase in maximum 

limit for catastrophic cases. 


(SGD.) DELMER R. CRUZ 


--o0o--



Memorandum Of Instruction No. 012, s. 2003 

Amendments to MOI No. 009, series of 2003, 

Implementing Guidelines for the Skills-for -Employment 

Scholarship Program - Phase II 

To ensure the efficient implementation of the Skills-for-Employment Scholarship Program 

- Phase II (SESP-II) in the regional level, certain sections under Item E (Pilot Operations) of 

MOI No. 009, Series of 2003 are hereby amended. 

1. Paragraph 2 is hereby amended and shall read as follows: ìThe target participating 

branches of the University of the Philippines shall be in ten (10) areas, 

namely: Manila and Quezon City (NCR); Baguio City (CAR); Los BaÒos, Laguna 

(Region IV); San Fernando and Angeles City in Pampanga (Region III); 

Iloilo City (Region VI); Cebu City (Region VII); Tacloban City (Region VIII); and 

Davao City (Region XI).î 

2. Paragraph 3 is hereby amended and shall read as follows: ìThe target beneficiaries 

in the ten (10) areas where there are UP campuses/branches will be 

distributed as follows: twelve (12) slots each for regions CAR, III, VI, VII, VIII 

and XI, while Regions IV and NCR shall be allotted with 14 slots each.î 

These amendments shall take effect immediately. 




Deputy Administrator and Officer-in-Charge 

--o0o-- 

Memorandum of Instructions No. 013, s. 2003 

Policies and Guidelines for Managing the 

Pre-Departure Orientation Seminar (PDOS) 

Pursuant to the provisions of POEA-OWWA Joint Circular No. 04, Series of 2002, 

which facilitated the hand-over of PDOS to OWWA, and consistent with the objective of 

implementing a standardized PDOS, as well as ensuring its orderly implementation and 

responsiveness to the needs of departing Overseas Filipino Workers (OFW), the following 

policy directions and operational guidelines are hereby promulgated: 

A. DEFINITION OF TERMS 

For purposes of this Memorandum Of Instruction (MOI):

1608 


1. Registration shall refer to the act of recognizing and entering in the official records of 

OWWA the existence of a PDOS Trainer or Provider, upon compliance with the requirements 

provided in this MOI. 

2. PDOS Provider shall refer to any recruitment/manning agency, association of recruitment/manning 

agencies, non-government organizations (NGO), network of NGOs, or other 

entities authorized to engage in the provisions of PDOS. 

3. PDOS Trainer shall refer to an individual who has successfully completed the OWWA or 

POEA Training Program for PDOS management, or for PDOS trainers/facilitators, and 

who has registered at OWWA as a PDOS Trainer. 

4. Network of NGOs shall refer to a duly registered group of NGOs whose main concern is 

the general interest and welfare of OFWs as stated in their by-laws and other incorporation 

documents. 

5. Entities shall refer to local or international institutions concerned with migrant workers, 

operating legitimately under Philippine laws. 

6. Vulnerable Occupational Groups shall refer to Overseas Filipino Workers (OFW) who 

are known to be more susceptible to abuses of their employers, by reason of their sex or 

nature of work. 

B. POLICY DIRECTIONS ON PDOS IMPLEMENTATION 

1. PDOS shall be implemented from a welfare perspective. It shall be a major component of 

OWWAís information and education program for its members, and shall be regarded as 

an integral part of the over-all program of government for the protection and welfare of 

OFWs. 

2. PDOS shall be pursued in such a way that OFWs will appreciate their participation, not as 

mere compliance with a government regulation, but as a key factor towards their personal 

success in overseas employment. Program implementors must therefore optimize the use 

of motivational modes in the delivery of PDOS. 

3. PDOS shall have a course design which addresses the basic needs of OFWs for an 

orientation only. Overloading PDOS with too much information shall be avoided. Focus 

shall be on enabling an OFW cope with adjustment difficulties usually experienced by an 

OFW within the first six (6) months of work and stay at overseas jobsites. 

4. Other broader and deeper OFW information and education concerns, which cannot be 

covered in an orientation scheme due to inherent need for longer time and progressive 

learning processes, shall be referred to implementors of pre-employment counseling programs, 

and/or other related OWWA programs delivered during the other phases of an 

OFW employment, either on site, or upon return/reintegration to the country. 

5. The primary responsibility of deploying agencies to provide PDOS to OFWs, about two 

weeks prior to deployment schedule, shall always be emphasized.


6. Recruitment and manning agencies may designate their industry associations and other 

registered providers for the PDOS of their recruits, subject to compliance with the policies, 

guidelines, systems and procedures hereto provided. 

7. OWWA shall optimize the potentials of partnership with NGOs, the private sector, and 

other government institutions in pursuing the new visions for PDOS as indicated in this 

MOI. 

8. Attendance to PDOS shall be free of charge on the part of the OFWs. Modest fees 

previoulsy authorized by POEA may be allowed for program ìmaintenance and upkeepî 

purposes; provided that said fees shall be borne by the endorsing or sponsoring agency. 

C. GENERAL GUIDELINES ON REGISTRATION 

1. Registration of Current PDOS Providers and Trainers 

POEA-accredited Agency/NGO PDOS Providers and Trainers are deemed registered at 

OWWA. However, PDOS Providers shall adopt the changes in PDOS curriculum and 

submit the prescribed documentary requirements. Trainers shall attend the prescribed 

retooling sessions and submit documentary requirements upon receipt of notice from 

OWWA. 

2. Registration of New PDOS Providers and Trainers 

Registration for new PDOS Providers shall be open to recruitment and manning agencies 

or their industry associations; NGOs or network of NGOs for ìvulnerable occupational 

groupsî; and entities with special or specific programs for the general interest and welfare 

of OFWs, including those which are supported or required by labor-receiving countries. 

3. Change/Establishment of Additional Venue 

The registration of a PDOS Provider shall be effective only for the specific venue and 

geographical location as applied for, inspected, and recorded at OWWA. A registered 

PDOS Provider shall duly notify OWWA in case of need for change of venue, or establishment 

of additional venues. OWWA shall thence subject the notice to appropriate procedures 

to effect modification in the registration records of the PDOS Provider. 

D. SPECIFIC GUIDELINES 

1. Requisites for Registration 

PDOS Provider applicants may only register at OWWA Workers Information and Education 

Center (WIEC) if they meet the following requisites: 

a) Must be duly licensed or recognized by the appropriate government agency for their 

current field of operation; 

b) Must have a PDOS Trainer duly registered at OWWA;

1610 


c) Must have a venue conducive for learning as to space, ventilation, lighting, restroom 

facilities and equipment required by the usual volume of agency/institution PDOS participants; 

and 

d) Must have at least one (1) whiteboard; one (1) overhead projector; one (1) television 

set; one (1) vcd player; and appropriate audio equipment. 

2. Documentary Requirements for Registration 

New PDOS Provider applicants shall submit the documentary requirements hereunder 

enumerated upon filing of application for registration. Providers previously accredited by 

POEA shall likewise submit such documents upon receipt of corresponding advice from 

WIEC-OWWA. 

a) Accomplished Application Form 

b) Trainerís bio-data and copy of Certificate of Participation/Completion of PDOS Trainerís 

Training 

c) Copy of license to operate from POEA (in case of recruitment/manning agencies) 

d) Copy of incorporation/registration documents and literature on institutional mission and 

operations (in case of NGOs and other entities) 

3. Qualification Standards for PDOS Trainers 

PDOS Trainers may be registered at OWWA provided they meet the following qualification 

standards: 

a) Must be a college graduate. Deficiency in education may be substituted with 36 hours 

of related training for every year of deficiency; or 2 years of related experience for every 

year of deficiency; 

b) Must have shipboard experience for the sea-based sector and on-site experience for 

land-based workers, or must have been involved in training, research, administration, or 

undertakings relevant to overseas employment for at least three (3) years; 

c) Must exhibit good communication skills, fluent in English and Filipino; and 

d) Must have successfully completed the OWWA Trainerís Training for PDOS Management. 

4. Documentary Requirements for PDOS Trainers 

For registration purposes, PDOS Trainers must submit the documents hereunder listed. 

Trainers previously accredited by POEA shall submit the same upon receipt corresponding 

advice from WIEC-OWWA. 

a) Duly accomplished application form;


b) Certificate of employment stating current and previous positions; 

c) Copy of Certificate of Completion of OWWA Trainerís Training; 

d) Proof of highest educational attainment; and 

e) Relevant training certificates. 

In case of PDOS Trainers previously accredited by POEA, they shall submit the POEA 

certificate of completion of PDOS Trainers Training in lieu of (c) above. 

5. Other Guidelines for PDOS Trainers 

a) Agency Liaison Officers are not qualified to apply as PDOS Trainers in concurrent 

capacity; 

b) Trainers must renew their Registration at OWWA-WIEC every two (2) years. Renewal 

of registration shall be based on: 

1. Favorable endorsement of agency/institutions; and 

2. Attendance to seminar, forum or refresher course as required by OWWA. 

E. MANAGEMENT ACTION ON APPLICATION FOR REGISTRATION 

1. PDOS Provider 

a) The evaluation process for registration purposes shall be based on compliance with 

documentary requirements, availability of qualified PDOS Trainer, and favorable results of 

inspection of the identified PDOS venue. 

b) ROUs may facilitate the registration of PDOS Providers in their respective regions. The 

ROU Supervisor shall submit the inspection report with their recommendation to WIEC- 

OWWA for evaluation. 

c) Applications for registration at the NCR shall be directly filed at WIEC-OWWA. 

d) The OWWA Administrator shall approve the application for registration upon recommendation 

of WIEC-OWWA. 

2. PDOS Trainer 

a) Registration of PDOS Trainer shall be based on meeting the qualification standards 

(QS) for PDOS Trainers, submission of complete documentation requirements, and completion 

of the OWWA-prescribed training or retooling sessions for PDOS Trainers. 

b) Trainers previously accredited by POEA may continue serving PDOS Providers and 

will be issued Certification of registration upon completion of OWWA-prescribed retooling 

session. 

3. Certificate of Registration

1612 


The certificate of registration for PDOS Providers and Trainers shall be signed by the 

OWWA Administrator upon recommendation of WIEC. 

F. PDOS AT POEA AND OWWA REGIONAL OFFICES 

1. Pursuant to POEA-OWWA Joint Circular No. 04, Series of 2002, POEA shall conduct 

PDOS for GPB-placed and name-hired workers. 

2. Registered PDOS Providers shall conduct PDOS for the National Capital Region (NCR). 

3. In all other regions, the Regional OWWA Units (ROU) shall conduct PDOS until such time 

that the volume of participants would necessitate the services of registered PDOS Providers. 

G. REPORTING, MONITORING AND EVALUATION 

1. Reporting System 

PDOS providers are required to adopt the PDOS Report Form prescribed by OWWA. 

The following specific guidelines shall likewise be observed: 

a) The monthly PDOS Report Form shall be submitted within the first 15 days of each 

month; 

b) The names of workers, date of PDOS and skills/ratings or positions, country of destination 

and certificate of attendance control number shall be indicated; and 

c) The report for a particular month shall indicate the total number of male and female 

participants, broken down into new hires and rehires. 

2. Monitoring and Evaluation System 

OWWA-WIEC shall conduct monitoring and evaluation of PDOS implementation. It shall 

use standard monitoring and evaluation schemes as hereunder provided. 

a) PDOS participants shall be required to rate the over-all conduct of PDOS and the 

delivery of PDOS modules by trainers. Activity evaluation instruments/forms shall be developed 

and prescribed for this purpose. 

b) Duly designated OWWA officers and staff who have been recommended and oriented 

by WIEC shall conduct unannounced inspection/observation missions focused on the 

following major concerns: 

1. Compliance with PDOS Curriculum; 

2. Quality of PDOS Materials; 

3. Compliance with PDOS Reports/other requirements; and 

4. Trainer Performance 

c) The PDOS Curriculum presented during the OWWA Consultation/Dialogue Series with 

PDOS Providers shall serve as reference material for monitoring and evaluation purposes, 

upon its formal adoption and distribution.


d) The monitoring instrument will be co-signed by the Trainer and the OWWA Officer who 

conducted the monitoring or evaluation process. 

e) Recommended improvements will be immediately relayed to the top management of the 

agency, entity, or NGO concerned. 

H. REVOCATION OF REGISTRATION 

Non-cooperation of PDOS Providers in pursuing the recommended improvements of 

OWWA-WIEC Program Monitoring and Evaluation Team, after a year from receipt of 

corresponding notice, shall cause the revocation of registration at OWWA. The same 

shall be reported accordingly to POEA for appropriate action. 

I. PDOS ADVISORY COUNCIL 

1. OWWA shall sustain the previously established PDOS Advisory Council (PAC) for purposes 

of consultations and enhancement of partnerships for development efforts on PDOS 

concerns. 

2. Representatives from the NGO-PDOS providers, recruitment and manning industry associations, 

and network of registered providers and trainers shall comprise the PAC. As 

may be necessary, professionals and experts may be invited to participate in PAC meetings. 

3. PAC shall meet regularly as may be agreed upon by its members. 

4. OWWA-WIEC shall provide secretariat services for PAC activities. 

J. EFFECTIVITY 

This Memorandum of Instructions shall take effect upon compliance with the usual publication 

requirements. 



Deputy Administrator and 

Officer-In-Charge 

PALAWAN COUNCIL FOR SUSTAINABLE DEVELOPMENT 


PCSD Resolution No. 03-209 

Resolution Amending PCSD Administrative Order No. 00-05, 

Series of 2000 (Revised Guidelines for the Accreditation, 

Regulation, and Monitoring of Live Fish Catching, Culture, 

Transport and Trading in Palawan)







--o0o-- 

PCSD Resolution No. 03-211 

A Resolution Further Amending PCSD Administrative Order No. 00-05, 

series of 2000 (Revised Guidelines for the Accreditation, Regulation 

and Monitoring of Live Fish Catching, Culture, Transport 

and Trading in Palawanî 



U.P. Law Complex, Diliman, Quezon Cityadded to Section 5 

PANGASIWAAN SA PAGPAPAUNLAD NG KALAKHANG 

MAYNILA 

(Metropolitan Manila Development Authority) 


MMDA Regulation No. 03-003, s. 2003 

Futher Amending MMC Ordinance No. 3, series of 1989 

Entitled ìDesignating and Regulating The Use of Bus and PUJ 

Lanes in Major Thoroughfares in Metro Manilaî 

WHEREAS, MMC Ordinance No. 03, Series of 1989, as amended by MMA Ordinance 

No. 5, Series of 1990, designates and regulates the use of BUS and PUJ Lanes in major 

thoroughfares of Metro Manila, thereby allowing private and other motor vehicles to use the 

said lanes on certain hours of the day; 

WHEREAS, with the yearly increase of private and public utility vehicles in Metro 

Manila, it has been observed that allowing private cars and other motor vehicles to use the 

Bus and PUJ Lanes is no longer appropriate because said lanes are always occupied by 

Public Utility Vehicles. 

NOW, THEREFORE, pursuant to Section 6 of RA 7924, the Metro Manila Council 

hereby amends Section 2 of MMC Ordinance No. 3, series fo 1989 as amended by MMC 

Ordinance No. 05, series of 1990, which as amended should now read as follows:


Section 2. Loading and Unloading of Passengers and Goods - 

ìAll public utility vehicles can load and unload passengers and goods anywhere 

along the designated Bus and PUJ lanes at any given time of the day, 

except 12 meters before an intersection and 20 meters after an intersection. 

Private vehicles shall not be allowed to use the Bus and PUJ lanes. A motorist 

intending to make a right turn shall merge to the right 12 meters before the 

intersection. A motorist entering a roadway with a Bus or PUJ lane shall exit the 

lane without 20 meters from the intersection. Emergency vehicles and taxis are 

exempted from this restriction.î 

All regulations and issuances or any part thereof that are inconsistent with this regulation 

are hereby repealed, superseded or modified accordingly. 

This Regulation shall take effect fifteen (15) days after publication in two (2) newspapers 

of general circulation in Metropolitan Manila. 


(SGD.) BAYANI F. FERNANDO 

Chairman 

(SGD.) BENJAMIN C. ABALOS, JR. (SGD.) VERGEL A. AGUILAR 

Mayor, City of Mandaluyong Mayor, City of Las PiÒas 

(SGD.) FELICIANO R. BELMONTE, JR. (SGD.) ROSENDO T. CAPCO 

Mayor, Quezon City Mayor, Pateros 

(SGD.) BOBBIT L. CARLOS, M.D. (SGD.) SOLEDAD C. EUSEBIO 

Mayor, Valenzuela City Mayor, Pasig City 

(SGD.) JOSEPH VICTOR G. EJERCITO (SGD.) JAIME R. FRESNEDI 

Mayor, San Juan Mayor, City of Muntinlupa 

(SGD.) MA. LOURDES C. FERNANDO (SGD.) REYNALDO O. MALONZO 

Mayor, Marikina City Mayor, Caloocan City 

(SGD.) JOEY P. MARQUEZ (SGD.) TOBIAS M. TIANGCO 

Mayor, ParaÒaque City Mayor, Navotas 

(SGD.) SIGFRIDO R. TINGA (SGD.) AMADO S. VICENCIO 

Mayor, Taguig Mayor, City of Malabon 

(SGD.) WENCESLAO B. TRINIDAD (SGD.) JESUS C. CRUZ 

Mayor, Pasay City Chairman, Metro Manila Vice 

Mayors League 

(SGD.) PERPETUO F. CAMILA 

President 

Metro Manila Councilors League 

--o0o--

1616 



MMDA Regulation No. 03-004 

Banning Owners/Operators of Business/Commercial Establishments 

and Other Establishments from Protecting/Coddling Sidewalk 

Vendors Within Their Premises/Frontage and Providing 

Penalties for Violation Thereof 

WHEREAS, Republic Act No. 7924 empowers the Metropolitan Manila Development 

Authority (MMDA) to formulate, coordinate, monitor and implement policies, standards, programs 

and projects to rationalize the existing transport operations, infrastructure requirements 

and the use of thoroughfares in Metro Manila; 

WHEREAS, MMDA Resolution No. 02-28, series of 2003, authorizes the MMDA and 

the Local Government Units (LGUs) of Metro Manila to clear the sidewalks, streets, avenues, 

alleys, bridges, parks and other public places in Metro Manila of all illegal structures and 

obstructions; 

WHEREAS, sidewalk vendors still proliferate in Metro Manila, thereby obstructing the 

flow of traffic and likewise limiting the sidewalk space intended for public use; 

WHEREAS, it has been observed that sidewalk vendors are usually protected/cuddled 

by some owners/operators of establishments especially during operations on illegal obstructions. 

NOW, THEREFORE, pursuant to Section 6 of RA 7924, this Regulation is hereby 

adopted and promulgated by the Metro Manila Council, that: 

SECTION 1. Definition of Terms - 

a. Protecting/Coddling - any act of protecting/tolerating sidewalk vendors within the premises/frontage 

of business/commercial establishments and other establishments by allowing 

them to hide or operate within their premises during operations on Sidewalk Clearing, Antiillegal 

Vending and other similar operations that may be launched by the MMDA to improve 

the traffic flow and pedestrian use of the sidewalks in Metro Manila. 

b. Sidewalk Vendors - any person vending any kind of goods along the sidewalks. 

c. Business/Commercial Establishments and Other Establishments - include government 

or private offices, schools, hospitals/medical centers, auditoriums, museums, churches, 

convention centers, theaters/movie houses, bar, restaurant/cocktail lounges/canteen/kiosk 

and other eating places, dance halls/disco houses, day and night clubs, beer/pub houses, 

hotels, motels, department stores, markets/groceries, factories, plants and other similar establishments. 

d. Frontage/Premises - refers to the immediate frontage and/or within the vicinity of business/commercial 

establishments or offices whether private or public.


SECTION 2. Prohibited Acts - It is unlawful for any owner/operator of any establishment 

to coddle sidewalk vendors within their immediate frontage/premises. 

SECTION 3. Penalty - Any owner/operator of establishment caught coddling sidewalk 

vendors within their premises/frontage shall be fined P1,000.00 per offense. 

SECTION 4. Coverage - This Regulation shall apply to all business/commercial and 

other establishments in Metro Manila. 

SECTION 5. Separability Clause - Any portion of this Regulation which may be declared 

unconstitutional shall not affect or invalidate the other provisions or portions of this 

Regulation. 

SECTION 6. Repealing Clause - This Regulation shall be in support of and will not in 

any manner repeal, amend or modify any existing similar local ordinance in Metro Manila. 

SECTION 7. Effectivity - This Regulation shall take effect fifteen (15) days after its 

publication in two (2) newspapers of general circulation of Metro Manila. 


(SGD.) BAYANI F. FERNANDO 

Chairman 

(SGD.) VERGEL A. AGUILAR (SGD.) ROSENDO T. CAPCO 

Mayor, City of Las PiÒas Mayor, Pateros 

(SGD.) BOBBIT L. CARLOS, M.D. (SGD.) JOSEPH VICTOR G. EJERCITO 

Mayor, Valenzuela City Mayor, San Juan 

(SGD.) SOLEDAD C. EUSEBIO (SGD.) MA. LOURDES C. FERNANDO 

Mayor, Pasig City Mayor, Marikina City 

(SGD.) JAIME R. FRESNEDI (SGD.) TOBIAS M. TIANGCO 

Mayor, City of Muntinlupa Mayor, Navotas 

(SGD.) SIGFRIDO R. TINGA (SGD.) WENCESLAO B. TRINIDAD 

Mayor, Taguig Mayor, Pasay City 

(SGD.) AMADO S. VICENCIO (SGD.) JESUS C. CRUZ 

Mayor, City of Malabon Chairman, Metro Manila Vice Mayors 

League 


(SGD.) PERPETUO F. CAMILA 

President 

Metro Manila Councilorís League 

--o0o--

1618 


MMDA Resolution No. 03-14 

Allowing the Metropolitan Manila Development Authority to Regulate 

the Use of the Greater Manila Mass Transport System Facilities 




PHILIPPINE COCONUT AUTHORITY 

Date Filed: 05 June 2003 


Amended Rules and Regulations Authorizing Further the Increase and 

Collection Thereof of Administrative and Regulatory/Service Fees 



PHILIPPINE DEPOSIT INSURANCE CORPORATION 


PDIC Regulatory Issuance No. 2003-01 

Amendment to Regulatory Issuance No. 2002-02, Guidelines on 

Termination and Reinstatement of Insured Status of Banks 

Pursuant to the provisions of RA 3591, as amended, entitled ìAN ACT ESTABLISHING 

THE PHILIPPINE DEPOSIT INSURANCE CORPORATION, DEFINING ITS POWERS AND 

DUTIES AND FOR OTHER PURPOSESî, and PDIC Board Resolution No. 2003-08-136 

dated 20 August 2003, the following regulations are hereby promulgated: 

wit: 

SECTION 1. Amendment, Item 9 of the PDIC Regulatory Issuance No. 2002-02, to


ì9. The insured deposits of each depositor in the bank as of the effective date 

of termination, less all subsequent withdrawals/debit adjustments from any deposits 

of such depositor, shall continue to be insured for a period of ninety (90) days 

from the date of such termination. No additions to any such deposits and no new 

deposits in such bank after the date of such termination shall be insured by 

PDIC.î 

is hereby amended to read as follows: 

ì9. The insured deposits of each depositor in the bank as of the day following 

the third and final publication in a newspaper of general circulation of the 

notice of termination of the bankís insured status, less all subsequent withdrawals/debit 

adjustments from any deposits of such depositor, shall continue to 

be insured for a period of ninety (90) days from said day. No additions to any 

such deposits and no new deposits in such bank after the date of the third and 

final publication of such notice of termination shall be insured by PDIC.î 

SECTION 2. Repealing Clause - All Regulatory Issuances issued by the PDIC or parts 

thereof which are inconsistent with the provisions of this issuance are hereby repealed or 

amended accordingly. 

SECTION 3. Effectivity - This issuance shall take effect fifteen (15) days after publication 

in the Official Gazette or in any newspaper of general circulation. 


(SGD.) RICARDO M. TAN 

President and Chief Executive Officer 

PHILIPPINE LEISURE AND RETIREMENT AUTHORITY 


Rules and Regulations to Implement the BI-PLRA MOA 

Rule I 

Definition and Basic Guidelines 

SECTION 1. Title - These rules shall be referred to as the Rules and Regulations to 

Implement the Extended Stay Retireeís Program. 

SECTION 2. Definition of Terms - For purposes of these Rules and regulations, the 

following definitions shall apply: 

a. BI shall refer to the Bureau of Immigration; 

b. PLRA shall refer to the Philippine Leisure and Retirement Authority;

1620 


c. MARKETER shall refer to the individuals, partnerships, corporations or law firms (whether 

based in the Philippines or abroad) who are accredited/authorized by PLRA to promote 

the extended stay program. 

d. PROGRAM shall refer to the new PLRA initiative to attract the extended stay of retirees; 

e. PROGRAM PARTICIPANT shall refer to any foreign national-natural person who enters 

in the Philippines for the purpose of stay at one or at a series of resorts, hotels or 

establishments that are accredited either by the Department of Tourism (DOT) or by the 

PLRA, or any corporation duly authorized by the PLRA to accredit such resorts, hotels or 

establishments as being suitable for accommodating extended stay of foreign retirees, 

provided that, said foreign national has contracted with said resorts, hotels or 

establishments, directly or indirectly, to remain in as PARTICIPANT for not less than a 

continuous four week (28 calendar days) period; 

f. SVV shall refer to a Special Visitor Visa that allows for a 31-calendar day stay in the 

Philippines, provided that, its holder remains a program participant; and 

g. SRVV shall refer to a Special Retiree Visitors Visa that allows for a one year extended 

stay from the date of (i) arrival in the Philippines and (ii) contract to stay at one or at a 

series of resorts, hotels or establishments accredited by the DOT or by the PLRA or any 

corporation duly authorized by the PLRA to accredit such resorts, hotels or establishments 

as suitable for accommodating the extended stay of foreign retirees. 

Rule II 

Controls for the Issuance of SVV 

SECTION 1. Persons entitled to SVV. SVV shall only be issued to program participants 

who appear on an Arrival List provided in advance by the MARKETER to the BI and PLRA. 

SECTION 2. Contents of the MARKETER Arrival List - The MARKETER Arrival List 

shall contain the names, passport numbers, carrierís name and voyage/flight number, and 

the expected dates of arrival of each program participant at least five days before the scheduled 

date of arrival of each program participant. 

SECTION 3. Reception of Program Participants - Program participants arriving, shall 

be received at the designated port of entry by a MARKETER and authorized PLRA 

representative who shall assist the program participants by ensuring, at all times, full 

compliance with BI entry procedures and requirements. 

SECTION 4. Admission of Program Participants. 21-Day Visa and Ten-day Service 

Fees - Upon proof of full compliance with BI entry requirements under Section 3 of these 

Rules, the program participant shall be admitted as a temporary visitor (special) for a continuous 

31-day stay in the Philippines. For this purpose, in addition to the regular 21-day visa fee, 

the program participant shall be assessed a service fee of P500.00 for the ten day stay. 

Rule III 

Controls for Conversion from SVV to SRVV 

SECTION 1. Application for Conversion - A program participant may apply for 

conversion of status from SVV to SRVV upon written request to the PLRA authorized 

representative within ten (10) days prior to the expiration of the 31-day stay visa in the 

Philippines.


SECTION 2. PLRA Endorsement to BI - PLRA approved applications for conversion 

of status from SVV to SRVV shall be endorsed within the ten-day period to the BI for 

approval, subject to BI requirements. For this purpose, the program participant concerned 

shall be assessed by the PLRA a service fee of US$200.00. No request for conversion of 

status from SVV to SRVV shall be entertained by the BI, unless endorsed by the PLRA BI 

shall charge the Program Participant its usual change of status fee. 

Rule IV 

Controls for the Temporary Stay and Departure of SVV and SRVV 

SECTION 1. Monitoring Temporary Stay of SVV and SRVV - PLRA and its participating 

resorts, hotels or establishments shall at all times account and be responsible for monitoring 

compliance by all program participants under SVV or SRVV status. Non-compliance by 

program participants shall immediately be reported by the PLRA and/or its participating 

resorts, hotels or establishments to the BI, for appropriate administrative action under 

Commonwealth Act (C.A.) No. 613. 

SECTION 2. Monitoring Departure of SVV and SRVV - PLRA and its participating 

resorts, hotels or establishments shall at all times be responsible for the prompt departure of 

all program participants, upon the expiration of their SVV or SRVV status which are nonrenewable. 

Program participants who fail to depart from the Philippines upon the expiration 

of their respective SVV or SRVV shall be immediately reported by the PLRA and/or its 

participating resorts, hotels or establishments to the BI, for appropriate administrative action 

under C.A. No. 613. 

Rule V 

Other Provisions 

SECTION 1. Limitation of these Rules - These Rules shall not in any way diminish or 

prejudice the powers and prerogatives of the BI, as provided by existing laws. Further, the BI 

reserves the right to suspend or revoke these Rules, at any time, in the interest of national 

security, public safety and public health. 

SECTION 2. 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 3. These Rules shall take effect 15 days after compliance with publication 

requirements, as provided by Executive Order No. 292 (series of 1987). 

Adopted: 06 Aug. 2002 


(SGD.) ANDREA D. DOMINGO 

Commissioner 

Bureau of Immigration 

--o0o-- 

Resolution No. 24, Series of 2003 

Investments of Retirees

1622 


ìRESOLVE, AS IT IS HEREBY RESOLVED, to approve as a pilot program from date 

of the approval of this resolution up to Dec. 31, 2003, pre-existing investments of retirees 

in condominuim projects, shares of stock in corporations, leasehold agreements and 

proprietary membership shares be considered in lieu of the remittance of the required 

dollar time deposits, under the following terms and conditions: 

1. The acquisition cost, not the market value, of the investment is not less than the 

PHP equivalent of either the US$50,000 or US$75,000 based on the current exchange 

rate. For condominium units or proprietary membership shares, the acquisition cost in the 

Deed of Sale or Deed of Assignment shall be sufficient thereof. In case of shares of stock, 

the par value per share as certified under oath by the Corporate Secretary must be presented. 

The funds used to acquire the said investments must be foreign-sourced which shall be 

proven by the Certification by the bank that same were indeed inwardly remitted at least 

five (5) years ago; 

2. The applicant retiree submits together with his PLRA Application for SRRV visa, 

true copies of the following documents with the PLRA restriction annotated thereon, namely: 

2.1 For Condominium Unit/Long Term Lease - the Condominium Certificate 

of Title (CCT) or Transfer Certificate of Title (TCT) duly certified by the Register 

of Deeds; 

2.2 For Shares of Stock - Stock Certificate and Secretaryís Certificate under 

oath that the PLRA restriction has been duly annotated in the Stock Transfer 

Book; 

2.3 For Proprietary/Membership Share - Membership Certificate and Secretaryís 

Certificate under oath that the PLRA restriction has been duly annotated 

in the Stock Transfer Book; 

3. The applicant pays the processing fee and the visitorial fee of 2% of the peso 

equivalent of his investment corresponding to his qualifying age upon submission 

of his application for SRRV and every year thereafter as mandated under 

the Implementing Investment Guidelines; and 

4. The applicant is willing to have his property/investment inspected regularly 

or as the need arises by PLRA investment officers to insure that the retireeís 

investment is existing and operational for so long as he is a holder of an SRRV 

visa. 

APPROVEDî 


(SGD.) SAIDAMEN B. PANGARUNGAN 

Corporate Secretary 

ATTESTED: 

(SGD.) FRANCISCO E. LIRIO 

Vice Chairman 

CEO/GM, PLRA


(SGD.) JUAN DE ZUNIGA, JR. 

Representative, BSP 

(SGD.) ARTHEL B. CARONONGAN 

Representative, BIí 

(SGD.) EVELYN R. CAJIGAL 

Representative, DOT 

PHILIPPINE NUCLEAR RESEARCH INSTITUTE (PNRI) 




Fees and Charges for Radioactive Material Licenses 

and Other Related Regulatory Services 



PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION 



Guidelines on the Registration of Foreign Principals/Employers 

in the US, Canada and Europe, Including Exemption 

from POLO Verification Requirements 

Pursuant to POEA Governing Board Resolution No. 3, Series of 2003, all foreign 

employers hiring overseas Filipino workers for the United States of America, Canada and 

Europe are exempted from the verification requirement for recruitment and employment 

documents by the Philippine Overseas Labor Offices (POLO)s for purposes of POEA 

registration. 

I. Coverage 

The Circular shall apply to recruitment/employment documents of foreign employers/ 

principals who are hiring Filipino professionals, skilled and technical workers for the United 

States, Canada and Europe, and caregivers for Canada.

1624 


The existing requirements for verification of recruitment and employment documents 

shall be maintained for the following categories: 

a. employers/principals hiring household workers/domestic helpers; and 

b. employers/principals which are considered as ìnew marketsî for purposes of 

application for recruitment license. 

The existing requirement for verification of recruitment and employment documents of 

employers hiring ìFilipino nurses for the United Kingdom, and healthcare workers and other 

categories of workers for Irelandî, under the name hire system as provided under POEA 

Memorandum Circular No. 05, Series of 2000, and Memorandum Circular No. 11 Series of 

2002 shall continue to apply. 

II. Registration of Principals at the POEA 

All recruitment and employment documents shall be submitted to the POEA through the 

Philippine licensed recruitment agency for the registration of the principal/employer. The 

basic requirements for registration are as follows: 

a. Notarized Special Power of Attorney or recruitment agreement, or service agreement 

with the Philippine licensed agency; 

b. Master employment contract; 

c. Manpower request of the foreign principal indicating the position and salary of workers 

to be hired; and 

d. Company registration or business license. 

Additional documentary requirements for ìhealthcare workers and other categories of 

workers for the United Kingdom and Irelandî as specified under POEA Memorandum Circular 

No. 5 (Series of 2000) and No. 11 (Series of 2002) shall be maintained. 

III. Validity of registration of Foreign Principals and Projects 

The registration of the foreign principal and/or project shall have a maximum validity of 

four (4) years, unless sooner revoked or cancelled by the POEA on any of the following 

grounds: 

a. Expiration of the principalís business license; 

b. Upon written mutual agreement by the parties to pre-terminate the Agreement; 

c. False documentation or misrepresentation in connection with the application for registration; 

and 

d. Final judgment in a disciplinary action against the foreign principal.


Provisional registration may be granted for a period of ninety (90) days for a principal 

that substantially meets the requirements for registration. Further, the expiration of the agencyís 

license shall not cause the automatic expiration or cancellation of the registration which shall 

only be suspended until the renewal of the license. 

IV. Open Registration 

A principal/employer may be registered to more than one agency provided that a 

uniform compensation package shall be adopted for all workers recruited and hired. There 

shall be no minimum number of job orders or minimum number of deployed workers that will 

be required. 

V. Renewal of Registration 

The registration of the principal shall be renewed upon the request of the local agency 

partner provided that the documents required for initial registration are still valid. 

VI. Additional Manpower Requirements 

Requests for additional manpower requirements indicating the specific position/skills, 

number of workers needed and salary, shall no longer require verification and authentication 

by the POLO and Philippine Embassy/Consulate at the worksite or nearest the worksite. The 

request shall be submitted directly to the POEA. 

VII. On-site Monitoring 

The POEA shall transmit the list of registered principals to the concerned Philippine 

Embassies/Consulates or POLOs in the host country on a quarterly basis, for monitoring of 

the employment conditions and welfare of the workers. 




(SGD.) ROSALINDA DIMAPILIS-BALDOZ 


--o0o-- 


Implementation of the E-Receipt System for Overseas Landbased 

Workers Hired Through Recruitment Agencies 

Pursuant to the thrust of the Administration to streamline processes and requirements 

for the documentary processing of overseas Filipino workers, the e-Receipt system shall be 

implemented for workers documented at the POEA Central Office.

1626 


The e-Receipt system envisions to facilitate the processing of worker documents and 

their mobilization through electronic connectivity. The e-Receipt which takes the place of the 

overseas employment certificate (OEC), indicates the name of the worker, recruitment agency 

and worksite, and the processing date and validity. The Official Receipt Number/Serial Number 

shall replace the OEC number. The three copies of the e-Receipt are for the worker, airline 

and airport. 

The e-Receipt system is now being pilot tested with the view of achieving efficiency. 

The use of OECs shall be an option if technical problems will occur. Corrections on the 

entry(ies) in the e-Receipt will be countersigned by the overseas labor offices authorized for 

this purpose. 

For information. 





--o0o-- 


Guidelines on the Recruitment and Deployment 

of Filipino Overseas Performing Artists to Japan 

Pursuant to POEA Governing Board Resolution No. 02, series of 2003, and in 

consonance with the thrust of the Administration to streamline the recruitment and deployment 

procedures for Overseas Filipino workers, including overseas performing artists bound for 

Japan, the following guidelines are hereby issued: 

I. Authority to Deploy Overseas Performing Artists to Japan 

The POEA shall maintain a list of Philippine recruitment agencies authorized to recruit 

and deploy OPAs for Japan. Inclusion in the list shall be evaluated upon submission of the 

following to the Pre-employment Services Office. 

A. SPA and manpower request of a new market in Japan verified by the Philippine 

Overseas Labor Office in Japan. 

B. TESDA Certificate of Registration of the agencyís own training program for OPAs or 

the agencyís contract or tie-up with a training center. (If training program of agency or 

the training center tie-up is not yet registered with TESDA, a proof of filing may be 

submitted). 

The expiration of the agencyís license shall not cause the automatic expiration or 

cancellation of the authority of the agency to recruit and deploy OPAs for Japan, which shall 

only be suspended until the renewal of the license.


II. Verification of Documents of Japanese Principals by the Philippine Overseas 

Labor Office (POLO) 

The POLO shall verify the following documents submitted by the Japanese principal. 

A. Special Power of Attorney (SPA) issued in favor of the Philippine agency 

B. Manpower request indicating the performance venue(s), positions, number of OPAs 

needed and salary; 

C.Affidavit of Responsibility and Undertaking; and, 

D.Valid commercial registration of the Japanese principal. 

Upon verification, the POLO shall issue a verification certificate, valid for one year. Every 

year thereafter, the following documents shall be submitted to the POLO as requirements 

for issuance of a new verification certificate: 

A. Report of deployment of principal 

B. Report of insurance coverage of workers hired by principal 

C.Copy of Escrow Agreement 

D.Valid commercial registration 

E. List of officers and employees of the principal 

III. Registration of Japanese Principals at the POEA 

Agencies which are in the list of agencies authorized to recruit and deploy OPAs to Japan 

and would like to register their Japanese principals shall submit the following documentary 

requirements to POEA: 

A. Registration 

1. Verification certificate issued by the POLO 

2. Verified and authenticated Special Power of Attorney (SPA) issued in favor of 

the Philippine agency 

3. Verified and authenticated manpower request indicating the performance 

venue(s), positions, number of workers needed and salary. 

4. verified and authenticated commercial registration. 

5. Escrow agreement and bank certificate for the deposit of US$20,000, deposited 

in any commercial bank in the Philippines. 

B.Additional Job Order 

Request for Additional Job Order may be granted upon submission of a new manpower 

request indicating the performance venue(s), positions, number of workers needed and 

salary and a valid verification certificate from the POLO. 

C.Renewal of Registration of Principals 

The Registration may be renewed provided that the documents required for the initial 

registration are still valid and the principal has confirmed its intention to renew its registration 

with the concerned agency. An updated bank certificate of the escrow deposit shall 

also be required.

1628 


D.Dual Registration 

A Japanese principal of OPAs may be registered to a maximum of two (2) Philippine 

agencies, provided that: 

1. a uniform compensation package shall be adopted by the principal and the 

agency; 

2. The principal has a verified job order of at least 50 workers; or 

3. That the principal must have hired at least 50 workers within a period of one 

year immediately preceding the registration. 

E. Validity of Registration 

The validity of registration is four (4) years unless sooner revoked by the Administration, 

on any of the following grounds: 

1. Expiration of the principalís business license 

2. Upon written mutual agreement by the parties to preterminate the Agreement 

3. False documentation or misrepresentation in connection with the application for registration; 

and 

4. Final judgment in a disciplinary action against the foreign principal. 


that substantially meets the registration requirement. Substantial compliance refers to 

submission of verified SPA and manpower request and escrow agreement. 

IV. Standard Employment Contract 

The standard employment contract for OPAs bound for Japan shall include the following 

provisions, among others: 

A. Coverage in a health and hospitalization and death insurance at a minimum amount of Y3 

million for each of the risks insured. 

The insurance shall be obtained at the work site from an insurance entity duly recognized 

by the Japanese government. The insurance premium shall be the sole obligation of the 

employer and the beneficiary shall exclusively be the immediate heir of the insured. An 

insurance coverage for the worker, obtained in the Philippines, shall no longer be required. 

B. Minimum gross compensation of Y200,000 inclusive of a maximum deductible monthly 

food allowance of Y30,000 and a maximum to deductible accommodation allowance of 

Y30,000 and subject to authorized deduction for income tax at 20 per cent of the gross 

compensation. The workerís net compensation shall not be lower than Y100,000 per 

month. 

V. Requirements for the Processing of Employment Contracts by the POEA 

A. Recruitment Order (RO) 

B. Verified and authenticated individual employment contract indicating the employer, performance 

venue, among others. (A copy of the sample employment contract* is attached 

to this Circular). 


Quezon City.


C. Workerís information sheet 

D. Copy of artist record book (ARB) 

All previous issuances inconsistent herewith are deemed repealed. This Circular takes 

effect 15 days from its publication in a newspaper of general circulation. 





--o0o-- 


Registration and Processing of Fishermen Bound for Taiwan 

Pursuant to the new Rules and Regulations Governing the Recruitment and Employment 

of Seafarers, which provides that only licensed manning agencies may file an application for 

registration/accreditation of principals and in consonance with the thrust of the Administration 

to streamline its operational procedures, all transactions relating to the deployment of Filipino 

fishermen for Taiwan, which are presently handled by the Landbased Accreditation and 

Processing Center, shall be transferred to the Seabased Employment Accreditation and 

Processing Center (SBEC). 

Requests for accreditation of principal, fishing vessel enrolment, approval of positions 

and salary scale and processing of employment contracts shall be undertaken by the SBEC 

in accordance with the established procedures of the said office. 

This Circular shall be effective fifteen (15) days from its publication in a Philippine 







--o0o-- 

ADVISORY NO. 01, s. 2003 

New Visa Requirement for Seafarers Entering Australia 

Quoted hereunder is the Diplomatic Note from the embassy of Australia in Manila in 

connection with the new visa requirement for seafarers that shall take effect from 01 November 

2003:

1630 


ìFROM 01 NOVEMBER 2003, THERE WILL BE A STRICTLY ENFORCED 

REQUIREMENT FOR ALL CREW MEMBERS OF NON-MILITARY VESSELS 

THAT INTEND TO ENTER AUSTRALIA AS PART OF THEIR WORKING VOY- 

AGE TO CARRY A VALID PASSPORT AND A SEAFARERíS IDENTITY DOCU- 

MENT TO QUALIFY FOR A SPECIAL PURPOSE VISA (SPV) AND TO BE 

IMMIGRATION CLEARED ON ARRIVAL. 

THE SPV IS TO REMAIN A VISA GRANTED BY OPERATION OF LAW SO 

THERE WILL BE NO NEED FOR A FORMAL APPLICATION AND NO LA- 

BELS REQUIRED FOR EVIDENCING PURPOSES. 

THE TRANSIT VISA SUBCLASS 771 WILL CONTINUE TO APPLY FOR 

THOSE SEAFARERS COMING INTO AUSTRALIA BY PLANE TO JOIN A CREW 

OF A NON-MILITARY VESSEL. THE ONLY IMPACT THIS CHANGE WILL HAVE 

ON THOSE PERSONS IS THAT THEY WILL HAVE TO CARRY A PASSPORT 

ALONG WITH THEIR SEAFARERíS IDENTITY DOCUMENT FOR THE PUR- 

POSE OF QUALIFYING FOR AN SPV ON ARRIVAL. 

THERE WILL BE NO TRANSITIONAL ARRANGEMENTS AND ALL MEM- 

BERS OF CREW ENGAGING IN WORK IN AUSTRALIA ON 01 NOVEMBER 

2003 WILL BE REQUIRED TO HOLD BOTH A PASSPORT AND A 

SEAFARERíS IDENTITY DOCUMENT OR THEY WILL BE CLASSIFIED TO 

BE UNLAWFUL.î 






--o0o-- 


Intent to Participate in the Reconstruction Program for Iraq 




--o0o-- 

POEA Advisory No. 3, s. 2003 

Philippine Seafarers One-Stop Processing Center (PSOC)


Pursuant to Presidential Administrative Order No. 56, Series of 2003, the Department 

of Labor and Employment has put in place the PSOC that will house in one location the 

various government offices/agencies involved in providing the requisite documentation for 

seafarers in connection with their employment overseas. 

The POEA is therefore pleased to inform all concerned sectors that the PSOC shall 

conduct a dry-run of its operations starting Monday, 12 May 2003. The PSOC is located at 

the Ground Floor of the POEA Building, Corner EDSA and Ortigas Avenue, Mandaluyong 

City. All government agencies designated to form the PSOC shall provide their services 

Monday to Friday from 0800H to 1700H. 

The service to be provided by the respective agencies would include the processing 

and issuance of the following documents: 

1. Maritime Industry Authority (MARINA) - Seafarerís Identity and Record Book (SIRB) 

2. National Bureau of Investigation - NBI clearance 

3. Department of Foreign Affairs (DFA) - passpport 

4. National Statistics Office (NSO) - birth certificate 

5. Professional Regulation Commission (PRC) - marine deck and engineer officersí license 

and certificates of competency, 

6. National Telecommunication Commission (NATELCOM) - General Operatorís Certificate 

(GOC) 

7. Philippine Overseas Employment Administration (POEA) - employment contracts and 

Overseas Employment Certificates (OEC) 

8. Commission on Higher Education (CHED) - school credentialsí Certification, 

Authentication and Verification (CAV) 

In addition, the Technical Education and Skills Development Authority (TESDA) shall 

issue the application forms for assessment of ratings. The corresponding certificate of 

competency for ratings (forming part of navigational and engineering watches) shall be 

released at the PSOC upon successful completion of the assessment process. 

The assessment of skills of new entrant seafarers and processing and issuance of 

certificates of proficiency under Chapter V and VI of the 1978 STCW Convention, as amended, 

shall be undertaken by the Secretariat of the Maritime Training Council (MTC). 

Moreover, the following agencies shall provide membership information updates, 

registration for membership and other similar services: 

1. Overseas Workers Welfare Administration (OWWA) 

2. Social Security Systems (SSS) 

3. Philippine Health Insurance Corporation (Phil-Health) 

4. Home Mutual Development Fund (Pag-IBIG Fund) 

Information boards located at the lobby of the POEA building shall provide the necessary 

information and guidance for all concerned wishing to avail of the services of the PSOC. 

For information and guidance.

1632 







--o0o-- 


Clarification Re Employment Opportunities Arising 

from the Reconstruction Program for Iraq 




--o0o-- 

POEA Advisory No. 6, s. 2003 

Management Level Courses for Marine Officers 

The POEA wishes to announce the conduct of the Management Level Courses for 

Marine Officers this coming July, a joint project of the Maritime Training Council and the 

Philippine Maritime Education and Training Foundation (PMF)/IMTT. 

Initial conduct of courses in IMO Model Courses 7.01 (Master and Chief Mate) and 

7.02 (Chief Engineer and Second Marine Engineer Officer) shall be in the form of pilot 

classes and shall be free of charge to candidates. Completion of the course will enable the 

candidate to comply with the education and training requirements of the STCW ë95. 

Considering the shortage of senior marine officers in the internatioal labor market, the 

Philippine manning industry should take a conscious effort to ensure the adequate supply of 

Filipino officers in these capacities. 

The supply of Filipino master mariners, chief officers, chief engineers and second 

engineer officers could be assured if there is a continuing effort in the training of candidates 

for management level responsibilities. 

Under the STCW ë95, before marine officers at the operational level could be certificated 

to the management level positions, they should have completed the required education and 

training specified in the Convention. 

The manning sector is therefore enjoined to assist their pool of junior marine officers 

who are holders of STCW ë95 Certificate under Regulation II/1 or III/1, undergo the required 

training for certification at the management level.


Attached are the application forms, entry requirements and tentative schedule* of training. 

Accomplished forms should be submitted to MTC Secretariat, 6/F POEA Bldg. EDSA corner 

Ortigas Ave., Mandaluyong City. Training schedules are still subject to change. 

Further queries may be addressed to the said office thru telephone numbers 725-1323 

and 727-5716 (attention: Ms. Jo Magsalin or Ms. Mara Cuevas) or thru fax 725-1266 or email 

at info@mtc.gov.ph. 

For information and guidance. 




--o0o-- 


Registration of Seafarers as Overseas Absentee Voters 

Republic Act No. 9189 also known as ìTHE OVERSEAS ABSENTEE VOTING ACT OF 

2003î provides a vehicle under which Philippine citizens abroad, including Overseas Filipino 

Workers and Seafarers, can exercise their right to vote and participate in the election of the 

President, Vice-President, Senators and Party List Representatives. 

In this connection, the ship manning/seafaring sector is hereby informed of the 

COMELEC-COAV Advisory concerning the registration of seafarers as overseas absentee 

voters, a copy of which is hereto attached. 

The support and cooperation of all licensed manning agencies, seafarersí unions and 

other non-governmental organizations involved in the ship manning/seafaring industry are 

hereby enjoined to ensure the dissemination of information hereto provided. 




--o0o-- 

POEA ADVISORY NO. 10, s. 2003 

Travel Advisory on New Visa Rules of the US for Seafarers 

Effective 01 August 2003, the visa of seafarers shall be stamped by the US Embassy 

on the passport of the seafarer and no longer on the Seafarerís Identification and Record 

Book (SIRB). 



1634 


Personal appearance is also required for seafarers whose visas have expired for more 

than 12 months. Otherwise, applicants can use the drop box of the Embassy. 

In view of the new rules implemented by the US Immigration and Naturalization Service 

(INS) on visa issuance, manning agencies are advised to anticipate visa requirements and to 

submit visa applications of their seafarers to the US Embassy two months before their 

scheduled departure. When necessary, however, the US Embassy will accommodate urgent 

requests for visa applications. 

The US Embassy clarified that the Overseas Employment Certificate (OEC) of seafarers 

is not a requirement to get an appointment for visa interview. 






--o0o-- 


Guidelines on the Registration of Principals Hiring 

Immigrant-Workers and Documentation of Immigrant-Workers 

Further to Memorandum Circular No. 10 series of 2003, on the recruitment and placement 

activities of immigration consultancy agencies and other similar entities, the following guidelines 

are hereby issued: 

I. Registration of Foreign Principals/Employers 

1. Initial Registration 

The following documents shall be submitted for registration of the principal: 

a. Notarized Special Power of Attorney issued by the principal/employer to the agency; 

b. Manpower Request from the principal, stating the position and salary; 

c. Valid principalís business license or registration certificate or equivalent document; 

d. Master employment contract incorporating, among others, the minimum terms and 

conditions of employment. 

2. Validity of Registration of Principal 

The registration shall be valid for four (4) years, unless sooner revoked by the Administration, 

on any of the following grounds: 

a. Expiration of the principalís business license


b. Upon written mutual agreement by the parties to pre-terminate the agreement 

c. False documentation or misrepresentation in connection with the application for registration; 

and 

d. Final judgment in a disciplinary action against the foreign principal. 


that substantially meets the registration requirements. 

3. Open Registration 

The foreign principal/employer may be registered to more than one agency provided that 

the principal and the agency shall adopt a uniform compensation package. There shall be 

no minimum number of job order or minimum number of deployed workers that will be 

registered. 

4. Report to POLO on Registered Principals/Employers 

The Landbased Center shall furnish the Philippine Overseas Labor Office/Philippine Embassy, 

a listing of registered principals, on a quarterly basis, for purposes of monitoring 

and reference. 

II. Requirements for Issuance of Exit Clearance 

The following shall be submitted/presented to POEA as requirements for the issuance of 

exit clearance: 

a. Request for registration of immigrant-worker 

b. Individual employment contract/employment offer or equivalent document 

c. Information sheet 

III. Name Hiring 

The following requirements shall be submitted by the immigrant-worker requesting documentation 

through the name hire facility: 

a. Individual employment contract 

b. Visa or equivalent document 

The name hire shall be exempted from the medical examination requirement given the 

medical examination requirement by foreign embassies for immigrant visa holders. 

This Circular takes effect 15 days after publication in a newspaper of general circulation. 





--o0o--

1636 



Guidelines on the Transfer of Registration/Accreditation 

of Landbased Principals 

Pursuant to Section 10, Rule I, Part III of the POEA Rules and Regulations Governing 

the Recruitment and Employment of Landbased Overseas Workers and in order to further 

streamline the procedures and requirements on the revocation and transfer of registration/ 

accreditation of landbased principals/employers, the following guidelines are hereby issued: 

I. Coverage 

These guidelines shall apply to foreign placement agencies (FPs) and direct employers 

that have valid registration or accreditation with a Philippine recruitment agency (PRA). 

II. Requirements for Transfer of Registration/Accreditation 

a. Verified or notarized revocation of the Special Power of Attorney (SPA) granted by 

the principal to the former agent; 

b. Copy of revocation notice of principal to former agent; 

c. Copy of acknowledgment of notice of revocation by the former agent; 

d. Application letter or the new agent for the transfer of registration/accreditation, together 

with the requirements for registration/accreditation; 

e. Affidavit of assumption of responsibility for all contractual obligations of the principal to 

its workers originally recruited and processed by the former agency, by the transferee 

agent, if the principal is a foreign placement agency (FPA). 

III. Procedures on the Transfer of Registration/Accreditation 

a. Upon receipt of the requirements for transfer of registration/accreditation, the Administration 

shall favorably act on the transfer. 

b. In case the Administration receives a notice of objection on the revocation/transfer 

from the former agent prior to the action on the transfer, the Administration shall notify the 

principal accordingly. 

c. Once the Administration is informed by the principal and the former agent that the 

problem has been settled, the Administration shall proceed with the transfer of accreditation/registration. 

d. In case the principal contests the former agencyís allegation, the matter is referred to 

the POEA Legal Counsel for conciliation. 

IV. Conciliation of Claims 

Claims for money or enforcement of obligations arising out of business relations between 

principals and their existing Philippine agencies may be conciliated by the Administration. 

However, the pendency of the conciliation shall not prevent the Administration 

from acting on the request for registration or accreditation if the public interests so requires 

and the applicant meets all the requirements for registration or accreditation. If no 

compromise or amicable settlement is reached during the conciliation proceedings, the 

parties are free to ventilate their claims before the proper forum.


All previous issuances inconsistent herewith are deemed repealed. This Circular shall 

take effect 15 days after its publication in a newspaper of general circulation. 





--o0o-- 


Guidelines on the Contracts e-Submission 

System for Landbased Recruitment Agencies 

Pursuant to the e-Link for OFWs Project of the Department of Labor and Employment 

and the thrust of the Administration to streamline processes and documentary requirements 

in order to facilitate the mobilization of overseas Filipino workers, the Contracts e-Submission 

System shall be implemented for the Landbased Center in accordance with the following 

guidelines: 

I. Coverage 

All agencies that are registered by the Administration as participants in the Contract e- 

Submission program after complying with the following requirements: 

HARDWARE Pentium 4 Class (1.8 Gz) 

256MB RAM 

8MB Video RAM 

SVGA Monitor 

40 GB Standard IDE 

Drive Storage 

Operating System Software Windows 2000 

Windows XP (Home or Professional) 

Network Stable Internet Connection 

UPS At least two-minutes power to allow proper 

shutdown 

Personnel IT personnel/team/unit 

The POEA shall provide the agency participant with a copy of the POEA PEACE CD 

Installer and a copy of the registration/accreditation database of the agencyís principals. 

Upon registration as participant in the program, the agency mailbox is created and maintained 

in a hosting service located at the programís data center. 

II. Procedures for the Electronic Submission of Requests for Processing

1638 


1. Agency encodes the request for processing, contract particulars and information sheet 

of the workers. 

2. Agency submits the encoded data to POEA through the internet. 

3. POEA automatically downloads data and posts the same to the POEA contract processing 

database. 

4. POEA electronically notifies the agency of the result of posting. 

5. Agency receives the notification from POEA which indicates the RFP number. 

6. Agency fills up the e-Submit Form and presents this to the assessment counter at the 

Landbased Center. 

7. Agency representative pays the assessed amount at the cashier counter at the 

Landbased Center. An e-Receipt is issued which serves as the workerís exit clearance. 

8. Verified individual employment contracts of overseas performing artists for Japan and 

household workers for any country shall be presented at the POEA counter for stamping 

and signature by the designated officer prior to assessment and payment of fees. 

III. Employment Contracts of Workers 

In accordance with section 1, Rule III, Part III of the POEA Rules and Regulations Governing 

the Recruitment and Employment of Landbased Overseas Workers, recruitment 

agencies shall be responsible for providing every worker with a copy of his employment 

contract. The individual employment contract is based on the master employment contract 

approved upon registration/accreditation of the principal/employer. The worker shall present 

his contract at the Labor Assistance Center upon request. 

All master employment contracts approved by the Landbased Center upon registration of 

the principal shall be endorsed to the Central Records Division of the Administration for 

file and reference. 

IV. Participation Cost 

A minimal cost for maintenance of the hosting services of the agencyís mailbox shall be 

charged to agencies availing of the e-Submission system. 

V. Participants in the e-Submission program may still avail of the present system and 

procedure for the processing of worker documents and issuance of exit clearance in 

case technical problems are experienced by the e-Submission system. 

The Guidelines shall be effective fifteen days (15) after publication in a newspaper of 




Administrator


PHILIPPINE PORTS AUTHORITY 


PPA Memorandum Circular No. 16-2003 

Amending the Reckoning Point of the Free Storage Period for 

Outbound Domestic Cargoes under PPA Memorandum 

Circular Nos. 07-94 and 03-95 

In order to remove any ambiguity in the application of the free Storage Periods for 

outbound domestic cargoes, the following amendments are hereby made on the pertinent 

provisions of the above-named PPA circulars, as follows: 

1. Section C, Paragraph 12, Sub-paragraph d of PPA Memorandum Circular No. 07-94, 

dated 09 March 1994, henceforth shall read as follows: 

e. Domestic Cargo Entering any port Two (2) calendar days after the date 

of cargo entry into the port. 

2. Section G, Paragraph 2.2.4 of PPA Memorandum Circular No. 03-95, dated 05 January 

1995, henceforth shall read as: 

2.2.4 Outbound Domestic Cargoes - Two (2) calendar days after the date of 

cargo entry into the port. 

This Memorandum Circular shall be publised twice in a newspaper of general circulation 

and shall take effect fifteen (15) days after publication. 

This Memorandum Circular shall remain in full force and effect until otherwise revoked 

by competent authority. 



(SGD.) ALFONSO G. CUSI 

General Manager 

--o0o-- 


Applicable RO-RO Tariff Rates for the Strong 

Republic Nautical Highway (SRNH) 


U.P. Law Complex, Diliman, Quezon City.

1640 





--o0o-- 


Amendment to PPA Memorandum Circular No. 27-2002 Entitled 

ìGuidelines in the Collection of Port Charges and Cargo 

Handling Charges for Domestic Operationsî 




--o0o-- 

PPA Memorandum Order No. 11-2003 

Submission of Notice of Arrival and Application for Berth/Anchorage 

In view of the implementation of the PPA MIS Computerization Project, the submission 

of the modified Notice of Arrival and the Application for Berth/Anchorage shall be strictly 

enforced with the following supplemental guidelines: 

1. Notice of Arrival 

1.1 The Notice of Arrival (NOA) required in Sections 4 and 5 of PPA Admin Order No. 

13-77 shall be properly prepared using the prescribed format in Attachment ìA*î and 

following the ìGeneral Instructions*î for its preparation. 

1.2 The NOA shall be submitted to the Port Management Office (PMO) or Terminal 

Management Office (TMO) concerned at least 48 hours prior to vessel arrival or before 

any delivery of cargo inside the port for loading. 

1.3 A separate ìCrew Listî may be attached to provide detailed information about the 

crew of the vessel. 

1.4 For a vessel on its maiden voyage, the NOA shall be accompanied with the Vessel 

Information Sheet and Vessel Certificate and such maiden voyage shall be properly indicated 

in the NOA. 

1.5 The NOA shall not be construed as the Application for Berth/Anchorage (ABA) 




2. Application for Berth/Anchorage 

2.1 The Application for Berth/Anchorage (ABA) shall be submitted as required in Section 

29 of PPA Admin Order No. 13-77. 

2.2 The ABA shall be properly prepared using the prescribed format provided in Attachment 

ìB*î and following the ìGeneral Instructionsî for its preparation. 

2.3 The ABA shall be submitted to the PMO or TMO concerned at least 24 hours for 

vessels with scheduled runs and 36 hours for tramping vessels. However, the ABA may be 

filed by concerned parties within sufficient time. 

For guidance and strict compliance. 




General Manager 

--o0o-- 

PPA Memorandum Order No. 12-2003 

Submission of Supplementary Vesselís Manifest 

To provide uniform implementation on the submission of Amended Supplementary 

Manifest by all shipping companies or its against, the following guidelines shall apply: 

1. The preparation and submission to the Port Management Office (PMO) or Terminal 

Management Office (TMO) of the required amended or supplementary vesselís manifest by 

shipping companies or its agents shall be strictly implemented. 

2. The amended manifest shall be submitted at least 24 hours after the actual departure 

of the vessel from port. 

3. The amended manifest shall contain the accurate details and particulars of actual 

volume of cargoes loaded and passengers embarked onto a vessel, as prescribed by the 

Authority. 

For guidance and strict compliance. 




--o0o-- 



1642 



1. Authority 


Certificate of Creditable Tax Withheld at Source - BIR Form No. 2307 

Republic Act No. 8424 

BIR Revenue Regulations No. 2-98 

2. Coverage 

All port users who are required by law to deduct and withhold taxes by virtue of Republic 

Act No. 8424 and Section 2.58(B) of BIR Revenue Regulations No. 2-98 shall be covered 

by this Circular. 

3. Guidelines 

3.1 All taxes withheld by a port user-withholding agent shall be supported by the corresponding 

Certificate of Creditable Tax Withheld at Source or BIR Form No. 2307. 

3.2 BIR Form No. 2307 shall be submitted to the PPA Cashier at the terminal together 

with the cash or check payment, as provided in said law which states: 

ìx x x Upon request of the payee, however, the payor must furnish such statement 

to the payee simultaneously with the income payment.î (Underscoring ours) 

3.3 Failure to submit the Certificate may be used as ground to hold the release of the 

cargo due to insufficient payment. 

3.4 Without the Certificate, the payment shall be applied to the invoice and the balance 

will still be collectible from the port user. 

4. Effectivity 

This Memorandum Circular takes effect fifteen (15) days after publication in a newspaper 

of general circulation. 





--o0o-- 

PPA Administrative Order No. 03-2003 

Clarifying Paragraphs 3.1.1 and 6 of PPA Administrative Order 

No. 02-2003 entitled ìImplementing Guidelines on the Implementation 

of MARPOL 73/78 for Shore Reception Facilities (SRF)î


It is hereby clarified that paragraph 3.1.1 of PPA Administrative Order No. 02-2003, 

which pertains to the areas covered by the operation, shall apply only to baseports and 

private ports. 

It is further clarified that the Schedule of Fees, paragraph 6 of said Order, shall be as 

follows: 

______________________________________________________________________________________________ 

TYPE AND CLASSIFICATION Fixed fee (covers the Additional Fee 

OF VESSEL collection of 0.4 cu m -----------------------------------------------------or 

less of garbage Excess Garbage Oily Waste and NLS 

______________________________________________________________________________________________ 

DOMESTIC 

1 Passenger ferry regardless of Php 30 /call Php 30/cu.m. Php 1,300 /cu. m. 

GRT, that calls at base and private 

port for more than once a day 

1 Passenger/cargo vessel from Php 30 /call Php 30/cu. m. Php 1,300 /cu. m. 

7 GRT to 400 GRT 

1 Passenger/cargo vessel of Php 150 /call Php 150/cu. m. Php 1,300 /cu. m. 

401 GRT - 1000 GRT 

1 Passenger/cargo vessel of 

1001 GRT and above Php 500 /call Php 450 /cu. m. Php 1,500 /cu. m. 

FOREIGN 

1 1000 GRT and below Php 1,700 /call Php 550 /cu. m. Php 1,500 /cu. m. 

1 1001 GRT and above Php 5,000 /call Php 550 /cu. m. Php 1,500 /cu. m. 

______________________________________________________________________________________________ 

All other provisions of PPA Admin. Order No. 02-2003 which are consistent herewith 

shall remain binding and effective. 

This Order shall take effect 15 days after its publication in newspapers of general 

circulation. 




General Manager, Philippine Ports Authority 

--o0o-- 

Operations Memorandum Order No. 04-2003 

Shore Reception Facilities (SRF) Commencement of Operation 

The International Convention on the Prevention of Pollution by Ships, 1973, as amended 

in 1978, MARPOL 73/78 for brevity, has been ratified by the Philippine Government; and as 

per the International Maritime Organization (IMO), the Convention took effect in Philippine 

jurisdiction on 15 September 2001. As a matter of policy, member-countries advised the 

ships carrying the flag of their respective states that the Philippine government would be 

providing SRF in ports purposely to collect shipsí generated wastes.

1644 


Complaint with this international requirement and in support of the governmentís program 

to protect the marine environment, the Philippine Ports Authority issued Administrative Order 

No. 02-2003 entitled ìGuidelines Implementing the Requirements of MARPOL 73/78î. A 

contractor, which was selected through a public bidding, shall provide such facilities and 

perform the related services. 

In view thereof, the contractor, Golden Dragon International Terminals, Inc., shall 

commence their 1st phase of operations in the Ports as listed in the attached schedule. The 

Port Management Office shall, consequently, inform the port users in their area of jurisdiction 

of their operations. Furthermore, all concerned are advised to comply with the provisions of 

PPA AO No. 02-2003, copy of which is likewise attached. 


(SGD.) BENJAMIN B. CECILIO 

Assistant General Manager for Operations 

PROFESSIONAL REGULATION COMMISSION 



BOARD OF ACCOUNTANCY 

Resolution No. 07, s. 2003 

Extending the Effectivity Date of Certain Statements and 

Philippine Standards on Auditing (PSAs) of the Auditing 

Standards and Practices Council (ASCP) 




--o0o-- 



Adoption of the Philippine Standards on Auditing (PSA) 520 ñ 

Analytical Procedures 







--o0o-- 



Adoption of the Philippine Standards on Auditing 

(PSA) 610- Considering the Work of Internal Auditing 





--o0o-- 




Engagement on Agreed-Upon Procedures 





--o0o-- 




Engagements to Review Financial Statements* 




--o0o--

1646 





Adoption of the Philippine Auditing Practice Statement 

(PAPS) 100 ñ Inter-Bank Confirmation Procedures 





--o0o-- 


Resolution No. 14, s. 2003 

Adoption of the Philippine Standards on 

Auditing (PSA) 500 ñ Audit Evidence 





--o0o-- 




Audit Evidence ñ Additional Considerations on Specific Items 




--o0o-- 




Engagements to Compile Financial Information






--o0o-- 

Board of Accountancy 


Adoption of the Statement of Financial Accounting Standards (SFAS) 

26/International Accounting Standard (IAS) 26 ñ ìAccounting and 

Reporting by Retirement Benefit Plans, As Part of the Generally 

Accepted Accounting Principles in the Philippines 






--o0o-- 




Audit Sampling and Other Selective Testing Procedures 




--o0o-- 



Adoption of the Statement of Financial Accounting Standards (SFAS) 

12/International Accounting Standard (IAS) 12 ñ ìIncome Taxesî, 

As part of the Generally Accepted Accounting Principles in the Philippines 



1648 




--o0o-- 



Adoption of the Philippine Auditing Practice Statement (PAPS) 1009 ñ 

Computer-Assisted Audit Techniques 






--o0o-- 




(PAPS) 1010 ñ The Consideration of Environmental Matters 

in the Audit of Financial Statement 




--o0o-- 




The Relationship Between Bangko Sentral ng Pilipinas (BSP) 

and Bankís External Auditors 

Adopted: 02 June. 2003 



--o0o--







(PSA) 550 ñ Related Parties 





--o0o-- 




Using the Work of Another Auditor 




--o0o-- 




Electronic Commerce ñ Effect on the Audit of Financial Statements 





--o0o-- 




Communications of Audit matters with those Charged with Governance

1650 







--o0o-- 




Audit of Accounting Estimates 





--o0o-- 




(PSA) 580 ñ Management Representations 





--o0o-- 




The Examination of Prospective Financial Information 



--o0o--







External Communications 




--o0o-- 




Auditing Derivative Financial Instruments 






--o0o-- 

Board of Accountancy 



Assurance Engagements 




--o0o--

1652 


BOARD OF AGRICULTURAL ENGINEERING 


Adopting the Philippine Agricultural Engineering Standards, Volume 11, 

Series of 2002 and Prescribing it as Additional Code of Technical 

Standards for the Practice of Agricultural Engineering 

Adopted: 14 Apr. 2003 




óo0oó 



Adopting the Philippine Agricultural Engineering Standards, Volume 111, 

Series of 2002 and Prescribing it as Part of the Technical Standards 

for the Practice of Agricultural Engineering 





óo0oó 



Adoption and Promulgation of the Philippine Agricultural Engineering 

Code on Agricultural Buildings and Endorsing the Same to the Secretary 

of the Department of Public Works and Highways for his Approval as 

a Referral Code of the National Building Code of the Philippines 





óo0oó


BOARD OF CIVIL ENGINEERING 


Adoption of the Fifth Edition of the National Structural Code of the 

Philippines 2001, Volume 1 - Buildings, Towers and Other Vertical 

Structures, Prepared by the Association of Structural Engineers of the 

Philippines as Part of the Rule and Regulations Governing the 

Practice of Civil Engineering in the Philippines 

WHEREAS, the Board of Civil Enginering, on September 28, 1987, issued Resolution 

No. 131, Series of 1987 (approved by the Professional Regulation Commission) adopting the 

Third Edition of the National Structural Code of the Philippines, Volume I - Buildings and 

other Vertical Structures, as part of the rules and regulations governing the practice of Civil 

Engineering in the Philippines; 

WHEREAS, the Board of Civil Engineering, on June 25, 1992 issued Resolution No. 

17, Series of 1992 (approved by the Professional Regulation Commission) adopting the 

Fourth Edition of the National Structural Code of the Philippines, Volume I - Buildings, Towers, 

and Vertical Structures, as apart of the rules and regulations governing the practice of Civil 

Engineering in the Philippines; 

WHEREAS, the Association of Structural Engineers of the Philippines, came out with 

the Fifth Edition of the National Structural Code of the Philippines, Volume I - Buildings, 

Towers and Other Vertical Structures; 

WHEREAS, Section 4, paragraph 2 of Republic Act No. 544 (Civil Engineering Law) 

vests upon the Board of Civil Engineering, with the approval of the Professional Regulation 

Commission, the power to issue such rules and regulations as may be deemed necessary to 

carry out the provisions of the said law; 

WHEREAS, Section 9, paragraph (a) of Republic Act 8981 (PRC Modernization Act of 

2000) vests upon the Board of Civil Engineering the power to regulate the practice of the civil 

engineering profession in accordance with the provisions of R.A. No. 544; 

WHEREFORE, by virtue of the foregoing premises, the Board of Civil Engineering 

RESOLVED, as it hereby RESOLVES, to adopt the Fifth Edition of the National Structural 

Code of the Philippines, Volume I - Buildings, Towers and Other Vertical Structures, prepared 

by the Association of Structural Engineers of the Philippines, as part of the Rules and 

Regulations governing the practice of Civil Engineering in the Philippines. 

The herein Resolution, upon approval by the Professional Regulation Commission, 

shall take effect after fifteen (15) days following the publication thereof in the Official Gazette 

or any newspaper of general circulation whichever is earlier. 


(SGD.) ANGEL L. LAZARO III, Ph.D 

Chairman

1654 


(SGD.) APOLLO S. ENRIQUEZ (SGD.) PEDRO ADONIS D. COMPENDIO 

Member Member 

ATTESTED BY: 

(SGD.) CARLOS G. ALMELOR 

Secretary 

Professional Regulatory Boards 

APPROVED: 

(SGD.) ANTONIETA FORTUNA-IBE 

Chairperson 

(SGD.) AVELINA DELA REA-TAN (SGD.) LEONOR T. ROSERO 



óo0oó 

BOARD OF ELECTRICAL ENGINEERING 

Resolution No. 36, s. 2002 

Guidelines for the Implementation of Section 25, Article III of R.A. No. 7920 

Otherwise Known as the ìNew Electrical Engineering Lawî 

(Re: Integration of the Electrical Engineering Professions) 

WHEREAS, Section 25, Article III of R.A. No. 7920 provides that ìEvery professional 

electrical engineer, registered electrical engineer and registered master electrician upon 

registration with the board as such, ipso facto, becomes a member of the integrated national 

organizationî. 

WHEREAS, notwithstanding their registration under Section 42, Article V of R.A. No. 

7920, Professional Electrical Engineers, Registered Electrical Engineers and Registered 

Master Electricians have not become members of the Institute of Integrated Electrical Engineers 

of the Philippines, Inc. (IIEE), the accredited integrated association of Electrical Engineering 

professions (Professional Electrical Engineer, Registered Electrical Engineer and Registered 

Master Electrician) pursuant to Resolution No. 616 issued by the Commission on May 25, 

1999. 

WHEREFORE, the Board resolved as it hereby resolves to adopt the following guidelines 

for the integration of all Professional Electrical Engineers, Registered Electrical Engineers 

and Registered Master Electricians into one national organization by becoming members of 

the IIEE: 

SECTION 1. To insure the effective implementation of Section 25, Art. III of 

R.A. No. 7920, which provides for the integration of the Electrical Engineering 

professions, every professional electrical engineer, registered electrical engineer 

and registered master electrician who registered as such pursuant to Sec. 42 of 

R.A. No. 7920, has been ipso facto member of the integrated national organization 

of the electrical engineering professions and, as such, shall be required, for 

the renewal of their respective professional licenses/identification cards, to present


the official receipt of payment of membership fee or certification of payment of 

membership fee duly issued or signed by the authorized officer of the IIEE. 

SEC. 2. All successful examinees in licensure examinations for the electrical 

engineering professions (professional electrical engineer, registered electrical 

engineer and registered master electrician) shall, before issuing their respective 

Certificates of Registration/Professional Licenses and Identification Cards, be 

required to present the official receipt of payment of membership fee or certification 

of payment of membership fee issued or signed by the authorized officer of 

the IIEE. 

This Resolution shall take effect after fifteen (15) days following its publication in the 

Official Gazette or in a newspaper of general circulation in the Philippines, whichever is 

earlier. 

Let copies of this Resolution be furnished the National Officials and Local Chapter 

Officials of the IIEE for their information and guidance. 


(SGD.) RODOLFO R. PE—ALOSA 

Chairman 

(SGD.) ANTONIO C. CORONEL (SGD.) EDWARD L. MENDOZA 

Member Member 

ATTESTED BY: 


Secretary 

Professional Regulatory Boards 

APPROVED: 


Chairperson 

(SGD.) AVELINA DELA REA-TAN (SGD.) ALFONSO G. ABAD 



--o0o-- 

BOARD OF FISHERIES 


Resolution Adopting and Promulgating a Code of Ethics for 

Fisheries Technologists and a Code of Professional Standards 

for the Practice of the Fisheries Profession 

WHEREAS, one of the powers and functions of the Board of Fisheries created by the 

Professional Regulation Commission under Resolution No. 2000-664, pursuant to its authority


provided in Section 115 of R.A. No. 8550 known as the ìFisheries Code of 1998î is to adopt 

a ìCode of Ethics for Fisheries Technologistsî and a ìCode of Professional Standardsî for 

the practice of the Fisheries profession. 

WHEREAS, the Board of Fisheries which is called upon to adopt the said Codes 

conducted consultations and dialogues with the accredited professional organization of 

Fisheries Technologists, other associations of Fisheries Technology and a Code of Ethics 

for Fisheries Technologists, as follows: 

Article I 

PREAMBLE 

The Fisheries technologists or fisheries professionals are the mainstay in fisheries and 

aquaculture research; the molders of the mind and developers of expertise of future fisheries 

technologists; managers and middle managers of fisheries agencies and institutions in 

public and private sectors; assistants and related activities in fisheries; and owners or operators 

of fisheries businesses and enterprises. They, therefore, heavily influence and contribute to 

knowledge in fisheries through R & D, S & T, policy-making, regulatory measures, protection 

and conservation of the aquatic ecosystems; integration of fisheries and aquaculture, planning 

and management as integral parts of the ecosystem; and the direction of development of 

fisheries and related areas. Fisheries technologists have a heavy responsibility and 

accountability to the nation on how fisheries develop and are made sustainable resources for 

food security and for exports to other countries. Their conduct and standards of 

professionalism should be beyond reproach and acceptable among the people and their 

peers in the fisheries profession. 

These Code of Ethics and Code of Professional Standards provide the basis of quality 

and acceptable practice of the fisheries profession and are guides to be followed by all 

fisheries techologists in the practice of the profession. Fisheries Technologists should adhere 

to basic principles as follows: 

1. Sustained and optimized development of fisheries and aquaculture resources and of 

proper conservation and management of the environment. This basic principle is to be 

followed and promoted in the practice of the fisheries profession such as in policy-making, 

legal and regulatory measure, teaching, research, feasibility studies, consultancy, report 

writing and others. 

2. Effective and proper conservation and management of aquatic ecosystems and living 

aquatic resources and the protection and rehabilitation of critical aquatic habitats such as 

mangroves, coral reefs, sea-grasses and others. 

3. Proper maintenance of biological diversity and sustainability of fisheries resources for 

the present and future generations following the policies on poverty alleviation, food security 

and environmental protection. 

4. Protection of the rights of fisher-folk, especially municipal fisher-folk, in the preferential 

use of municipal waters and public lands for fishery purposes as provided in the Constitution 

and Fisheries Code of 1998 (R.A. No. 8550).


5. Integration of the management and conservation of fisheries resources and aquaculture 

with integrated coastal management (ICM) to ensure minimized conflicts of multiple resource 

uses and environmental protection of the aquatic ecosystems. 

6. Minimization or reduction of wastes in the catching, culturing, processing and marketing 

of fish and fishery products through efficient and effective post-harvest technology. 

7. Development of new fisheries and aquaculture technology should always consider the 

conservation and protection of the ecosystem and its environment and sustainable use of 

the technology. 

Article II 

CODE OF PROFESSIONAL STANDARDS 

(For the practice of the Fisheries Profession) 

SECTION 1. The Professional Standards - As professionals, it is expected that fisheries 

technologists must adhere to a Code of Professional Standards that will support the above 

Preamble. Fisheries Technology is an honorable profession regulated by the rules and 

regulations as provided in Professional Regulation Commission Resolution No. 2000-664, 

and of the Board of Fisheries Resolution No. 2002-01; hence, a Fisheries Technologist shall 

always consider the following precepts in the practice of his/her profession; 

1. Honesty and integrity of a professional command respect especially from among his 

peers in the fisheries profession; 

2. The best scientific basis must be taken into acccount in conservation, management and 

exploitation of living aquatic resources for the protection of the aquatic environment. 

3. Harvesting, handling, processing and marketing of fish and fishery products should ensure 

nutritional value, quality and safety of products, wastage reduction, and environmental 

conservation. 

4. Proper citation and acknowledgment of sources of data and information shall be done at 

all times in the wirting of reports, proposals, and research/technical papers to avoid being 

accused of plagiarism. 

5. Exploitation and access to the fisheries and aquatic resources of the Philippines for the 

exclusive use and enjoyment of Filipino citizens should be limited and regulated to prevent 

harvests beyond biological limits of the fish stocks. 

6. The use of natural waters (inland and marine) for aquaculture should be regulated and 

limited to prevent loading said waters beyond their capacity to absorb organic load and 

pollution that will cause mass kills of aquatic organisms and fishes. 

7. Use appropriate technology and research results that promote sustainability of the resource 

in projects and activities in fisheries. 

8. Promote public awareness of responsible fisheries through education and training. 

9. Ensure active participation and involvement of fisheries and fish-farmers in the planning,

1658 


policy formulation and implementation of fisheries conservation and resource management. 

10. Unavailability of data is not a reason for inaction in fisheries conservation and management. 

The ìprecautionary principleî should be applied. 

11. Rendition of fair and efficient service should not be discriminating and should be free 

from graft and corruption especially in the government service. 

12. Be responsive to the needs of all sectors of fisheries and must have a strong commitment 

to public interest. 

SEC. 1. Professional Life - 

Article III 

CODE OF ETHICS 

a. A Fisheries Technologist should discharge his/her duties with absolute fidelity and act at 

all times with fairness and impartiality to all, having due regard to public interest and 

welfare. 

b. A Fisheries Technologist should uphold the honor and dignity of his/her profession and, 

should therefore, avoid association with any person or enterprise in fisheries with questionable 

character or business operations. 

c. A Fisheries Technologist should strive hard to upgrade his/her knowledge and skills of the 

profession to give the best service to the public. 

d. A Fisheries Technologist should have due regard, at all times, to the safety of the life and 

health of his/her employer, employees and other co-workers. 

e. A Fisheries Technologist should endeavor to disseminate to the public knowledge of fisheries 

and shall not spread or preach untrue, unfair and exaggerated statements regarding 

fisheries. 

SEC. 2. Relation with Client and/or Employer - 

a. A Fisheries Technologist should be fair, reasonable and just in rendering professional 

services to his/her clients, employers and contractors. 

b. Before engaging or entering into contracts which call for his/her professional service that 

will require or need the use of apparatus or equipment in which he/she has financial 

interest, the Fisheries Technologist must clarify such situation in the contract or agreement 

to avoid conflict of interest. 

c. A Fisheries Technologist should promptly disclose to his/her client or employer his/her 

interest in business that may be in conflict with or affect his decision or work for which he/ 

she is employed or for which he/she maybe called upon to perform.


d. A Fisheries Technologist at work should be vigilant in guarding against condition/s that 

maybe dangerous or threatening to life, health or property for which he/she is responsible 

and should promptly bring such conditions to the attention of those responsible thereto. 

e. A Fisheries Technologist should present clearly known or possible consequences or limitations 

of the work for which he/she is responsible and should honestly advise his/her 

client or employer to engage the services of experts/specialists and cooperate with said 

experts and specialists in the interest of his/her client or employer. 

f. A Fisheries Technologist should not divulge confidential matter or information which comes 

to his/her knowledge concerning the affairs of his/her client or employer without their 

consent. 

SEC. 3. Relation with Fellow Fisheries Technologists - 

a. A Fisheries Technologist should at all times strive to protect the Fisheries Profession 

against misrepresentation, disinformation, distortion and unfair criticism. 

b. A Fisheries Technologist should always live-up to the standards of the practice of the 

profession. 

c. A Fisheries Technologist should not directly or indirectly injure the professional reputation, 

prospects or practice of his/her fellow Fisheries Technologists. 

d. Fisheries Technologists should not compete with one another on the basis of compensation 

or remuneration for a particular work by means of underbidding or other unfair 

practices but on the basis of skills and technical competence. 

Article IV 

Reportage and Penal Provisions 

SECTION 1. Reportage - A Fisheries Technologist is required to report violations of 

provisions of this Code to the Board of Fisheries for investigation and proper action to 

protect and maintain proper ethics and standards in the practice of the fisheries profession. 

SEC. 2. Penalty - Violation of any provision of these Codes shall constitute 

unprofessional, unethical and dishonorable conduct and shall be meted with appropriate 

penalty by the Board. 

Article V 

Effectivity 

These Codes shall take effect upon approval by the Commission and after fifteen (15) 

days following its publication in the Official Gazette or in a newspaper of general circulation 

in the Philippines. 


(SGD.) ROGELIO O. JULIANO 

Chairman


(SGD.) ASTERIO P. SALIOT (SGD.) CESARIO R. PAGDILAO 

Member Member 

ATTESTED: 


Secretary, Professional Regulatory Boards 

APPROVED: 


Chairperson 

(SGD.) ALFONSO G. ABAD (SGD.) AVELINA DE LA REA-TAN 



--o0o-- 

BOARD OF GEODETIC ENGINEERING 


Adoption of a Code of Ethical and Professional Standards for the 

Practice of the Geodetic Engineering Profession 

WHEREAS, one of the powers and duties of the Board of Geodetic Engineering provided 

in Section 8 (I) of R.A. No. 8560 known as the Philippine Geodetic Engineering Act of 1998 

is ì[T]o prescribe and/or adopt a Code of Ethical and Professional Standards for the practice 

of Geodetic Engineering profession; 

WHEREAS, upon request of the Board of Geodetic Engineering, the GEP Board of 

Governors drafted a Code of Ethical and Professional Standards for the practice of Geodetic 

Engineering profession; 

WHEREAS, the Geodetic Engineers of the Philippines, Inc. (GEP) in its Resolution No. 

02-03-01-E Series of 2000-2001 recommend to the Board of Geodetic Engineering the 

adoption of the Code of Ethical and Professional Standards for the practice of the Geodetic 

Engineering profession prepared by a Committee composed of past Presidents of the GEP. 

WHEREAS, the Board of Governors of GEP after reviewing the draft code approved 

the same and submitted to the Board of Geodetic Engineering for adoption. 

WHEREAS, the Board of Geodetic Engineering also reviewed the Code as proposed 

by the GEP and finds the same to have been carefully crafted as it provides adequate 

safeguards that will protect not only the clients but also the geodetic engineering practitioners, 

apart from infusing principles that will maintain professional standards for the practice of the 


WHEREFORE, the Board Resolved as it hereby Resolves to adopt the attached document 

denominated as ìCode of Ethical and Professional Standardsî for the practice of the Geodetic 

Engineering Profession marked as Annex ìAî and made an integral part of this Resolution.


This Code of Ethical and Professional Standards for the practice of the Geodetic 

Engineering profession shall govern the practice of all registered Geodetic Engineers in the 

Philippines. 

This Resolution and the Code of Ethical and Professional Standards for the Practice of 

Geodetic Engineering appended thereto shall take effect after fifteen (15) days following its 

publication in the Official Gazette or in a newspaper of general circulation in the Philippines, 

whichever is earlier. 


(SGD.) HERMINIO S. PADA 

Chairman 

(SGD.) BENJAMIN O. MINDAJAO (SGD.) MARCELINO A. MALATE 

Member Member 

ATTESTED: 


Secretary, Professional Regulatory Board 

ANNEX A 

APPROVED: 


Chairperson 

(SGD.) AVELINA DELA REA-TAN 

Commissioner 

CODE OF ETHICAL AND PROFESSIONAL STANDARDS FOR THE GEODETIC 

ENGINEERING PROFESSION 

Section 1. Rationale. Pursuant to Section 8 (i), Article III of RA 8560 otherwise known 

as the Philippine Geodetic Engineering Act of 1998, the following Code of Ethical and 

Professional Standards for Geodetic Engineering is hereby adopted: 

Section 2. A geodetic engineer and junior geodetic engineer shall: 

a) In all HUMILITY, always recognize the CREATOR as the source of the light that 

illuminates his professional path and the force that leads to the attainment of his objective; 

b) Always be possessed with the highest standards of INTEGRITY, HONESTY and COM- 

PETENCE in rendering professional service to his client. 

It will be considered unethical for him to: 

1. Act for his client or employer in professional manners than as faithful agent or trustee; 

2. Charge his client or employer any remuneration other than his stated professional 

charges for services rendered in accordance with their contract of services;

1662 


3. Take advantage for a fee of his authority to practice as geodetic engineer or junior 

geodetic engineer in the execution of geodetic engineering work not done by him personally 

or executed under his direct supervision; 

4. Take advantage of the ignorance, credibility, or confidence of his clients or employers 

and other persons with whom he deals; and 

5. Act in any manner or engage in any practice which will tend to discredit the honor and 

dignity of the geodetic engineering profession. 

c) Always be FAIR in his dealing with his colleagues in the profession and other professions. 


1. Cause injury maliciously, directly or indirectly to the good name, the professional reputation, 

prospect or business of another geodetic engineer or junior geodetic engineer; 

2. Attempt to supplant another geodetic engineer or junior geodetic engineer after definite 

steps have already been taken towards the latterís employment; 

3. Underbid another geodetic engineer or junior geodetic engineer by reducing his usual 

rate after knowing the rate offered by the other geodetic engineer or junior geodetic 

engineer; 

4. Advertise in self-laudatory language, or in other manner derogatory to the dignity of the 

profession; 

5. Hire the employee or employees of a fellow geodetic engineer or junior geodetic engineer 

without the prior knowledge or consent of the latter; 

6. Review the work of another geodetic engineer or junior geodetic engineer for the same 

client except with the knowledge or consent of said geodetic engineer or junior geodetic 

engineer or unless the contract of said geodetic engineer or junior geodetic engineer with 

said client has been terminated formally; and 

7. Criticize publicly a geodetic engineer or junior geodetic engineer in connection with a 

job he has done; 

8. To use the advantages of being a salaried employee to compete unfairly with the geodetic 

engineers or junior geodetic engineers in private practice. 

d) Always be LAW-ABIDING, therefore observing and following the prescribed rules and 

regulations of the profession and those of other laws that affect directly or indirectly the 

practice of the profession. 


1. Practice the profession without a valid license/registration from the PRC and without 

paying the privilege tax to the government agency concerned;


2. Join in his professional capacity a firm, partnership, association or corporation which 

represents itself as a geodetic engineering entity, but actually is not authorized under the 

law. 

3. Refuse to serve in his professional capacity when required by the State in cases under 

litigation whether administratively or judicially, or in cases of national emergency; 

4. Give false testimony in administrative or judicial proceedings: 

5. Undertake a job for which he is not qualified under the law, e.g. a junior geodetic 

engineer executing a survey in excess of the limits allowed by law or regulations; 

6. Refuse or neglect to report to the authorities concerned erroneous surveys discovered 

in the course of undertaking his job; 

7. Refuse or neglect to pay his workers and employees just wages agreed upon and to 

provide benefits mandated by law; and 

8. Render service to, or work with, any person or entity, engage in illegal or unlawful 

activities. 

e) Always participate in IMPROVING and ELEVATING the STANDARDS of the profession 

by exchanging relevant information and experience through technical publications, lectures, 

seminars, conferences and conventions; 

f) Always be enthusiastic and devoted in imbuing ESPRIT DE CORPS to enhance and 

maintain camaraderie between and among members of the profession and the integrated 

association of geodetic engineers and always comply with his obligations to the latter like 

payment of his dues to the organization to effectively achieve its objective as defined in its 

by-laws; 

g) Always bear in mind that the practice of the profession should redound to the improvement 

of the welfare not only of the client but also of the community in particular and of the 

nation in general, and therefore, he shall always be endowed with the highest degree of 

SOCIAL RESPONSIBILITY. 

Section 3. Sanctions. Any geodetic engineer and junior geodetic engineer who violates 

any of the above shall be dealt with pursuant to Section 22, Article IV of R.A. 8560. 

ìAN HONORABLE GEODETIC ENGINEER OR JUNIOR GEODETIC ENGINEER CON- 

SIDERS FEES OBTAINED THROUGH HONEST AND COMPETENT PROFESSIONAL 

SERVICE AS MONEY EARNED WITH THE HIGHEST DEGREE OF PROFESSIONAL 

ETHICS AND PROFESSIONALISMî 


--o0o-- 

BOARD OF GEODETIC ENGINEERING 


Recognition of the Geodetic Engineers of the Philippines, Inc. 

(GEP) as the One and Only Integrated and Accredited 

Organization of Geodetic Engineers

1664 






--o0o-- 

BOARD FOR LIBRARIANS 


Repealing Resolution No. 07, Series of 1999 (Re: Registration of 

Librarians who Failed to Register within the Period 

Provided in Sec. 18, Art. III of R.A. 6966) 

Adopted: 14 Feb. 2003 




--o0o-- 

BOARD OF MARINE DECK OFFICERS 

Board Resolution No. 03-11, s. 2003 

Amendments to Section 3 (11, 12 and 18), ARTICLE I, Sections 16, 18, 

19 and 21, ARTICLE V, Section 28, ARTICLE VI and Section 29 and 32, 

ARTICLE VII, of Board of Marine Deck Officers Resolution No. 02-04, 

Series of 2002 (Re: Revised Rules and Regulations Implementing 

Republic Act No. 8544, The ìPHILIPPINE MERCHANT MARINE 

OFFICERS ACT OF 1998î) 

WHEREAS, after a careful perusal of Section 3(11, 12 and 18), Article I, Sections 16, 

8, 19 and 21, Article V, Section 28, Article VI and Section 29 and 32, Article VII, of Board 

resolution No. 02-04, series of 2002, the Board deemed it necessary to amend said sections 

to clarify some provisions and to conform with the recent developments arising from their 

implementation. 

WHEREFORE, the Board resolved to amend Section 3(11, 12 and 18), Article I, Sections 

16, 18, 19 and 21, Article V, Section 28, Article VI and Sections 29 and 32, Article VII, of 

Board Resolution No. 02-04, series of 2002, as follows: 

SECTION 1. Section 3(11, 12 and 18), Article I, of Board Resolution No. 02-04, series 

of 2002, is hereby amended to read as follows: 

ì x x x


ì11. CERTIFICATE OF REGISTRATION/PROFESSIONAL LICENSE - shall refer to the 

document issued to a Marine Deck Officer after passing the required licensure examination, 

and upon compliance with all the requirements prescribed by the Board and the 

Commission. 

ì12. CERTIFICATE OF COMPETENCE/ENDORSEMENT - a document issued by the 

Board to a Marine Deck Officer certifying that the Marine Deck Officer has been found 

duly qualified and competent to perform the functions of the level of responsibility involved 

on board the ship for which such officer has been examined and assessed and which 

shall attest to the authority of the marine deck officer to practice the merchant marine 

profession in the capacity specified therein. 

x x x 

ì18. APPROVED SEAGOING SERVICE - duly documented seagoing service appropriate 

to the size and type of ship towards the intended certification (gross tonnage), engaged 

in any activity on voyages of any destination or length. 

x x xî 

SECTION 2. Sections 16, 18, 19 and 21, Article V, of Board Resolution No. 02-04, 

series of 2002, are hereby amended to read as follows: 

ìSection 16. Examination and Assessment - All applicants for registration, 

certification and admission to the practice of teh marine deck officers profession 

shall be required to pass the written examination, or when appropriate, both the 

written examination and practical assessment. 

An examinee should pass the written examination in order to qualify him to 

take the practical assessment. 

When conditions and circumstances so warrant, the Board may give/administer, 

subject to the approval of the Commission, walk-in examinations, which shall 

be covered under a program of examination.î 

ìSection 18. Scope of Licensure Examinations - The scope of the licensure 

examination whcih s hall cover the major functions of both the Management and 

Operational levels of responsibility, are as follows: 

.1 WRITTEN EXAMINATION 

(1) Navigation 

(2) Cargo handling and stowage 

(3) Controlling the operation of the ship and Care for persons on board 

(4) Radiocommunications 

.2 PRACTICAL ASSESSMENT 

The practical assessment shall be based on, and carried out, in accordance


with the competencies required under the appropriate level in Section A of the 

STCW Code. 

A successful examinee in the written examination who is required to take the 

practical assessment may opt to submit a Certificate of Training and a Certificate 

of Assessment in Ship Simulator and Bridge Teamwork (SSBT) Course from a 

training center accredited by the Maritime Training Council and recognized by 

the Board of Marine Deck Officers. Successful examinees in the written examination 

licensure examination for the management level who have already taken the 

SSBT course shall only be required to submit a Certificate of Assessment corresponding 

for the management level. The examinee may undergo the aforesaid 

training and assessment prior to the licensure examination. The training center 

shall file its Letter of Intent for recognition to the Board. The Board shall issue the 

corresponding guidelines which shall govern the recognition of training centers. 

Only AFTER RECOGNITION of a training center by the Board shall its certificates 

of training and assessment be accepted and recognized in lieu of the practical 

assessment. 

The practical assessment shall be administered to the following: 

1. Successful examinees in the written examination of the Officer in Charge of a 

Navigational Watch licensure examination who have commenced approved education 

and training PRIOR to August 1, 1998 or under the old maritime curriculum 

of the Commission on Higher Education (CHED). They are graduates of school 

year 2000-2001 and before; and school year 2001-2002 and after, but have 

commenced approved education and training PRIOR to August 1, 1998. 

Successful examinees in the written examination of the Officer in Charge of a 

Navigational Watch licensure examination who have commenced approved education 

and training AFTER August 1, 1998 or under the REVISED maritime curriculum 

of the Commission on Higher Education (CHED) in compliance with the 

revised STCW Convention, which includes the approved program of on-board 

training as required under regulation II/1 are EXEMPTED from taking the practical 

assessment. They are graduates of school year 2001-2002 and after, and 

have commenced approved education and training AFTER August 1, 1998. 

2. Successful examinees in the written examination of the Chief mate licensure 

examination. 

3. Successful examinees in the written examination of the Master Mariner licensure 

examination, EXCEPT those who have already taken and passed the practical 

assessment for Chief mate.î 

ìSection 19. Formulation of Syllabus - The Board shall formulate and adopt 

a syllabus for each of the subjects for the licensure examination covering the 

major functions in both the management and operational levels of responsibility. 

Test questions that will be prepared shall be strictly within the scope of the syllabus 

of the subject.


ìSection 21. Required Rating to Pass the Licensure Examinations 

(a) To pass the written examination, an examinee must obtain a weighted general 

average rating of at least seventy percent (70%), with no grade lower than sixty 

percent (60%) in any given subject 

(b) To pass the practical assessment, an examinee must obtain a grade of at least 

seventy percent (70%); 

(c) To pass the licensure examination for marine deck officers, where practical 

assessment is required, in addition to the written examination, an examinee must 

obtain a general average rating of at least seventy percent (70%) in bot the 

written examination and practical assessment; and 

(d) The final grade of the examinee who is not required to undergo the practical 

assessment shall be his weighted general average rating in the written examination. 

On the other hand, the final grade of the examinee who is required to undergo 

the practical assessment, shall be his weighted general average rating in 

the written examination and a grade of ìPASSî in the practical assessment.î 

SECTION 3. Section 28, Article VI, of Board Resolution No. 02-04, series of 2002, is 

hereby amneded to read as follows: 

ì1. MASTER MARINER (500 GT OR MORE) 

a. Must be a holder of a Certificate of Registration/Professional License as Chief 

Mate. 

b. Must have an approved sea service as Chief Mate for at least twelve (12) 

months; or at least thirty six (36) months in the operational level, provided that at 

least twelve (12) months of the seagoing service must be after having been registered/certificated 

as Chief Mate; or at least thirty six (36) months in both the 

operational and management level, on board seagoing ship of 500 GT or more. 

x x x. 

ì2. CHIEF MATE (500 GT OR MORE) 

a. Must be a holder of a Certificate of Registration/Professional License Second 

mate, Third Mate, or Officer in Charge of a Navigational Watch. 

x x x 

ì3.OFFICER IN CHARGE OF A NAVIGATIONAL WATCH (500 GT OR MORE) 

a. Must be a graduate of Bachelor of Science in Marine Transportation in a 

school, academy, institute, college or university recognized by the Commission 

on Higher Education (CHED)


b. Must have completed an approved sea service for at least twelve (12) months 

on board seagoing ship of 500 GT or more, as part of an approved education and 

training program, which includes on board training in accordance with the requirements 

and standards of competence in section A-II/1 od the STCW Code, 

documented in an approved training record book. 

c. Must have performed, during the required seagoing service, bridge 

watchkeeping duties under the supervision of the master or a qualified officer for 

a period of not less than six (6) months. 

An applicant to the marine deck officers licensure examinations who has at 

least twelve (12) months seagoing service on board ship of less than 500 gross 

tonnage shall be allowed to take the licensure examination. However, should he 

pass the licensure examination, his Certificate of Competency and Endorsement 

Certificate shall be qualified under Regulation II/3 of the revised STCW Contention.î 

x x x.î 

SECTION 4. Section 29 and 32, Article VII, of Board Resolution No. 02-04, series of 

2002, are hereby amended to read as follows: 

Article VII 

CERTIFICATES 

ìSection 29. Registration of Successful Examinees; Issuance of Certificates 

of Registration, Competency and Endorsement - An examinee who 

passed the licensure examination shall, unless specifically deferred for cause by 

the Board, be registered after taking the oath of a professional before a member 

of the Board or any official authorized to administer oath, and payment of the 

prescribed fees. Upon compliance with the other requirements for registration 

prescribed by the Board and the Commission, the name of the professional shall 

be entered/enrolled in the Roll of Marine Deck Officers. 

The following certificates shall be issued to a Marine Deck Officer: 

1. Certificate of Registration/Professional License which shall bear the signatures 

of the Chairman and members of the Board, and the Chairperson of the 

Commission with the official seal of the Board and the Commission. The Certificate 

of Registration shall be in the Filipino language with English translation. 

2. Certificate of Competency/Endorsement bearing his registration/certificate 

number signed by the Chairman with the official seal of the Board. In the absence 

of the Chairman, the Certification of Competency shall be signed in the following 

order: (1) The Vice-Chairman; and (2) The senior member of the Board. 

Applicant must have met the applicable requirements and standards of competence 

in section A of the STCW Code and, as appropriate, for performing designated 

requirements for the appropriate level:


1. MASTER MARINER on ship of 3,000 gross tonnage or more (Regulation II/ 

2, paragraph 1) 

a) with sea service as Chief mate for at least three (3) months on board 

seagoing ship of 3,000 gross tonnage or more; or 

b) with sea service for at least six (6) months in the operational level on board 

seagoing ship of 3,000 gross tonnage or more; or 

c) with sea service for at least six (6) months in both the operational and 

management level on board seagoing ship of 3,000 gross tonnage or more. 

2. CHIEF MATE on ship of 3,000 gros tonnage or more (Regulation II/2, paragraph 

1) with sea service in the operational level for at least three (3) months on 

board seagoing ship of 3,000 gross tonnage or more. 

3. MASTER MARINER on ship of between 500 and 3,000 gross tonnage (Regulation 

II/2, paragraph 3) 

a) with sea service as Chief mate for at least twelve (12) months on board 

seagoing ship of between 500 and 3,000 gross tonnage; or 

b) with sea service for at least thirty six (36) months in the operational level on 

board seagoing ship of between 500 and 3,000 gross tonnage; or 

c) with sea service for at least thirty six (36) months in both the operational and 

manegement level on board seagoing ship of between 500 and 3,000 gross tonnage. 

4. CHIEF MATE on ship of between 500 and 3,000 gross tonnage (Regulation 

II/2, paragraph 3) with sea service in the operational level for at least twelve (12) 

months on board seagoing ship of between 500 and 3,000 gross tonnage. 

5. OFFICER IN CHARGE OF A NAVIGATIONAL WATCH with sea service for 

at least twelve (12) months on board seagoing ship of 500 gross tonnage or more. 

(Regulation II/1) 

6. MARINE DECK OFFICER IN THE OPERATIONAL LELVE (Regulation II/1) 

AND MANAGEMENT LEVEL (Regulation II/2) with seagoing service on board 

ship of less than 500 gross tonnage, with limitation as ìvalid only on ship of less 

than 500 gross tonnageî. 

7. OFFICER IN CHARGE OF A NAVIGATIONAL WATCH or CHIEF MATE as 

MASTER on ship of less than 50 gross tonnage engaged in near coastal voyages 

(Regulation II/3), with limitation as ìvalid only on ship of less than 500 gross 

tonnage engaged on near coastal voyages.î 

The Certificate of COmpetency may contain limitation/s on the type of ship, 

gross tonnage, trading area and such other limitation/s which a member of the 

Board/Qualified Assessor may impose after an assessment. 

3. Endorsement Certificate bearing his registration/certificate number indicating 

therein the date of issuance and date of expiration signed by the Chairperson 

with the official seal of the Commission. In the absence of the Chairperson, the

1670 


Endorsement Certificate shall be signed in the following order: (1) The senior 

member of the Commission (2) The junior member of the Commission (3) The 

Assistant Commissioner responsible in the implementation of the 1978 STCW 

Convention, as amended. 

x x x.î 

ìSection 32. Reinstatement of Certificate of Competency - After one (1) 

year from the finality of the Decision revoking his Certificate of registration/ 

professional License, or prior to the lapse of one (1) year, when the cause/basis 

of the revocation of the Certificate/License no longer exist, or has been legally 

rectified, a marine deck officer may file a petition for the reinstetement of said 

Certificate and the Board may, for good and just cause shown and during the 

period the marine deck officer has acted in an expemplary manner and has not 

committed any illegal, immoral or dishonorable conduct, grant the petition and 

enter an order reinstating the Certificate of Registration/Professional License. 

A replacement of the Certificate of Registration, Certificate of Competency 

and endorsement Certificate in lieu of the lost, destroyed, or mutilated certificate 

may be issued upon application and payment of the prescribed fees.î 

SECTION 5. Transitory Provisions - Conditioned examinees in the written examination 

shall still take the subject/s in which they were conditioned within a period of two (2) years 

from the last examination taken. Those who failed in the practical assessment may opt to 

submit a Certificate of Training and a Certificate of Assessment in Ship Simulator and 

Bridge Teamwork (SSBT) Course from a training center accredited by the Maritime Training 

Council and recognized by the Board of Marine Deck Officers correpsonding to the level 

they have taken. Certificates of training in SSBT Course obtained PRIOR to the effectivity of 

this resolution may be accepted, provided that exminees shall submit the Certificate of 

Assessment from a training center AFTER it has been RECOGNIZED by the Board. 

SECTION 6. Effectivity - The amendments shall take effect after fifteen (15) days 

following the completion of its publication in a newspaper of general circulation or in the 

Official Gazette, whichever is earlier. 


(SGD.) ERNESTO C. BONDOC 

Chairman 

(SGD.) AURELIO R. PICARDAL (SGD.) CONSTANTINO L. ARCELLANA, JR. 

Member Member 

(SGD.) RODOLFO F. RAZ (SGD.) JAIME C. AQUINO 

Member Member 

ATTESTED BY: 

(SGD.) ATTY. ARISTOGERSON T. GESMUNDO 

Assistant Commissioner


APPROVED: 


Chairperson 

(SGD.) AVELINA DELA REA-TAN (SGD.) ALFONSO G. ABAD 




óo0oó 

BOARD OF MARINE ENGINEER OFFICERS 

Board Resolution No. 03-10, s. 2003 

AMENDMENTS TO SECTION 3 (11,12 and 18), ARTICLE I, SECTIONS 16,18, 

19 AND 21, ARTICLE V, SECTION 28, ARTICLE VI AND SECTIONS 29, 29.3 

AND 32, ARTICLE VII, OF BOARD OF MARINE ENGINEER OFFICERS 

RESOLUTION NO. 02-03, SERIES OF 2002 (Re: Revised Rules and 

Regulations Implementing Republic Act No. 8544, the ìPHILIPPINE 

MERCHANT MARINE OFFICERS ACT OF 1998î) 

WHEREAS, after a careful perusal of Section 3(11, 12 and 18), Article I, Sections 16, 

18, 19 and 21, Article V, Section 28, Article VI and Sections 29, 29.3 and 32, Article VII, of 

Board Resolution No. 02-03, series of 2002, the Board deemed it necessary to amend said 

sections to clarify some provisions and to conform with the recent developments arising from 

their implementation. 

WHEREFORE, the Board resolved to amend Section 3(11, 12 and 18), Article I, Sections 

16, 18, 19 and 21, Article V, Section 28, Article VI and Sections 29, 29.3 and 32, Article VII, 

of Board Resolution No. 02-03, series of 2002, as follows: 

SECTION 1. Section 3(11, 12 and 18), Article I, of Board Resolution No. 02-03, series 

of 2002, is hereby amended to read as follows: 

ì x x x 

ì11. CERTIFICATE OF REGISTRATION/PROFESSIONAL LICENSE - shall refer 

to the document issued to a Marine Engineer Officer after passing the required 

licensure examination, and upon compliance with all the requirements prescribed 

by the Board and the Commission. 

ì12. CERTIFICATE OF COMPETENCY/ENDORSEMENT - a document issued by 

the Board to a Marine Engineer Officer certifying that the Marine Engineer Officer 

has been found duly qualified and competent to perform the functions of the 

level of responsibility involved on board the ship for which such officer has been 

examined and assessed and which shall attest to the authority of the engineer 

officer to practice the merchant marine profession in the capacity specified therein.

1672 


x x x 

ì18. APPROVED SEAGOING SERVICE - duly documented seagoing service 

appropriate to the size and type of ship towards the intended certification (Kw 

propulsion power), engaged in any activity on voyages of any destination or 

length. 

x x x.î 

SECTION 2. Sections 16, 18, 19 and 21, Article V, of Board Resolution No. 02-03, 


ìSection 16. Examination and Assessment - All applicants for registration, 

certification and admission to the practice of the Marine Engineer Officers profession 

shall be required to pass the written examination, or when appropriate, 

both the written examination and practical assessment. 

An examinee should pass the written examination in order to qualify him to 

take the practical assessment. 

When conditions and circumstances so warrant, the Board may give/administer, 

subject to the approval of the Commission, walk-in examinations, which shall 

be covered under a program of examination.î 

ìSection 18. Scope of Licensure Examinations - The scope of the licensure 

examination which shall cover the major functions of both the Management and 

Operational levels of responsibility, are as follows: 

.1 WRITTEN EXAMINATION 

(1) Marine engineering 

(2) Electrical, electronic and control engineering 

(3) Maintenance and repair 

(4) Controlling the operation of the ship and care for persons on board 

.2 PRACTICAL ASSESSMENT 

The practical assessment shall be based on, and carried out, in accordance 

with the competencies required under the appropriate level in Section A of the 

STCW Code. 

A successful examinee in the written examination who is required to take the 

practical assessment may opt to submit a Certificate of Training and a Certificate 

of Assessment in Engine Room Simulator (ERS) Course from a training center 

accredited by the Maritime Training Council and recognized by the Board of 

Marine Engineer Officers. Successful examinees in the written examination licensure 

examination for the management level who have previously taken the Engine 

Room Simulator (ERS) Course shall only be required to submit a Certificate of 

Assessment corresponding for the management level. The examinee may undergo 

the aforesaid training and assessment prior to the licensure examinations. 

The training center shall file its Letter of Intent for recognition to the Board. The


Board shall issue the corresponding guidelines which shall govern the recognition 

of training centers. Only AFTER RECOGNITION of a training center by the Board 

shall its certificates of training and assessment be accepted and recognized in 

lieu of the practical assessment. 

The practical assessment shall be administered to the following: 

1. Successful examinees in the written examination of the Officer in Charge of an 

Engineering Watch licensure examination who have commenced approved education 

and training PRIOR to August 1, 1998 or under the old maritime curriculum 

of the Commission on Higher Education (CHED). 

They are graduates of school year 2000-2001 and before; and school year 2001- 

2002 and after, but have commenced approved education and training PRIOR to 

August 1, 1998. 

Successful examinees in the written examination of the Officer in Charge of an 

Engineering Watch licensure examination who have commenced approved education 

and training AFTER August 1, 1998 or under the REVISED maritime curriculum 

of the Commission on Higher Education (CHED) in compliance with the 

revised STCW Convention, which includes the approved program of on-board 

training as required under Regulation III/1 are EXEMPTED from taking the practical 

assessment. They are graduates of school year 2001-2002 and after, and 

have commenced approved education and training AFTER August 1, 1998. 

2. Successful examinees in the written examination of the Second Engineer Officer 

licensure examination. 

3. Successful examinees in the written examination of the Chief Engineer Officer 

licensure examination, EXCEPT those who have already taken and passed the 

practical assessment for Second Engineer Officer.î 

ìSection 19. Formulation of Syllabus - The Board shall formulate and adopt a 

syllabus for each of the subjects for the licensure examination covering the major 

functions in both the management and operational levels of responsibility. Test 

questions that will be prepared shall be strictly within the scope of the syllabus of 

the subject. 

ìSection 21. Required Rating to Pass the Licensure Examinations - 

(a) To pass the written examination, an examinee must obtain a weighted general 

average rating of at least seventy percent (70%), with no grade lower than sixty 

percent (60%) in any given subject; 

(b) To pass the practical assessment, an examinee must obtain a grade of at least 

seventy percent (70%); 

(c) To pass the licensure examination for marine engineer officers, where practical 

assessment is required, in addition to the written examination, an examinee 

must obtain a general average rating of at least seventy percent (70%) in both the 

written examination and practical assessment; and

1674 


(d) The final grade of the examinee who is not required to undergo the practical 

assessment shall be his weighted general average rating in the written examination. 

On the other hand, the final grade of the examinee who is required to 

undergo the practical assessment, shall be his weighted general average rating in 

the written examination and a grade of ìPASSî in the practical assessment.î 

SECTION 3. Section 28, Article VI, of Board Resolution No. 02-03, series of 2002, is 

hereby amended to read as follows: 

ì1. CHIEF ENGINEER OFFICER (750 KW PROPULSION POWER OR MORE) 

a. Must be a holder of a Certificate of Registration/Professional License as 

Second Engineer Officer. 

x x x 

ì2. SECOND ENGINEER OFFICER (750 KW PROPULSION POWER OR 

MORE) 

a. Must be a holder of a Certificate of Registration/Professional License as 

Third Engineer Officer, Fourth Engineer Officer or Officer in Charge of an Engineering 

Watch. 

ì3. OFFICER IN CHARGE OF AN ENGINEERING WATCH (750 KW PROPUL- 

SION POWER OR MORE) 

ìx x x 

b. Must have completed an approved sea service as apprentice engineer/ 

engine cadet, wiper or oiler/motorman on board seagoing ship powered by main 

propulsion machinery of 750 KW propulsion power or more for at least twelve 

(12) months, as part of an approved education and training program, which includes 

on board training documented in an approved training record book and 

met the standards of competence in Section A-III/1, of the STCW Code. 

An applicant to the marine engineer officers licensure examinations who has 

at least twelve (12) months seagoing service on board ship powered by main 

propulsion machinery of less than 750 KW propulsion power shall be allowed to 

take the licensure examination, however, should he pass the licensure examination, 

he shall not be issued the STCW ë95 Certificates until he has already completed 

a sea service of at least twelve (12) months on board seagoing ship powered 

by main propulsion machinery of 750 KW propulsion power or more equivalent 

to the position/rank immediately prior to the grade/rank of the licensure examination 

he has successfully passed.î 

SECTION 4. Sections 29, 29.3 and 32, Article VII, of Board Resolution No. 02-03, 


ARTICLE VII 

CERTIFICATES


ìSection 29. Registration of Successful Examinees; Issuance of Certificates 

of Registration, Competency and Endorsement - An examinee who 

passed the licensure examination shall, unless specifically deferred for cause by 

the Board, be registered after taking the oath of a professional before a member 

of the Board or any official authorized to administer oath and payment of 

theprescribed fees. Upon compliance with the other requirements for registration 

prescribed by the Board and the Commission, the name of the professional shall 

be entered/enrolled in the Roll of Marine Engineer Officers. 

The following certificates shall be issued to a Marine Engineer Officer: 

1. Certificate of Registration/Professional License which shall bear the signatures 

of the Chairman and members of the Board, and the Chairperson of the 

Commission with the official seal of the Board and the Commission. The Certificate 

of Registration shall be in the Filipino language with English translation. 

2. Certificate of Competency/Endorsement bearing his registration/certificate 

number signed by the Chairman with the official seal of the Board. In the absence 

of the Chairman, the Certificate of Competency shall be signed in the following 

order: (1) The Vice-Chairman; and (2) The senior member of the Board. 

Applicant must have met the applicable requirements and standards of competence 

in section A of the STCW Code. 

The following category of STCW ë95 Certificates shall be applied after passing the 

Marine Engineer Officers licensure examinations and complying with the qualification 

requirements for the appropriate level: 

ìx x x 

The Certificate of Competency may contain limitation/s on the type of ship, kW propulsion 

power, trading area, and such other limitation/s which a member of the Board/ 

Qualified Assessor may impose after an assessment. 

.3 Endorsement Certificate bearing his registration/certificate number indicating 

therein the date of issuance and date of expiration signed by the Chairperson 

with the official seal of the Commission. In the absence of the Chairperson, the 

Endorsement Certificate shall be signed in the following order: (1) The senior 

member of the Commission (2) The junior member of the Commission (3) The 

Assistant Commissioner responsible in the implementation of the 1978 STCW 

Convention, as amended. 

x x x.î 

Section 29.3 Upgrading of Certificates - A Certificate of Competency and 

Endorsement Certificate with limitation/s, as herein above indicated, shall be upgraded 

as follows: 

1. CHIEF ENGINEER OFFICER who is a holder of a Certificate of Competency 

and Endorsement Certificate issued under the provision of Regulation III/3, para-

1676 


graph 1, shall be upgraded to the provision of Regulation III/2, without undergoing 

examination, after completion of relevant training course/s prescribed by the Board, 

or an approved sea service on board seagoing ships powered by main propulsion 

machinery of 3,000 kW propulsion power or more as Second Engineer Officer, 

or supernumerary Chief Engineer, for at least three (3) months. 

2. SECOND ENGINEER OFFICER who is a holder of a Certificate of Competency 

and Endorsement Certificate issued under the provision of Regulation III/3, 

paragraph 1, with the capacity as Chief Engineer Officer, shall be upgraded to 

the provision of Regulation III/2, without undergoing examination, after completion 

of relevant training course/s prescribed by the Board, or an approved sea 

service on board seagoing ships powered by main propulsion machinery of 3,000 

kW propulsion power or more in the operational level, or as supernumerary Second 

Engineer Officer, for at least three (3) months. 

ìSection 32. Reinstatement of Certificate of Competency - After one (1) year 

from the finality of the Decision revoking his Certificate of Registration/Professional 

License, or prior to the lapse of one (1) year when the cause/basis of the 

revocation of the Certificate/License no longer exists, or has been legally rectified, 

a marine engineer officer may file a petition for the reinstatement of said 

Certificate and the Board may, for good and just cause shown and during the 

period the marine engineer officer has acted in an exemplary manner and has 

not committed any illegal, immoral or dishonorable conduct, grant the petition and 

enter an Order reinstating the Certificate of Registration/Professional License. 

A replacement of the Certificate of Registration, Certificate of Competency 

and Endorsement Certificate to replace the lost, destroyed, or mutilated certificate 

may be issued upon application and payment of the prescribed fees.î 

SECTION 5. Transitory Provisions - Conditioned examinees in the written examination 

shall still take the subject/s in which they were conditioned within a period of two (2) years 

from the last examination taken. Those who failed in the practical assessment may opt to 

submit a Certificate of Training and a Certificate of Assessment in Engine Room Simulator 

(ERS) Course from a training center accredited by the Maritime Training Council and 

recognized by the Board of Marine Engineer Officers. Certificates of Training in ERS 

Course obtained PRIOR to the effectivity of this Resolution may be accepted, provided that 

examinees shall submit the Certificate of Assessment from a training center AFTER it has 

been RECOGNIZED by the Board. 

SECTION 6. Effectivity - The amendments shall take effect after fifteen (15) days 

following the completion of its publication in a newspaper of general circulation or in the 

Official Gazette, whichever is earlier. 


(SGD.) CHRISTOPHER P. MAAMBONG 

Chairman 

(SGD.) BONIFACIO N. BALINTEC (SGD.) ISAGANI I. VALMONTE, JR. 

Member Member


ATTESTED BY: 

(SGD.) ARTURO D. CARMEN 

Member 

(SGD.) ATTY. ARISTOGERSON T. GESMUNDO 

Assistant Commissioner 

APPROVED: 


Chairperson 

(SGD.) AVELINA DE LA REA-TAN (SGD.) ALFONSO G. ABAD 



óo0oó 

BOARD OF MECHANICAL ENGINEERING 

Resolution No. 04 

Recognition of the Philippine Society of Mechanical Engineers, Inc. 

(PSME), as the One and Only Integrated and Accredited Organization 

of Professional Mechanical Engineers, Mechanical Engineers and 

Certified Plant Mechanics 

Adopted: 04 March 2003 




--o0o-- 


Resolution No. 05 

Recommending to the Professional Regulation Commission to Require 

the Professional Mechanical Engineers, Mechanical Engineers and Certified 

Plant Mechanics who Renew their Professional Identification Cards to 

Submit ìCertificate of Good Standingî as Member of the Recognized 

Integrated and Accredited Association of Mechanical Engineers 




--o0o--

1678 




Board Resolution No. 06, s. 2003 

Code of Ethical and Professional Standards for the Practice 

of Mechanical Engineering Profession 

Pursuant to the provisions of Section 9(a) of Republic Act No. 8495, known as the 

ìPhilippine Mechanical Engineering Act of 1998î and Section 50, Rule XIII of Board Resolution 

No. 16, Series of 1998, providing for the Rules and Regulations to carry out the purposes of 

the Act, the Board of Mechanical Engineering hereby adopts, promulgates and issues this 

Code of Ethical and Professional Standards for the Practice of the Mechanical Engineering 


PREAMBLE 

Engineering is a profession as old as civilization. It is not only an important profession. 

It is also a learned one. 

The members of the Mechanical Engineering profession recognize that their work has 

a direct and vital impact on the quality of life of the people. 

The services that Mechanical Engineers provide is impressed with public interest for it 

affects the health, safety and welfare of the people, hence, they should be honest, fair, 

impartial and just in dealing not only with their clients but also with their fellowmen. 

As a professional, the Mechanical Engineer must practice his profession by observing 

a standard of professional behavior that requires strict adherence to the principles of ethical 

and professional conduct provided by the Code of Ethics of their profession. 

FUNDAMENTAL CANONS 

Mechanical Engineers in the fulfillment of their professional duties, shall: 

1. Hold paramount the safety, health, and welfare of the public in the performance of 

their professional duties. 

2. Perform services only in areas of their competence. 

3. Make/Issue public statements on issues only in an objective and truthful manner. 

4. Act in a professional manner for each employer or client as faithful agents or trustees. 

5. Avoid improper solicitation of clients or professional employment. 

GENERAL PRINCIPLES 

Rule 1. The mechanical engineer shall, in the practice of his profession, be guided by the 

Golden Rule, the ideals of service to man and his environment, and the need to secure 

unwavering public confidence in his professional competence, integrity and humanity.


Rule 2. The mechanical engineer shall maintain the proper professional fee for his profession, 

observe the standards of professional practice, safeguard the dignity, and reputation 

of his colleagues in the profession, and fulfill his duties and obligations as a citizen of 

the Republic of the Philippines. 

Rule 3. The mechanical engineer shall update and enhance constantly his professional 

knowledge and skills through assiduous research and study, and participation in continuing 

professional development programs and seminars conducted or authorized by the 

Integrated Organization of Mechanical Engineers accredited by the Board of Mechanical 

Engineering and the Professional Regulation Commission (PRC) or educational institutions 

supervised by the State. 

Rule 4. The ethical principles required to be observed by mechanical engineers shall equally 

apply to partnership, firms and entities organized and existing for the practice of mechanical 

engineering. 

RELATIONS WITH THE STATE 

Rule 5. The mechanical engineer shall honor and respect the supreme authority of the 

State, the Rule of Law, the primacy of the general welfare, the fundamental rights of 

persons, and the obligations and privileges of citizens recognized and guaranteed by the 

Constitution of the Philippines. 

Rule 6. He shall cooperate fully with the State in the pursuit of national development plans 

and programs, shall respect the inviolability of national security, shall assist in the promotion 

of peace and order and when circumstances arise shall assist in the prevention and/ 

or prosecution of unjust, criminal or unlawful acts and omissions. 

Rule 7. He shall be ready to render the services needed for the development of the resources 

of the country, and to offer his mechanical devices and inventions essential or 

necessary for national defence. 

Rule 8. In case of a national emergency, he shall be ready to offer his professional knowledge, 

skill and experience in the service of the State. 

RELATIONS WITH THE COMMUNITY 

Rule 9. The mechanical engineer shall be well-informed of the latest technological progress 

in his own line of work. He shall encourage or require whenever appropriate the use, or 

application of standard mechanical equipment, machinery, or process for safety, economy 

and efficiency. 

Rule 10.Whenever he designs a mechanical equipment, machinery or process, or prepares 

the layout of a project, he must apply an adequate factor of safety, and provide for the 

necessary leeway to insure and maintain for proper operating and maintenance conditions. 

Rule 11. When he discovers faulty or unsafe devices, equipment, or machinery in any place, 

work or plant, he shall without delay, give notice thereof to the proper authority, public or 

private, for the immediate and effective correction, regardless or whether or not he is 

responsible for said place, work or plant.

1680 


RELATIONS WITH LABOR 

Rule 12.The mechanical engineer shall recognize labor as one of the major resources of our 

country. He must acknowledge that a working man is not a mechanical robot but a human 

being. 

Rule 13.He should be familiar with State policies on Labor and Social Justice, as well as, the 

labor and social legislations and shall observe faithfully these policies and laws in dealings 

with labor in general, and with his workmen in particular. 

Rule 14.He shall strive to improve the skills of his workmen, pay them a fair living wage, and 

instruct them on how to prevent accidents in their place of work. 

RELATIONS WITH CLIENTS AND EMPLOYERS 

Rule 15.The mechanical engineer shall observe punctuality in his appointments, perform 

honestly and in good faith his contractual obligation and his duties and obligations to his 

client or employer, and observe fair dealing in his relations with his clients and employers. 

Rule 16.He shall treat with confidentiality any information obtained by him regarding the 

business affairs and technical methods or processes of a client, or employer. 

Rule 17.He shall inform his client or employer of his business connections, interests, or 

affiliations which may influence his judgment, or impair the quality or character of his 

services. 

Rule 18.The mechanical engineer is entitled to a just and fair compensation for his services. 

In the computation of such compensation, the period of time consumed, his professional 

knowledge, skill, experience, and reputation, and the depreciation of instruments and 

materials used, shall be considered and accorded such weight as is just and reasonable. 

Rule 19.He shall accept compensation, financial or otherwise, for his services from his 

clients or employer only. He may agree to, or receive compensation from any other 

source only with the full knowledge and consent of all parties concerned. 

Rule 20.The mechanical engineer shall be completely above suspicion or reproach in his 

relation with his clients or employers, avoiding the remotest reference or relations to any 

secret or questionable agreement on commissions or other financial consideration promised 

by or received from any person or entity other than his client or employer. 

RELATIONS WITH COLLEAGUES AND ASSOCIATES 

Rule 21.ìTo thine ownself be true and thou cannot be false to any menî expresses the duty 

which a mechanical engineer owes to himself and to others. 

Rule 22.The mechanical engineer shall use only fair means to gain professional advancement. 

In the pursuit thereof, he shall not injure the work or employment opportunities of 

others, or use any improper or questionable method of soliciting employment or clients. 

Rule 23.He shall refrain from associating with, or allowing the use of his name by, any 

person or entity of questionable reputation.


Rule 24.He shall provide the opportunity and the means to improve and advance the knowledge, 

skills, and experience of his colleagues and associates. 

Rule 25.He shall define clearly the line of authority and scope of responsibility of his associates 

and assistants. Orders, or the recall thereof, shall be issued through proper channels. 

Rule 26.He shall be receptive to new ideas and suggestions from others, and ready to 

recognize, encourage, and accredit the authors thereof. Suggestions from colleagues 

and associates shall be given more careful attention. 

Rule 27.He shall use tact and discretion in dealing with his colleagues and associates, but 

not at the sacrifice of firmness. He shall work out difficult problems with courage and 

serenity. 

Rule 28.Careful selection of understudies shall be a guiding principle, and preference shall 

be given to those with adequate engineering education. 

Rule 29.He shall not expect others to face danger that he himself will not face. He shall 

observe at all times safety requirements for the protection of all concerned. 

Rule 30.The mechanical engineer shall actively support the duly accredited association with 

the end in view of enhancing the practice of the profession and discharging his public 

responsibilities as a professional. 

PROVISIONS ON DISCIPLINARY ACTION 

Rule 31. Violation of any provision of this Code shall constitute a ground for the 

revocation or suspension of the certificate of registration and professional license/ 

professional identification card or the cancellation of a temporary or special permit 

under the provisions of Sec. 26 and Sec. 27, Art. III of R.A. No. 8495, Known as he 

ìMechanical Engineering Act of 1998î and Sec. 41, Rule VII of the ìRules and 

Regulations Implementing R.A. No. 8495. 

EFFECTIVITY 

Rule 32.This Code shall take effect after fifteen (15) days following its publication in full in 

the Official Gazette or in a newspaper of general circulation, whichever comes earlier. 


(SGD.) ANTONIO RO. HERRERA 

Chairman 

(SGD.) DONATO K. KARAMIHAN (SGD.) CHONA A. EVANGELISTA 

Member Member 

ATTESTED: 


Secretary, Professional Regulatory Board

1682 


APPROVED: 


Chairperson 




--o0o-- 



Adoption and Promulgation of the Revised Philippine Mechanical Code 





--o0o-- 

BOARD FOR PROFESSIONAL TEACHERS 


Discontinuance of the Processing of Applications for Registration 

Without Examination as Professional Teacher Under Sec. 26, Paragraphs 

(a), (b) and (c-[1] and (c-[2]) of R.A. 7836 

WHEREAS, the Philippine Teachers Professionalization Act of 1994 (R.A. 7836) which 

was enacted on December 16, 1994, requires the registration of teachers with the Board for 

Professional Teachers created under the same Act; 

WHEREAS, Section 26 of the Act provides that two (2) years after the effectivity of 

said Act no person shall engage in teaching or act as professional teacher as defined in the 

Act whether in the pre-school, elementary or secondary level, unless he or she is a duly 

registered professional teacher and a holder of a valid certificate of registration and a valid 

professional licensee or a holder of a valid special/temporary permit; 

WHEREAS, qualified applicants for registration as professional teachers without 

examination under the Act are those who at the time of the approval of the Act (December 

16, 1994) are: 

a) Holders of a certificate of eligibility as a teacher issued by the Civil Service 

Commission (CSC) and the Department of Education, Culture and Sports (DECS); 

b) Registered professional teachers with the National Board for Teachers under 

the Department of Education, Culture and Sports (DECS) pursuant to Presidential 

Decree No. 1006;


c) Those who are not qualified under paragraphs (a) and (b) but with any of the 

following qualifications: 

1. An elementary or secondary teacher for five (5) years in good standing and 

a holder of Bachelor of Science in Education or its equivalent; 

2. An elementary or secondary teacher for three (3) years in good standing 

and a holder of a masterís degree or its equivalent. 

WHEREAS, those who possess the qualifications to register as professional teachers 

as of December 16, 1994 are given two (2) years from the organization of the Board 

(September 19, 1995) within which to register and be included in the roster of the professional 

teachers. 

WHEREAS, under the first proviso of Sec. 26, those incumbent teachers who failed to 

register within the two (2) year period from September 19, 1995 who are qualified to register 

without examination under the Act shall be given a five (5) year Special/Temporary Permit to 

enable them to register after complying with the requirements provided in the Act and be 

included in the roster of professional teachers, and those incumbent teachers who are not 

qualified to register without examination who failed to register within the two (2) year period 

shall be issued a five (5) year Special/Temporary Permit from the time the Board is organized 

within which to register after passing the examination; 

WHEREAS, the extended registration without examination which was co-terminous 

with the expiration of Special/Temporary Permits issued to those incumbent teachers who 

failed to register within the two (2) year period has expired on September 20, 2000; 

WHEREFORE, the Board, resolved as it hereby resolves, to direct the Office of 

Professional Teachers of the Commission, to stop the processing of applications for registration 

as professional teacher without examination under Sec. 26 of R.A. 7836 which were filed on 

September 20, 1997 but without supporting documents/papers or with supporting documents/ 

papers but were filed or submitted beyond the deadline. 


ATTESTED: 



(SGD.) GLORIA G. SALANDANAN 

Chairman 

(SGD.) ARNULFO H. EMPLEO 

Member 

APPROVAL: 


Chairperson 

(SGD.) ALFONSO G. ABAD (SGD.) AVELINA DELA REA-TAN 

Member Member 

--o0o--

1684 



BOARD OF RADIOLOGIC TECHNOLOGY 


No Application for Registration Without Examination 

for X-ray Technologists or Radiologic Technologists 

WHEREAS, the Board subject to the approval by the Commission, shall register persons 

who are exempted from examination under Sec. 16(b) or 17 (c) & (d) of R.A. No. 7431, 

known and cited as ìRadiologic Technology Act of 1992î, as X-ray Technologist or Radiologic 

Technologist, respectively; 

WHEREAS, the said registration started after the effectivity on November 17, 1993 of 

the Rules and Regulations Governing the Examination, Registration, Licensure and Practice 

of Radiologic Technology and X-ray Technology; 

WHEREAS, on February 16, 1994, the Board, after approval by the Commission, 

issued Res. No. 03, Series of 1994, accepting applications for such registration for filing 

within one (1) year from the date of effectivity thereof; 

WHEREAS, the Board, however, has still allowed acceptance of applications therefor 

after the lapse of the foregoing 1-year period; 

WHEREAS, the said registration has been in effect for almost ten (10) years, a time 

sufficient for the qualified persons to avail themselves of the said registration; 

WHEREAS, the further extension of the period for the said registration will defeat the 

objective of registration with examination under Sec. 18 R.A. No. 7431; and 

WHEREAS, after consultation with the Philippine Association of Radiologic Technologists, 

Inc. (PART), and the Philippine Federation of Professional Radiologic Technologists, Inc. 

(PFPRT) on May 20, 2003 at PRC Main Building, 3 rd Floor, the Board decided not to accept 

anymore any application for registration without examination. 

NOW, THEREFORE, the Board resolved, as it hereby resolves, not to accept applications 

for registration without examination under Sec. 16 (b) or 17 (c) & (d) of R.A. No. 7431 

provided that the Board shall still register qualified applicants whose applications are pending 

as of the date of the effectivity of this Resolution. 

This Resolution shall take effect after fifteen (15) days following its publication in a 

newspaper of general circulation or in the Official Gazette, whichever is earlier. 


(SGD.) NICOMEDES M. GOPEZ 

Chairman 

(SGD.) EULINIA M. VALDEZCO (SGD.) LORENZO A. REVELDEZ, JR. 

Member Member


(SGD.) ORESTES P. MONZON (SGD.) MARIO O. CHAVEZ 

Member Member 

Attested: 


Secretary, Professional Regulatory Boards 

APPROVED: 


Chairperson 

(SGD.) LEONOR T. ROSERO (SGD.) AVELINA DE LA REA-TAN 



--o0o-- 

BOARD FOR SOCIAL WORKERS 


Resolution Providing Guidelines for the Implementation of R.A. 4373 

and R.A. 8981 in Relation to E.O. 330 (Expanded Tertiary Education 

Equivalency and Accreditation Program) 

WHEREAS, R.A. 4373, otherwise known as the Social Work Law, defines ìsocial 

workerî as a practitioner who, by accepted academic training and social work professional 

experience, possesses the skills to achieve the objectives as defined and set by the social 

work profession; 

WHEREAS, R.A. 4373 provides that, unless exempt from registration, no person shall 

practice social work in the Philippines, or be appointed as a social worker in any private or 

government agency without holding a valid certificate of registration as a social worker, 

issued by the Board for Social Workers and the Professional Regulation Commission (PRC), 

after the passing of the licensure examination for social workers; 

WHEREAS, in order to be admitted to take the licensure examination, an applicant 

must, among other things, establish to the satisfaction of the Board that he or she has a 

bachelorís or masterís degree in a social work and has completed a minimum period of 

1,000 case hours of practical training in an established social work agency under the direct 

supervision of a fully trained and qualified social worker; 

WHEREAS, R.A. 4373 gives the Board for Social Workers authority ìto look into the 

conditions affecting the practice of social work in the Philippines, and, whenever necessary, 

adopt such measures as may be deemed proper for the maintenance of the good standing 

and the ethics of the profession of social workî; 

WHEREAS, the PRC, which has jurisdiction over the 42 regulatory boards (including 

social work), is mandated under R.A. 8981 (PRC Modernization Act 2000) to promote the 

sustained development of a corps of competent Filipino professionals; foster internationally-


recognized and world class professional service and practice; and pursue regulatory measures, 

programs and activities that enhance professional growth and development; 

WHEREAS, Executive Order No. 330 (1996), adopting the Expanded Tertiary Education 

Equivalency and Accreditation Program (ETEEAP), is now being implemented by the 

Commission on Higher Education (CHED), allowing ìdeputizedî schools to certify the pertinent 

work experiences as well as high-level, non-formal and informal training of individuals toward 

the awarding of appropriate academic degrees; 

WHEREAS, there is an urgent need to provide guidelines for applicants to the licensure 

examination in accordance with R.A. 4373 (The Social Work Law) and R.A. 8981 (The PRC 

Modernization Act), in relation to E.O. No. 330; 

NOW, THEREFORE, the Board for Social Workers RESOLVED, as it hereby 

RESOLVES, to promulgate the following guidelines to all schools of social work for the 

implementation of R.A. 4373 and R.A. 8981, in relation to E.O. No. 330. 

1. Applications for the licensure examination in social work shall be evaluated on the basis 

solely of the provisions of R.A. 4373. 

2. The licensure examination as now conducted shall be based on the Bachelor of Science 

in Social Work curriculum or program adopted by the Board in consultation with the 

National Association for Social Work Education (NASWEI), and submitted to the Commission 

on Higher Education (CHED). 

3. The Certificate of Experience based on ì1,000 case hours of practical training in an 

established social work agency under the direct supervision of a fully trained and qualified 

social worker,î which is issued for purposes of the licensure examination should be given 

only to applicants who have satisfactorily completed theory courses in social work. 

Practical training or practicum for a particular profession presumes a prior acquisition 

of expected knowledge, attitudes and skills to be applied in practice under supervision. 

Consequently, experiences as an agency volunteer or paid staff, in direct helping activities, 

regardless of the number of years of such activities, should not be considered as the 

equivalent of 1,000 case hours unless such activities were undertaken under supervision 

and preceded by formal/official enrollment in social work courses in an accredited school 

of social work as shown in the applicantís Certificate of Experience done under oath and 

transcript of records. 

4. In granting credit for pertinent work experience and ìhigh level, non-formal and informal 

trainingî to applicants to the social work program (whether for bachelorís or masterís 

degrees in which the applicant will apply to take the licensure examination) as stated in 

E.O. No. 330, schools concerned should thoroughly evaluate the applicantís background 

and documents presented in the light of Guidelines 2 and 3. Professional social work 

education, a four-year undergraduate program, is the accepted preparation for beginning 

competence in social work practice. In view of the importance of the four-year curriculum, 

the last two years of which are the ìmajorî courses that are crucial to the professional 

socialization of the prospective social worker, such curriculum cannot be substituted by 

previous experiences or informal training, even if such training were undertaken in a 

social welfare agency.


This Resolution shall take effect fifteen (15) days following its publication in the Official 

Gazette or in a newspaper of general circulation in the Philippines, whichever is earlier. 


(SGD.) THELMA LEE-MENDOZA 

Chairman 

(SGD.) ROSARIO B. DELA ROSA (SGD.) NELLY C. MIRANDA 

Member Member 

(SGD.) MARILYN F. MANUEL (SGD.) JOSEFINA D. PINEDA 

Member Member 

ATTESTED: 



APPROVED: 


Chairperson 




óo0oó 

Board Resolution No. 01, s. 2003 

Amendments to Section 39, Article VIII of Board Resolution No. 02, 

Series of 2002, (Rules and Regulations Implementing PRC 

Resolution No. 2000-663, s. 2000) 

WHEREAS, to implement the provisions of Resolution No. 2000-663, Series of 2000, 

the Board of Agriculture issued Board Resolution No. 02, Series of 2002 entitled ìRules and 

Regulations Implementing PRC Resolution No. 2000-663, duly approved by the Commissionî; 

WHEREAS, in issuing Board Resolution No. 02, Series of 2002, the Board of Agriculture 

failed to provide for the Registration Without Examination of ìThose who have not passed the 

Civil Service Examination for Agriculture but have served the industry in either private or 

public capacity for not less than five (5) yearsî. (see Section 75, R.A. No. 8435 the ìAgriculture 

and Fisheries Modernization Act of 1997î); 

WHEREAS, there is a need to amend Sec. 39, Article VIII of Board Resolution No. 02, 

Series of 2002 to provide for the registration of agriculturists who have not passed the Civil 

Service Examination for Agriculturists but have served the industry in either private or public 

capacity for not less than five (5) years;

1688 


NOW, THEREFORE, the Board resolved as it hereby resolves to amend Sec. 39, 

Article VIII of Board Resolution No. 02, Series of 2002, as follows: 

ìSEC. 39. Registration of Agriculturists Without Examination ñ Upon approval 

of the application and payment of the prescribed fees, certificate of registration/professional 

license and professional identification card shall be issued to 

the applicant for registration as agriculturist without examination who can prove to 

the satisfaction of the Board that he/she falls under Category A, B or C, below: 

ìCATEGORY A. The applicant is a graduate of any of the following degrees in Agriculture, 

namely: 

ì1. Bachelor of Science in Agriculture (General Course) 

ì2. Bachelor of Science in Agricultural Administration 

ì3. Bachelor of Science in Agricultural Chemistry 

ì4. Bachelor of Science in Agricultural Education 

ì5. Bachelor of Science in Agricultural Extension 

ì6. Bachelor of Science in Agricultural Extension and Communications 

ì7. Bachelor of Science in Agricultural Technology 

ì8. Bachelor of Science in Agricultural Statistics 

ì9. Bachelor of Science in Agronomy 

ì10. Bachelor of Science in Animal Husbandry 

ì11. Bachelor of Science in Food Technology 

ì12. Bachelor of Science in Agriculture, major in any of the following: 

ìa. Agribusiness 

ìb. Agricultural Administration 

ìc. Agricultural Chemistry 

ìd. Agricultural Economics 

ìe. Agricultural Education 

ìf. Agricultural Extension 

ìg. Agricultural Marketing 

ìh. Agricultural Statistics 

ìi. Agronomy 

ìj. Animal Science 

ìk. Biological Science 

ìl. Crop Protection 

ìm. Crop Science 

ìn. Entomology 

ìo. Food Technology 

ìp. Horticulture 

ìq. Plant Breeding 

ìr. Plant Pathology 

ìs. Post-Harvest Technology 

ìt. Soil Science 

from a school, college or university established or recognized by the Government, Provided, 

that the applicant: (1) has passed any of the civil service examinations for Agriculturists or 

the Career Service (professional) examination given by the Civil Service Commission (CSC)


and (2) has served the agriculture industry in either the government or private sector for not 

less than five (5) years; provided, further, that the educational qualification, civil service 

eligibility and service in the agriculture industry of the applicant have been obtained, acquired 

or earned and rendered, respectively, before the effectivity of R.A. No. 8435.î 

ìCATEGORY B. The applicant has obtained (1) any of the following degrees, namely: 

ìa Bachelor of Science in Zoology 

ìb. Bachelor of Science in Botany 

ìc. Bachelor of Science in Economics 

ìd. Bachelor of Science in Commerce 

ìe. Bachelor of Science in Business Administration 

ìf. Bachelor of Science in Medical Technology 

ìg. Bachelor of Science in Chemistry 

ìh. Bachelor of Science in Pharmacy 

ìi. Bachelor of Science in Chemical Engineering 

ìj. Bachelor of Science in Nutrition and Dietetics 

ìk. Bachelor of Science in Statistics 

ìl. Bachelor of Science in Agricultural Engineering 

ìm. Bachelor of Science in Biology 

ìn. Bachelor of Science in Food Technology, or 

ìo. Bachelor of Science in Education, or 

ì(2) obtained a masterís degree (without a bachelorís degree in Agriculture), major in any 

of the fields of specialization in Agriculture, as provided in Section 28 hereof, from a school 

college or university recognized or established by the Government; Provided, that the applicant 

in this Category has earned at least eighteen (18) units of agriculture subjects in any 

fields of specialization in agriculture and has accomplished the following: 

ì(a) passed any of the civil service examinations for agriculturists or Career Service 

(professional) examination given by the CSC, and 

ì(b) served the agriculture industry in either government or private sector for not less 

than five (5) years; 

Provided, further, that the educational qualifications, civil service eligibility and service in the 

agriculture industry of the applicant have been obtained, acquired or earned and rendered, 

respectively, before the effectivity of R.A. No. 8435.î 

ìCATEGORY C. The applicant has obtained a doctorate degree, major in any of the 

fields of specialization I Agriculture, from a school, college or university recognized or 

established by the Government or from a reputable college or university abroad, and has 

accomplished the following: (1) has passed the civil service examination for Agriculturists or 

the Career Service (Professional) examination given by the CSC, and (2) has served the 

agriculture industry for at least five (5) years; Provided, that the educational qualifications, 

civil service eligibility and service in the agriculture industry of the applicant have been 

obtained, acquired or earned and rendered, respectively, before the effectivity of R.A. No. 

8435.î 

APPLICANTS FOR REGISTRATION AS AGRICULTURIST WITHOUT EXAMINATION 

WHO POSSESS ANY OF THE EDUCATIONAL QUALIFICATIONS PROVIDED IN


CATEGORIES, A, B, AND C BUT WHO HAVE NOT PASSED THE CIVIL SERVICE 

EXAMINATION FOR AGRICULTURE SHALL LIKEWISE BE REGISTERED AS 

AGRICULTURIST, PROVIDED THAT THEY HAVE SERVED THE INDUSTRY IN EITHER 

PRIVATE OR PUBLIC CAPACITY FOR NOT LESS THAN FIVE (5) YEARS. 

ìDocumentary requirements for registration as Agriculturist without examination: 

ì1. Category A: 

ìThe applicant for registration as Agriculturist without examination under this Category 

shall file an application subscribed under oath accompanied by the following documents: 

ìa) The original or certified copy of the applicantís transcript of records with the 

number of special order of graduation if graduated from a private school, college 

or university recognized by the Government showing that the applicant is a 

graduate of any of the degrees mentioned in category A. 

ìb) The original or certified copy of the report of rating issued by the CSC showing 

that the applicant has passed a civil service examination in Agriculture or the 

Career Service (Professional) examination given by the CSC. 

ìc) If employed in the Government, the original or certified copy of the service 

record of the applicant showing that 1) the applicant has served for at least five 

(5) years in a position which requires, as qualifications, the services of a graduate 

of a baccalaureate degree in Agriculture and a civil service eligibility in agriculture 

or the Career Service (Professional) eligibility, or has served as faculty 

member/instructor in a school, college or university established by the Government 

where he/she taught agriculture subjects for at least five (5) years or (2) if 

employed in the private sector, a certification under oath issued by the authorized 

official/officer of the firm, company, association or corporation engaged in 

the agriculture industry showing that the applicant has served for at least five (5) 

years in a position which requires the services of a graduate of a baccalaureate 

degree in Agriculture, or the certification under oath of the authorized official/ 

officer of a private school, college or university recognized by the Government 

showing that the applicant has been appointed and served for at least five (5) 

years as faculty member/instructor and has taught subjects in Agriculture. 

ì2. Category B: 

ìThe applicant for registration as Agriculturist without examination under this Category 

shall file an application subscribed under oath accompanied by the following documents: 

ìa) The original or certified copy of the transcript of records with the number of 

the special order of graduation from a private school, college or university recognized 

by the Government showing that the applicant is a graduate of any of the 

degrees mentioned in category B(1) and (2) and the original or certified copy of 

the transcript of records showing that the applicant has completed/earned at 

least eighteen (18) units of agriculture from a school, college or university established 

or recognized by the Government.


ìb) The original or certified copy of report of rating issued by the CSC showing 

that the applicant has passed a civil service examination in Agriculture or a Career 

Service (Professional) examination given by the CSC. 

ìc) If employed in the Government, the original or certified copy of the service 

record of the applicant showing that the applicant has served for at least five (5) 

years in a position requiring, as qualifications, a baccalaureate degree in Agriculture 

and a civil service eligibility in Agriculture or the Career Service (Professional) 

eligibility, or has served as faculty member/instructor in a school, college 

or university established by the Government where he/she taught subjects in 

agriculture or if employed in the private sector, a certification under oath issued 

by the authorized official/officer of the firm, company, association or corporation 

engaged in the agriculture industry showing that the applicant has served for at 

least five (5) years in a position which requires the services of a graduate of a 

baccalaureate degree in Agriculture, or a certification under oath of the authorized 

official/officer of a private school, college or university recognized by the 

Government showing that the applicant has been employed as instructor/faculty 

member and has taught subjects in Agriculture for at least five (5) years. 

ì3. Category C: 

ìThe applicant for registration as Agriculturist without examination under this Category shall 

file an application subscribed under oath accompanied by the following documents: 

ìa) The original or certified copy of transcript of records with the number of 

special order of graduation if graduated from a private school, college or university 

recognized by the Government showing that the applicant is a graduate of the 

degree of Doctor of Philosophy in Agriculture, or in Teaching Agriculture in any 

of the fields of specialization in Agriculture provided in Section 28 hereof, or if 

obtained from a college or university abroad, in addition to the transcript of records, 

a document issued by the authorized official of the college or university where the 

applicant graduated his doctorate degree in Agriculture certifying/stating that the 

college or university has been recognized or authorized to operate as such or 

university or has been established by the Government of the state or country 

where the college or university is located. 

ìb) The original or certified copy of transcript of records issued by a school, 

college or university with the number of special order of graduation, if graduated 

from a private school, college or university recognized by the Government showing 

that the applicant is a graduate of any of the degrees in Agriculture mentioned 

in Category A. 

ìc)The original or certified copy of report of rating issued by the CSC showing 

that the applicant has passed a civil service examination in Agriculture or the 

Career Service (Professional) examination given by the CSC. 

ìd) If employed in the Government, the original or certified copy of the service 

record showing that the applicant has rendered service for at least five (5) years 

in a position which requires, as qualifications, a baccalaureate degree in Agriculture 

and civil service eligibility in Agriculture or the Career Service (Professional)

1692 


eligibility, or has rendered services for at least five (5) years as faculty member/ 

instructor in a school, college or university established by the Government where 

he/she taught Agriculture subjects, or if employed in the private sector, a certification 

under oath issued by the authorized official/officer of the firm, company, 

association or corporation engaged in the agriculture industry certifying that the 

applicant has served for at least five (5) years in a position which requires the 

services of a graduate of a baccalaureate degree in Agriculture, or a certification 

under oath issued by the authorized official/officer of a private school, college or 

university recognized by the Government showing that the applicant has been 

appointed as instructor/faculty member and has taught subjects in agriculture for 

at least five (5) years. 

APPLICANTS FOR REGISTRATION AS AGRICULTURIST WITHOUT EXAMINATION 

COVERED BY THE AMENDMENT INSERTED AFTER CATEGORY C (APPLICANTS 

QUALIFIED FOR REGISTRATION AS AGRICULTURIST WITHOUT EXAMINATION) SHALL 

COMPLY WITH ALL THE DOCUMENTARY REQUIREMENTS PROVIDED IN THE CATEGORY 

WHERE THEY QUALIFIED BY EDUCATIONAL QUALIFICATIONS AND EXPERIENCE/ 

SERVICE SHALL BE EXEMPT FROM SUBMITTING DOCUMENTARY REQUIREMENTS 

ON CIVIL SERVICE ELIGIBILITY. 

ìIn all the above Categories, the application shall also be accompanied by a clearance 

from the National Bureau of Investigation (NBI) issued not earlier that six (6) months prior to 

the filing of the application and if the applicant is also a government employee, a clearance 

from the Ombudsman must also be attached to the applicationî. 

This Resolution shall take effect after fifteen (15) days following the completion of its 

publication in the Official Gazette or in a newspaper of general circulation in the Philippines, 

whichever comes earlier. 


(SGD.) FORTUNATO A. BATTAD 

Chairman 

(SGD.) GONZALO O. CATAN, JR. (SGD.) VICENTE L. DOMINGO 

Member Member 

(SGD.) NORA B. INCIONG (SGD.) RODOLFO M. ELA 

Member Member 

ATTESTED: 



APPROVED: 


Chairperson 



óo0oó



PRC Resolution No. 2002-75 (A) 

Declaring the Oath Taking Fees being collected by the Board of 

Professional Teachers pursuant to Board Resolution 799 dated 

October 30, 2002 are not Funds of the Commission or Income 

Generated in Accordance with the Mandate of the 

Professional Regulation Commission 

WHEREAS, section 7, par. g of Republic Act No. 8981, otherwise known as ìThe PRC 

Modernization Act of 2000î empowers the Commission ìto determine and fix the amount of 

fees to be charged and collected for examination, registration, registration without examination, 

x--------------------------------x, including surcharges and other fees not specified under 

provisions of R.A. No. 465, as amended by R.A. No. 6511 to charge and collect reasonable 

fees at the rates higher than the rates provided thereunder subject to the approval of the 

Office of the President.î 

WHEREAS, Section 6, par. D of Republic Act No. 7836 otherwise known as the ìPhilippine 

Professionalization Act of 1994î states that the Board has the authority to prescribe and 

collect examination and other fees as it may deem proper.î 

WHEREAS, the Board of Professional Teachers passed Resolution No. 799 dated 

October 30, 2002 authorizing the representative designated by the President of National 

Organization of Professional Teachers Inc. (NOPTI) to collect oath taking fees from participating 

Board passers who in turn shall deliver the collection only to the designated Board member at 

the place where the oathtaking is celebrated. 

WHEREAS, it is highly probable that the amount to be collected or have been collected 

by the Board representing as oath taking fee might be construed as public funds generated 

by and for the Commission. 

WHEREAS, in the light of public interest and government transparency, it is imperative 

that the Commission should make a clarification as to the fact that oathtaking fees under 

Board Resolution No. 799 dated October 30, 2002 are not part of the official fees authorized 

under Section 6, par. D of R.A. No. 7636 and/or Section 7, par. G of R.A. No. 8981, hence 

are not government funds or income generated by the Commission. 

WHEREFORE, Be it resolved as it hereby resolves that the Commission hereby officially 

declare that the amount being collected by the Board of Professional Teachers does not form 

part of the funds of the Commission or income generated pursuant to the mandate of the 

Professional Regulation Commission under Republic Act No. 8981. 

RESOLVED FURTHER, that copies of this Resolution be furnished the Office of the 

President of the Republic of the Philippines, the Commission on Audit, the Board of 

Professional Teachers and PRC Commissioners and Directors. 

This resolution shall take effect after fifteen [15] days following its publication in the 

Official Gazette or in a newspaper of general circulation, whichever comes earlier. 

Adopted: 26 Nov. 2002

1694 


APPROVED: 


Chairperson 




óo0oó 

PRC Resolution No. 2002-76 

s. 2002 

Revised Guidelines and Procedures in Filing of 

Applications for Licensure Examinations 

WHEREAS, it is necessary to revise and improve the existing guidelines and procedures 

in the filing of applications for licensure examinations to attain the following objectives: 

a) To facilitate the filing and processing of applications for examination. 

b) To establish the identity of the applicant-examinee for examination. 

c) To establish genuineness or authenticity, completeness and accuracy of documentary 

requirements supporting an applicantís qualification to take the examination. 

d) To ensure that ONLY qualified applicants are admitted in the licensure examinations. 

e) To eliminate withholding of results of examination due to non-compliance of requirements, 

thereby strictly observing the ëNO DEFERREDí policy. 

f) To deter fixers and unscrupulous persons from victimizing applicant-examinees in licensure 

examinations. 

WHEREFORE, the Commission hereby adopts the following revised guidelines and 

procedures that shall be complied with/followed in the filing of applications for licensure 

examinations for all regulated professions under its jurisidiction: 

I. FILING OF APPLICATIONS 

a) As a rule, filing of applications shall be done personally by the applicant-examinee to 

clearly establish his/her identity and to prevent somebody to take the examination for or 

on behalf of the real applicant-examinee. 

b) Filing of applications by a representative or in bunch by schools, colleges, universities, 

and other entities, and through the mail SHALL NOT BE ALLOWED.


c) Applications shall be filed/submitted to the filing centers designated by the Commission 

on or before the twentieth day before the first day of the scheduled licensure examination 

except the deadline for filing applications for professional teachers licensure examination 

which is specifically designated on a definite date. 

c.1) Applications accepted and reviewed by the regional offices shall be submitted to the 

Application Division/Units in the Central Office on staggered basis by batch of 20 or more 

documents before the deadline for filing, but in no case shall be later than 2 days after the 

deadline. All accepted and reviewed application forms to be transmitted by the Regional 

Offices must be arranged and listed alphabetically by board examination on the transmittal 

form to facilitate checking. 

d) NO applications shall be accepted after the deadline for filing application. 

II. DOCUMENTS TO ACCOMPANY AN APPLICATION FOR LICENSURE EXAMINATION 

The applicant shall submit the original with a photo-xerox copy for office file of the 

following documents: 

a) Transcript of Records (TOR) with printed Special Order Number, Date of Graduation, and 

Seal of the School for graduates of schools, colleges and universities recognized by the 

government 

(Extract/s of Special Order Number issued by the CHED shall not be accepted.) 

b) Original Certificate of Live Birth issued by the Local Civil Registrar (LCR) with Registration 

Number indicated or copy of authenticated Birth Certificate by the National Statistics 

Office (NSO) 

c) Marriage Contract for married female applicants 

d) Four (4) pieces passport-size colored picture with complete name on the tag with white 

background 

e) Community Tax Certificate (current) 

f) Other documentary requirements as required by the law regulating the profession. 

Applications with incomplete documents or documents with erroneous or inaccurate 

entries shall not be accepted. 

III. PROCEDURES IN FILING AND PROCESSING OF APPLICATION 

a) The applicant-examinee shall secure the Action Sheet Form from the following: 

a.1) Customer Service Center (CSC) - located at the grounds of the PRC Central Office 

a.2) Office of Professional Teachers located at the 3 rd floor, PRC Annex Building, for the 

Licensure Examination for Teachers


a.3) Customer Service Counter (CSC) in all Regional Offices for all professions 

The Action Sheet is free of charge. Photo/Xerox copies of the Action Sheet used by 

applicants shall not be accepted. 

b) The applicant-examinee shall accomplish the Action Sheet carefully and completely in 

accordance with the instructions posted on the bulletin boards of the PRC Central and 

Regional Offices and/or instructions printed at the back of the form itself. 

b.1) Repeaters and Conditioned applicant-examinees shall go to the Records Section/ 

Unit for verification of the previous examinations taken and subjects for re-examination, 

respectively, which shall be duly verified and signed by the personnel of the Records 

Section/Unit. 

c) The Action Sheet shall be accompanied by all documentary requirements for licensure 

examinations listed in paragraph III. 

d) Applicant-examinee with foreign-sounding names shall be referred to the Legal Division in 

the Central Office or Legal Unit of the Regional Offices. 

e) If the applicant is found qualified and all the documentary requirements are genuine or 

authentic and complete, the Application Processor shall stamp at the back of the photo/ 

xerox copies of the documents submitted the Certification of Authenticity to be signed by 

the processor and the applicant-examinee for office file, and shall then issue the following 

blank forms: 

e.1) Computerized Application Form (CAF) 

e.2) Permanent Examination and Registration 

Record Card (PERRC) for new applicants. For repeaters and removal examinees, 

the original PERRC shall be retrieved from the files of the Application Division/Units. 

e.3) Notice of admission (NOA) 

f) If the application requires the evaluation of experience, training, apprenticeship, etc., of 

the Professional Regulatory Board, the applicant shall be instructed to come back on a 

specific date to verify if his/her application is approved. The applicant shall be issued the 

blank application forms and shall be required to pay the examination fee only when the 

application is approved. 

g) The applicant-examinee shall personally accomplish the Computerized Application Form 

(CAF), Permanent Examination and Registration Record Card (PERRC) and Notice of 

Admission (NOA). It cannot be delegated to any person, except for disabled examinees 

such as blind examinees, where a senior official of the Application Division/Unit shall 

accomplish the forms with the information supplied by the applicant-examinee. All entries 

should be legibly written. 

h) After payment of the examination fee, the Issuing Officer shall make the final review of 

qualifications and documents, return the original documents, and shall issue the Notice of 

Admission (NOA) and the Applicantís Stub to the applicant-examinee.


Issuance of the Notice of Admission signifies the conditional admission of the applicantexaminee 

in the licensure examination pending final review and verification of documents 

and qualifications, and approval by a Member of the Professional Regulatory Board. 

i) All processed and conditionally approved applications by the Application Division/Units in 

the Central and Regional Offices shall be signed by a Member of the Professional Regulatory 

Board before the start of the examination. The Professional Regulatory Board may 

delegate this function to the Application Division/Units in the Central and Regional Offices 

in writing. 

IV. REPEALING CLAUSE 

Memorandum Order No. 99-11 dated November 24, 1999; Office Order No. 99-61 

issued on March 25, 1999; Office Memorandum No. 97-29 issued on November 19, 1997; 

Office Order No. 31 issued on September 26, 1990; Office Order No. 2001-166 dated 

October 3, 2001, and Sec. 3, Art. III of the Rules and Regulations Governing the Regulation 

and Practice of Professionals, as amended, insofar as they allow the filing of applications for 

licensure examination by mail and in bunch are hereby repealed. Resolutions/Office Orders/ 

Memorandum Circulars and other issuances of the Chairperson of the Commission and 

Professional Regulatory Boards (PRBs) which are inconsistent with the provisions of this 

Revised Guidelines and Procedures are hereby repealed, amended or modified accordingly. 

V. EFFECITIVITY 

This Resolution shall take effect after fifteen (15) days following its publication in the 

Official Gazette or in a newspaper of general circulation in the Philippines, whichever is 

earlier. 

Let copies of this Resolution be furnished all schools, colleges or universities, public or 

private, offering courses for licensure examinations and accredited professional organizations 

for their information and guidance. 


APPROVED: 


Chairperson 

(SGD.) ALFONSO G. ABAD (SGD.) AVELINA DELA REA-TAN 



óo0oó 

Resolution No. 2003-117, s. 2003 

Amendment of Paragraph No. 2 of Resolution No. 298, Series of 1994, 

Governing the Guidelines on the Release of Topnotchers Examinees 

in the Professional Licensure Examination


WHEREAS, the Commission has been consistent in upholding and upgrading its policies 

in the release of topnotchers in every licensure examination pursuant to its powers and 

functions under Republic Act No. 8981; 

WHEREAS, the release of topnotchers examinees in the professional licensure 

examinations will bestow honor and distinction to the topnotchers and their alma maters for 

their laudable excellent performance and motivate future examinees and their colleges to 

excel through qualitative educational preparation and the Department of Education, Culture 

and Sports (DECS) to enhance the standard of education; 

WHEREAS, there is a need to encourage greater number of future examinees to 

standout in their chosen fields that would necessarily augment the availability of competent 

professional services in the country; 

WHEREAS, the Commission resolves to make ideal the standard number of the 

topnotchers in relation to the aggregate number of examinees in each licensure examination. 

NOW, THEREFORE, by virtue of paragraph (b) of Sec. 7 of R.A. 8981, specifying the 

Commissionís power to issue administrative issuances to enforce its function and improve its 

services in relation to paragraph (d) of the same section, to approve the release of examination 

results, the Commission hereby resolves, as it is so RESOLVED, to amend paragraph 2 of 

Resolution No. 298, Series of 1994, to read as follows: 

ì2. The release shall include the first twenty (20) topnotchers wherein the 

examination has one thousand five hundred (1500) or more examinees provided 

that the number of successful examinees be not less than one hundred 

(100); or the first ten (10) topnotchers wherein the examination has 

less than one thousand five hundred (1,500) but not less than one hundred 

(100) examinees provided that the number of successful examinees be not 

less than fifty (50). Otherwise, no listing of topnotchers shall be made.î 

FURTHER, RESOLVED, that the Professional Regulatory Board, the Rating Division, 

and the Legal and Investigation Division, strictly implement the herein resolution. 

FURTHERMORE RESOLVED, that copy of the herein Resolution be furnished to the 

Commission on Higher Education for the dissemination to all colleges and universities with 

courses requiring licensure examination. 

FINALLY, RESOLVED, that this Resolution shall be effective after fifteen (15) days 

following the completion of its publication in the Official Gazette or in a newspaper of general 

circulation. 


APPROVED: 


Chairperson






óo0oó 



(PAPS) 1003 - CIS Environment - Database Systems 



PHILIPPINE VETERANS AFFAIRS OFFICE 



Rules and Regulations Implementing Executive Order No. 198 ìCreating the 

Military Service Board, Providing Funds Therefor and For Other Purposesî 

Pursuant to Section 4 of Executive Order No. 198 dated 21 April 2003 ìCreating the 

Military Service Board, Providing Funds Therefor and for Other Purposesî, the following 

Rules and Regulations are hereby promulgated for the effective implementation thereof: 

SECTION 1. Coverage - These Rules shall apply to all existing claim-applications duly 

filed pending with the defunct Military Service Board created under Republic Act No. 8440 

for confirmation of military services in the Philippines during the period beginning December 

8, 1941 and ending July 3, 1946. For this purpose, only those pending claim-applications 

cognizable by the defunct Military Service Board as contemplated under its enabling law 

including all claims pertaining to so-called ìNot Carried But Processedî (NCBP) guerillas of 

World War II, shall be acted upon. 

SECTION 2. Definition of Terms - For the purpose of and when used in connection 

with the confirmation of World War II military service as well as for the purpose of availing of 

or entitlement to benefits, the following shall be construed in the sense and within the purview 

of the provisions of Republic Act No. 65, as amended by Republic Act No. 7696 and Republic 

Act No. 8440; 

a. Board - refers to the new Military Service Board created by the Department of National 

Defense (DND) by virtue of Executive Order No. 198.

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b. Unrecognized Guerillas - refers to any military service claimed by any person to have 

been rendered during World War II in the Philippines for the period beginning December 8, 

1941 and ending July 3, 1946, which rendition of service is not carried in the Approved 

Revised Reconstructed Guerilla Roster of 1948 with no record of payment. 

c. Recognized Veterans Organization - refers to any group of patriotic volunteers composed 

of civilians and members of the Philippine Commonwealth Army disbanded upon the 

fall of Bataan who organized themselves into an irregular military unit for the purpose of 

participating in the underground or guerilla resistance movement against the Japanese Imperial 

Army that occupied the Philippines during World War II, whose wartime existence and 

operations are borne out by official documents in the military archives of the Republic of the 

Philippines and the United States Government such as Approved Revised Reconstructed 

Guerilla Roster of 1948; the book entitled the Guerilla Resistance Movement in the Philippines 

and the Intelligence Series published by General Douglas MacArthurís GHQ Staff 

under the direction of Major General Charles A Willoughby, which contained declassified 

intelligence data gathered by radio contacts and penetration agents of the G-2 Allied Intelligence 

Bureau (1942-43) and the G-2 Philippine Regional Section (1943-44); and military 

documents and files available. 

SECTION 3. Composition of the Board - The Board shall be composed of a Chairman 

and four (4) members to be nominated by the Administrator, Philippine Veterans Affairs 

Office (PVAO) to the Secretary of National Defense (SND), who shall appoint them to the 

Board. The composition shall be as follows: 

a. The Chairman shall be a retired military officer, preferably a World War II veteran of 

known probity; 

b. Four (4) other distinguished veterans of World War II nominated by existing and duly 

recognized veteranís organizations. 

In case any member of the Board fails to finish his term of one (1) year, a replacement 

shall be immediately appointed by the SND from the list of nominees to be submitted by the 

Administrator, PVAO. 

SECTION 4. Powers and Functions of the Board - The Board shall have exclusive 

authority to perform the following powers and/or functions: 

a. To process the existing claim-applications contemplated under Section 1 hereof; and 

b. To determine the validity of the claim and the qualifications of the applicants for military 

veteran status strictly in accordance with the provisions of these Rules. 

For this purpose, all members of the Board shall unanimously approve the Confirmation 

of Military Service for which a Certificate to that effect shall be issued therefor. 

SECTION 5. Exclusively and Finality of the Decision of the Board - The Board shall 

have the exclusive authority to pass judgment on a claim for confirmation of the military 

service, for all intents and purposes.The decision of the Board shall be final and unappealable.


SECTION 6. Period of Existence - The Board shall cease to exist one (1) year after 

the date of effectivity of EO No. 198. 

SECTION 7. Unauthorized Fees - Unless otherwise allowed by the Administrator, PVAO 

in writing, no fee/s shall be charged from an applicant/claimant in connection with the 

processing and adjudication of any claim-applications for confirmation of military veteran 

status. 

SECTION 8. Fraudulent Claims - When fraud, collusion, falsification, misrepresentation 

of facts or other kinds of anomaly in whatever form is shown to have been committed by 

or with the knowledge of any applicant in connection with any claim-applications covered 

under Section 1 hereof, the application shall be disapproved, or if already approved, such 

approval or any award of any honor or benefit on the basis of the confirmation of honor 

under EO No. 198 shall be voided as of the date of effectivity. 

The party or parties to the fraud, including those who executed false testimonies or 

issued falsified documents shall be liable for appropriate criminal, civil or administrative 

sanctions, in addition to the refund of such amount in compensation or benefits that the 

applicant may have received as a result of the fraudulent claims. In case, the guilty party is a 

pensioner of PVAO, the same acts shall cause the termination of his/her pension benefits 

upon recommendation of the Board and upon approval of the Administrator, PVAO. 

SECTION 9. Establishment of Status as World War II Veteran - Military service 

allegedly rendered by an applicant/claimant shall be established by sufficient evidence adduced 

in an appropriate investigation conducted by the Board to determine oneís status as a 

military veteran. For this purpose, investigation shall include the evaluation and appreciation 

of the documents submitted and made in support of the application as required under these 

Rules, and the conduct of interview and/or spot/field investigations, as may be necessary. 

SECTION 10. Investigation and Evaluation of Guerilla Service and Determination of 

Status of Veteran - All claim-applications by unrecognized guerillas covered under Section 

1 hereof shall be subject to investigation/evaluation by the Board to establish their alleged 

wartime services. Adjudication of all the claims shall be on the basis of the evaluation of any 

and all documentary evidence required under Sections 11 and 12 hereafter, upon due correlation 

thereof with the findings adduced in the investigation of the applicant concerned and 

the testimonies of witnesses, if any conducted: Provided that, in all determination of the 

status as military veteran, the identity and existence of the applicant shall have been satisfactorily 

established: Provided further, that the authenticity of the documents submitted and the 

credibility of the applicant and his/her witnesses regarding their attestation had been previously 

determined. 

SECTION 11. Documentary Evidence - The following documents shall concur to support 

the application for confirmation of military service/s: 

a. Any or all of the following documents: Original papers received from the guerilla unit, like: 

i. Assignment or enlistment papers; 

ii. Special or general orders; 

iii. Instructions, memoranda, circulars; 

iv. Personal commendations; 

v. Discharge or separation papers;

1702 


vi. Military communications; or 

vii. Any written matter subscribed by superior officers and received while in the 

service; and 

b. Certified copy of either of the following: 

i. Original roster of recognized units of the applicantís gueriilla organization submitted 

to the United States Armed Forces authorities on or before 30 June 1948 

as certified to by the Adjutant General, AFP or the custodian of any government 

depositary of such roster; or 

ii. Original roster from the records of unrecognized guerillas of the USA Army 

Center (USAAC), Missouri USA, which shall be made available by the PVAO. 

SECTION 12. Additional Evidence - In addition, the Board may require the following: 

a. Sworn affidavit of the applicant himself; 

b. Affidavits of his immediate officers and comrades-in-arms who are recognized guerillas 

or pensioners of PVAO, attesting categorically in detail and in chronological order to the 

military service rendered by applicant in a recognized or deserving guerilla organization 

from the date of his induction/enlistment therein until his separation or discharge therefrom; 

and/or 

c. A sworn statement of reputable citizens in the locality where the applicant was assigned or 

detailed in support of any of the documents stated in paragraphs (a) and (b) of the preceding 

section. 

SECTION 13. Aliases and Discrepancies in Name - In addition to those prescribed 

pursuant to the above sections, as far as may be practicable, aliases and discrepancies in 

name shall be acted upon, as follows: 

a. When an applicantís name in the guerilla record available appears to be an alias, his 

identity shall be established, as follows: 

i. By attestation under oath of his unit Commanding Officer and/or two (2) other 

superior officers that the alias and his true name refer to one and the same 

person; and 

ii. By sworn statement of at least two (2) comrades-in arms who have personal 

knowledge of the fact that the applicant used the said alias. 

b. Where the name of the claimant, his/her surviving spouse, child or parent appearing in 

any document is different from that appearing in the records of the Civil Registrar or the 

church, the discrepancy shall be explained by the applicant/claimant concerned and at least 

two (2) credible witnesses by sworn statements, without prejudice to the conduct of field or 

spot investigation to ascertain the true name and identity of the person concerned: Provided, 

however, that proper court order shall be necessary in cases so required by law.


SECTION 14. Prospective Entitlement - Honors, awards and decorations resulting 

from the implementation of EO No. 198 shall accrue to any person. However, all monetary 

compensation and benefit shall be applied prospectively. 

SECTION 15. Resultant Benefits - Any entitlement of a person to receive veteransí 

benefits as a result of the implementation of EO No. 198 shall be administered by PVAO in 

accordance with existing laws, rules and regulations. 

SECTION 16. Authority of PVAO to Enforce these Rules and Regulations - The 

administrator, PVAO shall issue such orders, circulars and memoranda, not inconsistent with 

these Rules and Regulations, which are necessary for the effective implementation hereof. 

SECTION 17. Duties of Officers and Employees - All officials and employees mandated 

to implement these Rules shall strictly observe them, perform their duties with honesty 

and efficiency, and maintain the high ethical and progressive standard of public service. 

SECTION 18. Financial Requirement - The Administrator, PVAO shall determine the 

amount necessary for the implementation of EO No. 198, subject to the approval of the SND. 

Such budget shall be provided by PVAO and DND from their existing budget, to be augmented 

by the Presidentís Contingency Fund, if necessary. 

SECTION 19. Repealing Clause - All orders, issuances, rules and regulations or parts 

thereof inconsistent with this Executive Order are hereby replaced or modified accordingly. 

SECTION 20. Separability Clause - If any provision of these Rules and Regulations 

shall be held invalid, the remaining provisions shall be given force and effect, as completely 

as if the provisions held invalid had not been included therein. 

SECTION 21. Effectivity - These Rules and Regulations shall take effect immediately. 


(SGD.) ANGELO T. REYES 

Secretary 

PUNONG HIMPILAN TANODBAYBAYIN NG PILIPINAS 

(Headquarters Philippine Coast Guard) 


I. AUTHORITY: 


Inspection Guidelines for Domestic Tankers

1704 


A. Presidential Decree No. 600 

B. Presidential Decree No. 979 

C. International Convention of 1973 for the Prevention of Pollution from Ships, as 

modified by the Protocol of 1978 (MARPOL 73/78) 

D. SOLAS 74/78 

E. ISM Code 

F. Civil Liability Convention, 1992 

II. REFERENCES: 

A. MARPOL 73/78 

B. SOLAS 74/78 

C. Oil Companies in the Philippines Vessel Inspection Guidelines 

D. International Safety Guide for Oil Tankers and Terminals (3 rd Ed.) 

E. ISM Code 

F. CLC ë92 

III. SCOPE 

This Memorandum Circular shall apply to all Philippine registered oil tankers engaged 

in domestic trade. 

IV. PURPOSE 

To prescribe the policies, procedures, and common vessel inspection guidelines 

implementing the provisions of the MARPOL 73/78, Accepted Industry Guidelines, CLC 92, 

SOLAS 74/78, ISM Code and PCG rules and regulations. 

V. DEFINITION OF TERMS 

A. Marine Pollution - the discharge of any form substances whether liquid, gaseous or solid 

that may render such waters detrimental or may affect public health, marine life, sea birds 

or the safety and welfare of domestic, commercial, industrial, agricultural, recreational 

establishments/institutions. 

B. Inspection Apprehension Report - a written document issued by an Inspection and 

Apprehension Officer of the Philippine Coast Guard to any person who is apprised of 

prima facie finding by the former of the latterís violation of laws, rules and regulations on 

marine pollution. 

C. Vessel Inspection Guidelines - a set of checklist to be adopted by authorized inspectors 

of domestic tankers to implement minimum standards for domestic tankers for safety and 

pollution prevention. 

D. Authorized Inspectors - are trained and qualified individuals as published by PCG in 

consultation with the Industry. 

E. Industry - means Oil Industry/Company. 

VI.PROCEDURE:


A. Inspection: 

1. Joint inspection by PCG inspectors and Industry inspectors maybe conducted on local 

tankers whenever either both parties agreed to conduct such inspection to ascertain 

suitablitiy of tankers. 

2. PCG inspector may inspect tankers for purposes of performing its mandated functions 

under relevant laws and regulations. 

3. Inspection of tanker may be limited within a period of six (6) months unless otherwise 

there is reasonable ground to believe that said tanker is substandard or in cases of 

accident, marine protest, pollution and other violations of maritime laws. 

4. Oil Industry Inspectors may inspect the tankers at any time for purposes of ship vetting. 

The inspection may be conducted jointly with authorized PCG Inspector. In cases where 

there are no available PCG Inspector, the Industry Inspector may conduct such inspection 

provided that PCG will be properly informed and result of such inspection furnished to 

Coast Guard District and MEPCOM. 

5. All authorized inspectors shall utilize the Vessel Inspection Guidelines listed as ANNEX 

to this Circular as a common checklist for minimum standards for tankers. 

6. PCG and the Industry shall publish in appropriate order all authorized inspectors for 

tankers. 

B. Notification and Rectification of Deficiency: 

After the conduct of inspection of tankers, the inspectors shall duly notify the master of 

the tanker and its ship-owner, charterer or company managing the tanker. The concerned 

master, owner, or ship management company must rectify deficiencies noted within fifteen 

(15) days and request for re-inspection. 

No vessel shall engage in trade unless major deficiencies are rectified and considered 

suitable by authorized inspector. 

VII. EFFECTS OF THE ISSUANCE OF AN IAR: 

The issuance of an IAR is a mode of initiating administrative proceedings against 

violators of MARPOL 73-78 and PCG rules and regulations on marine environmental protection. 

It shall constitute sufficient notice of an administrative case against the person(s) to whom it 

is issued. For this purpose, a respondent is required to submit evidence for and his behalf 

before the Investigation and Adjudication officer having jurisdiction over the case within ten 

(10) days from receipt thereof. The issuance of IAR is governed by PCG-MC 04-2001. 

VIII. RESPONSIBILITY 

A. Commanders, Marine Environmental Protection Command and Coast Guard District/Station: 

1. In charge of the inspection and apprehension of persons and entities causing marine 

pollution.

1706 


2. Train and designate Inspectors who shall conduct an inspection in accordance with the 

vessel inspection guidelines for tankers. 

3. Coordinate with NOCOP on matters requiring technical assistance. 

B. Commander, National Operation Center for Oil Pollution 

1. Conduct inspection, surveillance and apprehension of persons and entities causing 

marine pollution. 

2. Coordinate with other agencies on matters requiring technical assistance such as 

laboratory experimentation for investigations, research and prosecution of marine pollution 

cases. 

C. Coast Guard Training and Education Command 

1. Conduct Tanker Inspectorís Training in coordination with MEPCOM and the Industry. 

2. Conduct qualification exam for PCG Inspectors. 

D. AC of S for MEP, CG-7 

1. Monitor the implementation of this Circular. 

2. Monitor and record all reported marine pollution violations from Coast Guard units. 

IX. EFFECTIVITY: 

This Memorandum Circular shall take effect fifteen (15) days from the time it is filed 

with the UP Law Center. 


(SGD.) REUBEN S. LISTA 

VADM PCG Commandant 

PCG 

SECURITIES AND EXCHANGE COMMISSION 


SEC Memorandum Circular No. 11, s. 2003 

Supervision Over Registered Corporations 

This is to clarify the extent of the supervisory powers of the Securities and Exchange 

Commission (SEC) over all registered corporations.


Section 5 (a) of the Securities Regulation Code provides that the Commission has 

ìjurisdiction and supervision over all corporations, partnerships or associations which are 

grantees of primary franchises and/or a license or permit issued by the Governmentî. 

The word ìsupervisionî, as used in the aforequoted provision of law, is interpreted to 

mean as follows: 

1. The business operations of corporations which are grantees of secondary licenses or 

franchises by this Commission, such as but not limited to financing companies, investment 

companies, investment houses, pre-need companies, broker/dealers and exchanges, 

shall be under the direct supervision of this Commission, i.e.: 

a. submission of reports (monthly, quarterly, operational, annual, etc.) required in the 

different laws governing the type of activity engaged in by these corporations; and 

b. compliance with provisions of the Corporation Code including those provisions requiring 

submission of documents to effect compliance. 

Additionally, the Commission exercises regulatory authority over said companies. For 

corporations with registered/listed issues, compliance with registration requirements and 

the conditions imposed by the Commission for their registration shall likewise be under its 

direct supervision. 

2. For all other business operations of companies with certificates of registration with the 

SEC as corporations but not requiring a secondary license from the SEC, the extent of its 

supervision and monitoring shall be limited to their compliance with the Corporation Code, 

i.e.: 

a. submission of financial statements; 

b. submission of General Information Sheets (GIS); 

c. compliance with provisions in their by-laws on: 

i. number of directors 

ii. qualifications, compensation of directors 

iii. holding of meetings, etc. 

d. declaration of dividends 

e. inspection of books; and 

f. other provisions of the Code requiring submission of documents to effect compliance. 

3. The business operations of corporations which are grantees of secondary licenses or 

franchises of other government agencies such as but not limited to banking and quasibanking 

institutions, building and loan associations, trust companies and other financial 

intermediaries, insurance companies, public utilities, educational institutions and other 

corporations governed by special laws, shall not be under the direct supervision of this 

Commission, but under the direct supervision of the concerned government agency granting 

such secondary license or franchise. The extent of the Commissionís supervisory powers 

over such corporations shall be limited to those mentioned in Item No. 2 hereof. All complaints 

regarding their operations shall be directed to their primary regulator. 

4. Notwithstanding the foregoing, the Commission, as provided in Section 5 of the SRC and 

the effective provisions of PD 902-A, shall have the power to do any and all acts to carry 

out the effective implementaion of the laws it is mandated to enforce, I.e.: constitute a 

Management Committee; appoint receivers; issue Cease and Desist Orders to prevent

1708 


fraud or injury to the public; and such other measures necessary to carry out its role as a 

regulator. 

For information and guidance. 


(SGD.) LILIA R. BAUTISTA 

Chairperson 

SUGAR REGULATORY ADMINISTRATION 


Sugar Order No. 9, s. 2002-2003 

Advance Swapping of ìAî or U.S. Quota Sugar Produced During 

Crop Year 2002-2003 into ìBî or Domestic Sugar 



U.P. Law Complex, DIliman, Quezon City 



--o0o-- 

SUGAR ORDER NO. 9, s. 2002-2003 

Advance Swapping of ìAî or U.S. Quota Sugar Produced 

During Crop Year 2002-2003 Into ìBî or Domestic Sugar 





--o0o-- 

Circular Letter No. 48, s. 2002-2003 

Physical Sugar Stock and Quedan Inventory 


U.P. Law Complex, DIliman, Quezon City




--o0o-- 

Sugar Order No. 1, s. 2003-2004 

Sugar Policy for Crop Year 2003-2004 





-o0o-- 

Sugar Order No. 2, s. 2002-2003 

Export of ìDî Sugar for CY 2003-2004 





--o0o-- 

Circular Letter No. 3, s. 2003-2004 

The ìB-1î Sugar Allocated to Food Processors/Exporters 

through Philfoodex 





--o0o-- 

SUGAR ORDER NO. 3, s. 2003-2004 

Quedanning and Liquidation of the ìB-1î or Food 

Processorsí/Exportersí Sugar 


U.P. Law Complex, DIliman, Quezon City

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