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May 25, 2018

CONTENTS
1. ECOP Opposes Penal Sanctions of Bicam Bill on OSH

The House of Representatives and the Senate have approved the proposed
Occupational Safety and Health Standards Act (OSHS) which would strengthen
compliance with occupational safety and health standards. This would be a
consolidation of House Bill No. 64 and Senate Bill No. 1317 to amend the Labor Code
of the Philippines.

2. Concern over upcoming list of firms engaging in labor-only

contracting mounts

The business community has expressed concern over the presidential order for the
Department of Labor and Employment (DOLE) to provide a list of companies allegedly
engaging in labor-only contracting (LOC) activities.

3. ECOP calls for status quo on Section 2 of EO 51 ‘to prevent further

confusion’

The Employers Confederation of the Philippines (ECOP) said it believes it is “better to

keep the status quo to prevent further confusion” regarding Section 2 of Executive
Order (EO) No. 51, the order relating to contractualization signed by President Rodrigo
Duterte last May 1.

4. Cargo-handling charges at Manila ports up 7% starting June 5

The Philippine Ports Authority (PPA) has approved a 7% adjustment on vessel and
cargo-handling rates at both the Manila South Harbor and Manila International
Container Terminal (MICT). The increase is being implemented in one tranche and
takes effect on June 5.
5. Gov’t to map out national competition policy

The government will map out this year a national competition policy (NCP) that will
provide measures to ensure micro, small, and medium enterprises (MSMEs) will thrive
in a competitive market.

6. More ease of doing business reforms underway

The government will implement more reforms to make doing business in the country
easier, including creating an online reporting system for employees of newly registered
businesses.

7. PH to develop regional inclusive innovation hubs

The country aims to develop regional inclusive innovation hubs/centers in the next three
years in support of the government’s new industrial strategy.

8. PH urged to forge good alliances with IndoPacific countries

advancing technology

The Philippines should establish good alliances with IndoPacific countries which are
utilizing technological advances to achieve inclusive economic growth and promote
infrastructure program, according to a foreign relations expert.

9. Draft customs order on brokers’ registration released

The draft customs administrative order (CAO) providing new rules on the registration
procedure for customs brokers has been released for public review by the Department
of Finance and Bureau of Customs (BOC).

10. CCBI seeks deferment of BOC advance e-manifest submission

order

The Chamber of Customs Brokers, Inc. (CCBI) is asking the Bureau of Customs (BOC)
to hold the adoption of the advance submission of cargo manifest to the new Advanced
Manifest System (AMS) until all implementation issues have been resolved.

11. PH port environment policy to take effect on May 27

The Philippine Ports Authority (PPA) is adopting a policy that ensures port activities
have minimal adverse impact on the environment and that all aspects of port operation
and development are geared towards protecting and preserving the environment.

12. BOC sets June launch for enhanced verification system for goods
declaration
The Bureau of Customs (BOC) will launch and pilot-test in June an enhanced goods
declaration verification system that will allow stakeholders to file entries and verify their
status online.

FULL STORIES
1. ECOP Opposes Penal Sanctions of Bicam Bill on OSH

The Employers Confederation of the Philippines (ECOP) finds the penal provisions in
the proposed Occupational Safety and Health Standards Act (OSHS) worrisome and a
cause of concern.

“The bill fails to take into account the realities of the Philippine labor market which is
characterized by a tight formal sector and a large informal sector that is estimated to
consist of 36.13 million workers in 2016,” it said in a statement.

The formal sector is mostly composed of micro and small establishments, comprising of
907,750 establishments which is 99.13% of the total number of registered
establishments in the Philippines.

These enterprises are generally short on capital and technology and rely mainly on
human skills and resources to produce their goods and services. This means that about
99% of the establishments in the formal sector will most likely not be able to afford the
cost of OSHS compliance.

The House of Representatives and the Senate have approved the proposed OSHS
which would strengthen compliance with occupational safety and health standards.
The bill seeks to prevent fatal accidents, disabling injuries and occupational diseases in
the workplace by providing administrative and criminal penalties for violation or non-
compliance with OSHS.

One of the salient provisions of the said bill is the imposition of an administrative fine of
Php100,000.00 per day for non-correction of OSH standards violation, counted from the
date when the employer or contractor is notified of the violation or the date the
compliance order is duly served on the employer. It also provides for imprisonment of
not less than one year to twelve years, at the discretion of the court, as the case may
be.

ECOP further submits that these sanctions, especially if imposed on MSME employers,
are violative of Sec. 19 of the Bill of Rights of the Constitution which prohibits the
imposition of excessive fines.
The ECOP statement also noted that the sanction on “imprisonment would be
counterproductive and destructive. If imprisoned, the employer not only loses his
business but his employees lose their jobs as well”.

2. Concern over upcoming list of firms engaging in labor-only

contracting mounts

The business community has expressed concern over the presidential order for the
Department of Labor and Employment (DOLE) to provide a list of companies allegedly
engaging in labor-only contracting (LOC) activities.

In a panel discussion on contractualization held May 24, speakers said they were
dismayed with the April 17 memorandum issued by President Rodrigo Duterte ordering
DOLE to inventory companies practicing LOC and to submit the roster to him within 30
days.

“The Department of Labor and Employment Secretary is hereby directed to submit to

the Office of the President within thirty days from issuance hereof a comprehensive
report on the implementation of the DOLE Department Order Nos. 174 and 183 (s.
2017) including violations thereof, and a list of companies engaged and/or suspected to
be engaged in labor-only contracting,” the April 17 memorandum read.

Duterte also ordered the National Labor Relations Commission to submit a list of cases
involving respondents found to be engaged in labor-only contracting or have violated
the DOLE orders.

During the panel discussion, Rhoda Caliwara, national president of the Philippine
Association of Local Service Contractors, said the directive of the President is
“problematic,” since even those who are only still suspects can be included in the list.
She added that this issue merits priority attention and discussion by the business
community on “what to do next.”

Former labor secretary Marianito Roque agreed that the memorandum is “a cause for
worry” for companies and service contractors “because the big employers are taking
this seriously also.”

He explained that big companies are concerned about the impact on their image and
corporate social responsibility efforts to be associated with a party said to have
violations pertaining to labor-only contracting.

“On the two parties who are part of the employer-employee relationship chain there is
cause for worry and there has to be a middle ground that I hope that they can find, and
to meet with the DOLE and find the middle line solution on how they can approach this
list,” said Roque.
On how the list is coming along, “I think they are already midway in cleaning up the list
of those who are respondents to initial LOC findings,” he added.

Another panel reactor, Atty. Benedicto Bitonio, Jr., professor at the U.P. School of Labor
and Industrial Relations, suggested that DOLE can “just publish its decisions on the
website about contractors and all the other decisions so that the public can monitor who
is erring and who is not, rather than come up with a list of suspects because that has
very grave constitutional implications the way it sounds to me.”

Presidential spokesman Harry Roque explained earlier what the April 17

memorandum’s message was to companies: “It’s to tell them comply, otherwise the
President will have you closed down. There will really be a tokhang against
companies... He will run after them one by one. This will be a tokhang against cabo.”

“Tokhang” originally refers to the anti-narcotics campaign of the police wherein law
enforcers visit the houses of drug pushers and users to advise them to stop their illegal
activities.

DOLE’s Department Order No. 174 identifies two arrangements that constitute labor-
only contracting, which is prohibited under the law.

The first is when the contractor does not have substantial capital, or does not have
investments in the form of tools, equipment, machinery, supervision, work premises,
among others; and the contractor's employees are performing activities which are
directly related to the main business of the principal.

The second type of LOC is when the contractor does not exercise the right of control
over the performance of the work of its employees.

3. ECOP calls for status quo on Section 2 of EO 51 ‘to prevent further

confusion’

The Employers Confederation of the Philippines (ECOP) said it believes it is “better to

keep the status quo to prevent further confusion” regarding Section 2 of Executive
Order (EO) No. 51, the order relating to contractualization signed by President Rodrigo
Duterte last May 1.

ECOP president Donald Dee in a recent statement said that pending the convening of
the National Tripartite Industrial Peace Council (NTIPC) following the issuance of EO
51, ECOP has already espoused its policy position on Section 2, particularly the last
paragraph, during the recent Tripartite Executive Committee (TEC) meeting.

The last paragraph of this provision states that “the Secretary of Labor and Employment
may, by appropriate issuances, in consultation with the NTIPC under Article 290 (c) of
the Labor Code, as amended, declare activities which may be contracted out.”
The Department of Labor and Employment (DOLE) through the Bureau of Labor
Relations (BLR) conducted a TEC meeting last May 10 to discuss the “ways forward”
relative to EO 51 signed by Duterte on Labor day.

DOLE BLR Director IV Benjo M. Benavides, who presided over the meeting, asked the
members of the TEC if there was a need to have a list of contracted-out activities, if
such activities should be in a form of a positive or negative list, and what exactly
comprises these activities.

While labor groups are pushing to convene the NTIPC to tackle job contractualization
under Section 2 of EO 51, ECOP commented that it is better to keep the status quo to
prevent further confusion. “This means that activities which may be contracted out do
not have to be on a negative or positive list, nor should there be a specific list of
activities which may be contracted out,” ECOP said.

It noted that other members of the TEC agreed and added that as it is, the current set-
up that allows legitimate forms of contracting out and expressly prohibits the practice of
labor-only contracting already causes enough confusion in practice.

For ECOP, Dee stressed, “We deem it at this point not to disturb Section 2 by coming
up with a list of activities that may be contracted out. At the moment, let’s leave it at
that.”

4. Cargo-handling charges at Manila ports up 7% starting June 5

The Philippine Ports Authority (PPA) has approved a 7% adjustment on vessel and
cargo-handling rates at both the Manila South Harbor and Manila International
Container Terminal (MICT). The increase is being implemented in one tranche and
takes effect on June 5.

In PPA Memorandum Circular (MC) No. 07-2018 dated May 4, PPA general manager
Atty. Jay Daniel Santiago said the approval is pursuant to PPA Board Resolution No.
2709, which approved the 7% increase on vessel and cargo-handling tariff covering
international containerized and non-containerized cargoes handled at the two Manila
ports.

The approved rate is lower than the 8.7% hike requested by Asian Terminals Inc. (ATI)
and International Container Terminal Services, Inc. (ICTSI). ATI operates the Manila
South Harbor and ICTSI, the Manila International Container Terminal (MICT).

ATI and ICTSI have filed petitions with PPA early this year for an 8.7% rate increase.
Under their contracts with PPA, both terminal operators may file for a rate hike every
two years. The last cargo-handling tariff rate adjustment was in 2015, when PPA
granted an 8% rate increase.
Their petitions are in keeping with PPA Administrative Order (AO) No. 02-2018, which
prescribes a new standard and uniform formula and procedures for cargo- handling tariff
adjustment.

Under AO 02-2018, which took effect last March 8, the cargo-handling/terminal operator
may apply for a cargo-handling tariff adjustment if the consumer price index (CPI) has
increased by at least 5% within a three-year period.

CPI, computed and provided by the Philippine Statistics Authority (PSA), is a statistical
measure of the average retail pricing of goods and services commonly purchased by a
particular group of people in a particular area.

PPA said AO 02-2018 was issued to ensure integrity and accuracy in the application of
adjustment of cargo-handling tariff, as well as transparency and comprehensive
deliberation during the conduct of public hearings.

MICT management services and government affairs director Voltaire Wycoco, in a

presentation during the public hearing for the rate adjustment last March, said CPI (all
items) in the Philippines increased 7.54% from P140.50 in December 2014 to P151.10
in December 2017.

CPI (all items) for National Capital Region likewise rose 8.72% from P130.70 in
December 2014 to P142.10 in December 2017, he said.

Both terminal operators said they are eligible for tariff adjustment after having complied
with the requirements of AO 02-2018. -- www.portcalls.com

5. Gov’t to map out national competition policy

The government will map out this year a national competition policy (NCP) that will
provide measures to ensure micro, small, and medium enterprises (MSMEs) will thrive
in a competitive market.

The Socioeconomic Report recently released by the National Economic and

Development Authority (NEDA) said the competition law does not exempt MSMEs from
penalties due to anti-competitive behaviors.

The NCP aims to provide a holistic and comprehensive framework for competition, and
to complement the Philippine Competition Act.

“This is to ensure that the government and the private sector are working closely to
boost market competition by addressing issues on competitive neutrality, anti-
competitive behaviors, and unnecessary regulatory burdens,” the report said, noting the
NCP’s implementation plan/strategy will also be crafted.
It said an executive order will be issued within the year providing for the consolidation of
state guarantee firms, such as the Agricultural Guarantee Fund Pool, Industrial
Guarantee and Loan Fund, Home Guaranty Corporation, and Small Business
Corporation into Philippine Export-Import Credit Agency (PhilExim).

“The PhilExim shall extend guarantee, insurance, credit, and technical assistance to
viable enterprises to help them compete in the market,” it said. “Stakeholder
consultations will be conducted, particularly in the formulation of institutional
arrangements, to ensure that the appropriate competition agencies are involved.”•

In order for competition initiatives to progress, the government also aims to reduce
unnecessary regulatory burdens to foster competition, address barriers to entry of firms
in the market, and promote competitive neutrality concerning government-owned and/or
controlled corporations (GOCCs).

It will also increase awareness of the competition law to foster a culture of strong market
competition, strengthen the capacity of the Executive and Judicial departments to
enforce the competition law, and implement more collaborative undertakings among
competition agencies.

The report noted that while Project Repeal has created awareness in ensuring
regulatory quality and started simplifying and streamlining initiatives, it merely delisted,
amended, repealed, and consolidated existing regulations.

“This model needs refinement to take into account compliance cost, administrative
costs, and costs of limited competition,” it said. “In addition, Congress has started the
review of primary laws or legislations and a similar approach should be applied.”•

6. More ease of doing business reforms underway

The government will implement more reforms to make doing business in the country
easier, including creating an online reporting system for employees of newly registered
businesses.

Competitiveness and Ease of Doing Business Group (CEODBG) Undersecretary Rowel

Barba said the Unified Employee Enrolment Portal will be established by the Social
Security System, the Home Development Mutual Fund, and the Philippine Health
Insurance Corporation.

“This will reduce the procedures and processing time for enrolment of new employees in
the criterion on Starting a Business,” he said.

Barba said signing into law of the Ease of Doing Business and Efficient Government
Service Delivery Act of 2018 can also further promote ease of doing business.
He added other reforms underway are the amendments to the Corporation Code, which
will affect two indicators – starting a business and protection minority investors;; and the
Secured Transactions Bill, which will strengthen the legal rights index under the criterion
on Getting Credit.

Moreover, Barba said implementation of the Transfer Assistance Program by the

Quezon City government will streamline the procedures for securing the tax declaration,
tax clearance, and paying the transfer tax.

“All of which will reduce the processing time for registering property,” he added.

7. PH to develop regional inclusive innovation hubs

The country aims to develop regional inclusive innovation hubs/centers in the next three
years in support of the government’s new industrial strategy.

Trade Assistant Secretary Rafaelita Aldaba said regional and local inclusive innovation
hubs are cornerstone of the department’s Inclusive Innovation Industrial Strategy, or
i3S.

The i3S aims to grow and develop globally competitive and innovative industries with
innovation at the front and center of industrial policies and programs supported by
pillars consisting of building new industries, clusters and agglomeration.

These will ensure micro, small, and medium enterprise (MSME) growth and
development, human resource development, and improving ease of doing business and
the business environment.

Aldaba said the innovation hubs intend to bridge gap between industries and academe.

These will also create regional ecosystem made up of universities, research and
development (R&D) laboratories, science and technology (S&T) parks, incubators,
fabrication laboratories, co-working spaces, investors and local government units
(LGUs), start-ups, small and medium enterprises (SMEs) and large enterprises.

“Innovation focus on electronics, auto, aerospace, chemicals, IT-BPM (information

technology-business process management), agribusiness,” she said.

Aldaba said pilot areas are CALABARZON (Cavite, Laguna, Batangas, Rizal and
Quezon), Cebu, Bicol, and Cagayan de Oro.

“Innovation (is) key enabler for the future, important ingredient for long-run growth, at
the heart of the PH Industrial Strategy i3S,” she added.
Apart from innovation hubs/centers, the trade official said R&D centers will be
developed across the country next year until 2022.

8. PH urged to forge good alliances with IndoPacific countries

advancing technology

The Philippines should establish good alliances with IndoPacific countries which are
utilizing technological advances to achieve inclusive economic growth and promote
infrastructure program, according to a foreign relations expert.

In a forum, Philippine Council for Foreign Relations (PCFR) president Dr. Alan Ortiz
highlighted the country’s “mission” of forging partnerships with these countries which
are advancing the Fourth Industrial Revolution.

Ortiz noted the rapid growth of technological breakthroughs in various fields, such as
new developments in artificial intelligence, quantum computing, biotechnology,
nanotechnology, 3D printing, and the production of autonomous vehicles.

He promoted the Philippines' potential to become a highly developed economy by

engagements into these fields.

By investing in these programs, Ortiz said the Philippines will have a fruitful future
ahead for the years to come.

He stressed the Philippines' need to direct its track to the rapid development of the
Fourth Industrial Revolution for the economy to progress and eliminate poverty.

Ortiz said the initiatives of foreign policy must help in building and sustaining the
fundamental social infrastructure elements, which include technology as well as human,
physical, and governance.

Promoting bilateral and multilateral relations, as well as upholding its stance by not
compromising on diplomatic issues, are key elements that should be pursued by the
government, he added.

For his part, Ambassador Jose Maria Cariño, Chairperson-Alternate of the Technical
Cooperation Council of the Philippines of the Department of Foreign Affairs, said it is
important that the Fourth Industrial Revolution must be promoted in the Philippines as a
stepping stone for fast tracking the economic progress and development with the
primary aim of reducing poverty.

9. Draft customs order on brokers’ registration released

The draft customs administrative order (CAO) providing new rules on the registration
procedure for customs brokers has been released for public review by the Department
of Finance and Bureau of Customs (BOC).

Stakeholders have until May 24 to submit their position papers, the same day as the
public hearing on the proposed order.

The draft CAO will implement Sections 1200 and 1226 and other relevant provisions of
Republic Act No. 10863 or the Customs Modernization and Tariff Act (CMTA).

The draft order covers the registration of customs brokers and their authorized
representatives transacting with BOC.
Under the proposed order, brokers who will lodge and process goods declaration,
representing importers or exporters, at BOC need to register and obtain a Certificate of
Registration from the BOC.

Registration is not required when the customs broker is engaged in the practice of the
profession other than lodgement, signing, and processing of goods declaration, and
representing importers or exporters.

Neither is it required if a customs broker is a trader or importer dealing in customs and

tariff transactions at BOC solely for his/her own account and not in behalf of another,
provided that the customs broker must be accredited as an importer.

Lastly, registration is not required for a customs broker who is also an employee of a
customs broker and acting solely for his/her employer, subject to two conditions: that
the customs broker’s name appears on the certified list of customs broker-employer’s
representatives or any addition to the list submitted by the customs broker-employer;
and that the customs broker is a holder of a valid Customs Pass issued by BOC’s
Enforcement Security Service.

BOC’s Account Management Office (AMO), or its equivalent office, will be responsible
for the registration of customs brokers.

To register, customs brokers must accomplish the application form under oath and file a
copy with AMO after paying the P1,000 registration fee, attaching the BOC official
receipt.

The application should be accompanied with verified photocopies of supporting

documents, which are the Valid Professional Identification Card; Client Profile
Registration System; Bureau of Internal Revenue registration (Form No. 2303); Good
Standing Certificate issued by the accredited professional organization; duly
accomplished form (a certified list of regular clients, or Affidavit of No Client for new
customs brokers); and a certified list of the customs broker’s representatives with their
specimen signatures to be accomplished in the prescribed form, or Affidavit of No
Customs Broker Representative.
The draft order notes that the customs broker’s representative must be a full-time
regular employee of the customs broker authorized to act on his/her behalf in following
up the processing of entries, permits, and other customs documents related to the
customs broker’s practice of profession, and must possess the qualifications as required
by the Customs commissioner through a corresponding customs memorandum order.

The Customs commissioner may limit the number of customs broker’s representatives
commensurate to the number of transactions of every customs broker in each port. The
access pass issued to the customs broker’s representative must be surrendered by the
customs broker-employer to BOC if the registration of the latter in the bureau is
revoked, is cancelled, or has expired.

The approval or disapproval of the application may be delegated by the Customs

commissioner to the head of AMO; in either case, the application for registration shall
be approved or disapproved within five working days from the date the complete
documents were received.

If an application is disapproved, a signed notice of disapproval clearly stating the

grounds shall be served to the applicant, copy furnished the APO. The applicant
customs broker may re-file his/her application any time.

The customs commissioner may create AMO satellite offices at any strategic areas or
ports outside Metro Manila. If there are no AMO satellite offices yet, for applicants
outside Metro Manila, the application together with supporting documents may be filed
with the Customs Intelligence and Investigation Service (CIIS) of the customs district
where the customs broker regularly transacts business.

For an approved application, a Certificate of Registration is valid for three years from
the year of issuance unless suspended or revoked for cause. This is provided that every
year in between the three-year period the customs broker must update his/her profile
and submit an Affidavit of Change of Circumstances if there are any material changes
on the original application form, or an Affidavit of No Change if there are no changes.
BOC, through a CMO, may also allow a one-time registration privilege to a registered
customs broker with a high-level of customs compliance record under the Authorized
Economic Operator and other trade facilitation programs.

The Certificate of Registration must be renewed one month before it expires. No

renewal of application will be accepted if the Certificate of Registration has been
revoked for cause during the valid period, unless lifted by the Customs commissioner.
If the customs broker fails to renew his/her accreditation, the accreditation is considered
expired or delisted; the customs broker will thus not be allowed to lodge or file a goods
declaration with BOC.

One month after the previous registration expires, the customs broker may apply for a
new registration.
The registered customs broker’s duties and responsibilities, under the CAO, include
lodgment of goods declaration, record-keeping, and mandatory maintenance, and
updating of electronic mail addresses and contact numbers.

Grounds for revocation of registration include deliberate failure or unjustified refusal to

comply with the duties and responsibilities prescribed under the CAO; and violation of
customs laws and regulations.

Violators will be fined P100,000 on first offense, P200,000 on second offense, P300,000
on third offense, and P300,000 plus perpetual disqualification from transacting with
BOC on fourth offense. -- www.portcalls.com

10. CCBI seeks deferment of BOC advance e-manifest submission

order

The Chamber of Customs Brokers, Inc. (CCBI) is asking the Bureau of Customs (BOC)
to hold the adoption of the advance submission of cargo manifest to the new Advanced
Manifest System (AMS) until all implementation issues have been resolved.

In a letter to Customs commissioner Isidro Lapeña dated May 18 and received on May
21, CCBI president Atty Ferdinand Nague said the chamber lauds BOC’s efforts to fast
track and modernize its procedures but that it believes Customs Memorandum Order
(CMO) No. 06-2018 should be deferred.

CMO 06-2018, which prescribes guidelines that, among others, mandates

transmission—electronically and in portable document format (pdf)—of advance
manifest and other documents (copies of bills of lading, commercial invoice and packing
list) from foreign carriers, shippers, consignees and their authorized agents, took effect
on May 7.

CCBI took particular exception to the order’s Section 4.10, which states: “The carrier or
its authorized agent shall obtain from the shipper the Commercial Invoice and Packing
List for submission in searchable PDF to the Bureau’s Advance Manifest System at
least twenty-four (24) hours prior to the arrival of the vessel or aircraft. The consignee
shall be held liable for non-compliance of the shipper and may be subject to the
payment of imposable fines in accordance with existing customs laws and regulations
without prejudice to whatever legal recourse the BOC may pursue against eh delinquent
consignee.”

Nague said chamber members are “confused” as to why consignees should be

penalized for the shipper’s noncompliance.
“The shipper and the consignee do not have a principal-agent relationship so as to bind
one party to the misdeed or failure of the other. It would be highly unfair to penalize the
consignee over a matter it has no full control of,” Nague explained.

“Moreover, since this CMO provides for a penalty provision for non-compliance, the
same should have the approval of the Secretary of Finance and with prior public
consultation,” he added.

In addition, CCBI is asking for the deferment as the advance submission of manifest
and other documents “might affect trade facilitation due to huge volume of files that will
be required to pass through the infrastructure that will process the Advance Manifest
System.”

As of the morning of May 22, Nague said BOC has yet to respond to CCBI’s letter.

AMS is not e2m

CMO 06-2018 is pursuant to Customs Administrative Order (CAO) No. 01-2016, which
requires the advance submission of cargo information to provide the BOC more time to
assess incoming cargoes.

AMS allows qualified importers or their authorized representatives to process in

advance the goods declaration before the shipment arrives and to determine the pre-
assessed customs duties, taxes, other charges, and other documentary requirements.
It must be noted that AMS is an entirely separate system from BOC’s electronic-to-
mobile (e2m) system, which also requires electronic submission of the cargo manifest.

The new order does not follow the timelines for submission under CAO 01-2016, but
instead adopts prescribed timelines under Republic Act No. 10863, or the Customs
Modernization and Tariff Act (CMTA).

The AMS also does not require inputting of goods description, which is a requirement in
e2m. Under AMS, the advance cargo manifest (of shipping lines and airlines) or
consolidated cargo manifest (CCM of freight forwarders and consolidators) should be
saved in a pdf file; shippers can attach as many pdfs as necessary.

Use of the AMS requires additional payment to the BOC-accredited value-added service
providers.

Cargo information provided to AMS will be used in BOC’s risk management, anti-
terrorism, law enforcement, and other related activities, CMO 06-2018 said.

For sea freight, a true and complete copy of the cargo manifest and CCM shall be
electronically sent in advance by the shipping company, non-vessel operating common
carrier, freight forwarder, cargo consolidator, or their authorized representatives within
the cut-off period prior to the arrival of the carrying vessel at the port of entry.
If the transit time from port of origin to port of entry is at least 72 hours, the cargo
manifest and CCM must be submitted electronically to BOC 24 hours before the
carrying vessel arrives at the port of entry. If the transit time from port of origin to port of
entry is less than 72 hours, the cargo manifest and CCM must be submitted
12 hours before the carrying vessel reaches the port of entry.

For air freight, the cargo manifest and CCM shall be electronically submitted in advance
by the airline, air express operator, air freight forwarder, and de-consolidator also within
the cut-off period before the aircraft arrives at the port of entry.

If the port of loading is in Asia, the electronic cargo manifest and CCM must be
submitted one hour before the aircraft arrives. If the port of loading is other than Asia,
the submission must be four hours before the aircraft lands.

Submission of the PDF cargo manifest and CCM by the freight forwarder, consolidator,
or shipping line’s coleader can be done even prior to the submission by the vessel
operator.

Penalties
Under Section 1412, failure to transmit the electronic manifest within the time prescribed
by BOC prior to the arrival of the carrying vessel or aircraft at the port of entry shall
make the owner, operator, or agent of the vessel or aircraft liable for a fine of not less
than P100,000 but not more than P300,000.

Section 1412 adds that if the transit time from the port of origin is at least 72 hours, the
shipping or forwarding agent of the carrier or the vessel who fails to submit the manifest
at least 24 hours before entry shall also be liable for the same rates.

Late submission of cargo manifest and CCM shall only be excused and not subjected to
penalty in cases of force majeure or other unforeseen circumstances beyond the control
of the carrier or his agent; technical problems at BOC; and other similar circumstances.

In any of the allowed circumstances, the cargo manifest/CCM may be submitted within
24 hours of the cessation of the incident.

The shipping company, NVOCC, freight forwarder, cargo consolidator, or their

authorized agents shall likewise submit an electronic copy of the master B/L and house
B/L/HAWB, as the case may be, in searchable PDF through the VASP/IAP to the AMS
at least 24 hours before the vessel or aircraft arrives.

CMO 06-2018 also provides the procedures for submitting the stowage plan and
containers discharging list, with timelines the same as for sea freight. For the load port
survey, the accredited cargo surveying company shall submit the searchable PDF of the
report in the AMS at least 24 hours before arrival of the vessel. Currently, LPS is only
required for bulk and breakbulk shipments.
Cargoes/containers that are not listed in the IFM but are otherwise recorded in the
stowage plan shall be covered by a supplemental manifest, to be submitted not later
than 48 hours from date of discharge of the last package from the vessel. A supplement
manifest for cargoes/containers not listed in the IFM and stowage plan can be sent not
later than 24 hours from date of discharge of the last package from the vessel.

For air, the supplemental manifest shall be submitted no later than 24 hours from date
of discharge of the last package from the aircraft. -- www.portcalls.com

11. PH port environment policy to take effect on May 27

The Philippine Ports Authority (PPA) is adopting a policy that ensures port activities
have minimal adverse impact on the environment and that all aspects of port operation
and development are geared towards protecting and preserving the environment.

The Port Environment Policy (PEP), embodied in PPA Administrative Order (AO) No.
05-2018, is PPA’s instrument in institutionalizing environmental preservation and
protection, and its means “to mainstream sound practices in all aspects of port
management, port operation, port engineering, and development.” The policy will take
effect on May 27.

The policy is based on the principles of environmental sustainability; compliance with

environmental protection measures and standards; support for alternative sources of
energy; implementation of energy efficient measures; and continuous education and
capacity building for workers and stakeholders.

PEP adopts relevant national and international instruments to protect and preserve the
environment. It is also in compliance with international obligations and requirements
under the United Nations, International Maritime Organization, Asia Pacific Economic
Cooperation, International Association of Ports and Harbor Facilities, and Permanent
International Cooperation of Navigational Congresses.

The policy will apply to all aspects of PPA port administration, management, operation,
and development.

Under AO 05-2018, PPA’s Board of Directors will be responsible for approving PEP,
with the general manager, to be assisted by assistant general managers, implementing
PEP rules and regulations.

Head office managers and port management office managers are responsible for
ensuring that PEP rules and programs are implemented and completed, while rank and
file employees are tasked to fully cooperate.

Port service providers—including port terminal operators, cargo-handling operators,

harbor pilots, shore reception facility operators, and port ancillary services providers—
have the responsibility to cooperate and comply with PPA port rules and regulations,
and projects and programs consistent with PEP.

Port users, meanwhile, must abide by PPA rules, regulations, projects, and programs
consistent with PEP, while the port community should fully cooperate and participate to
ensure that PEP programs are successful.

PEP is being implemented as part of PPA’s “The Green, Resilient and Smart Port
Strategy” (GRaSPS).

Guiding framework for PEP

GRaSPS’ framework shall be PPA’s guiding mechanism to attain consistency with its
environmental policy and achieve its objectives under PEP.

All activities under the GRaSPS framework shall be grouped under two main criteria:
hard infrastructure and soft infrastructure.

Hard infrastructure includes fixed assets, physical port developments or improvements,

and control systems required to operate, manage, administer, and monitor the
operations of the port; as well as accessory buildings, plants or vehicles, and
information technology infrastructure.

Soft infrastructure, meanwhile, involves human resources and institutions such as port
rules and regulations, systems and procedures, business processes, and human
resource development programs.

In order to institutionalize GRaSPS in all government ports, the corresponding

implementing guidelines shall be formulated and approved by the PPA general
manager, to be implemented by concerned PPA units or officials and personnel.

Guided by the GRaSPS implementing guidelines, all units of PPA shall define their
action plans (short, medium, and long term) and identify and associate the
corresponding output that is consistent with the PEP policy to be approved by the unit
head. In order to achieve the GRaSPS action plans, annual projects and programs shall
be proposed for inclusion in the annual plans, programs, and budget, subject to the
approval of the general manager.

Fines and penalties for violations against the PEP shall be prescribed in a separate
PPA issuance. -- www.portcalls.com

12. BOC sets June launch for enhanced verification system for goods
declaration
The Bureau of Customs (BOC) will launch and pilot-test in June an enhanced goods
declaration verification system that will allow stakeholders to file entries and verify their
status online.

BOC’s Management Information System and Technology Group (MISTG) deputy

commissioner Noel Prudente, in a forum with importers and customs brokers on May
10, said EGDVS is phase two of GDVS, which assigns entries randomly to available
appraisers and examiners, and allows customs brokers and importers to verify the
status of their entries.

GDVS was pilot-tested and implemented at the Manila International Container Terminal
and Port of Manila in October 2017 and was formalized under Customs Memorandum
Order (CMO) 31-2017 issued in December 2017. Through kiosks at the two ports,
customs brokers or their representatives are able to check the status of their shipments
without needing to ask customs personnel.

EGDVS, meanwhile, will allow stakeholders to check the status of their entries online
and not just at kiosks in ports. Another new feature allows importers and customs
brokers to upload scanned copies of their entries online. EGDVS is separate from
BOC’s electronic-to-mobile (e2m) system. Stakeholders will still need to lodge their
entries to the e2m and then upload the scanned copies of entries to the EGDVS and
submit hard copies to the Formal Entry Division (FED).

MISTG’s Basilisa Absalon during the forum explained that uploading the scanned
copies of entries to EGDVS will become mandatory, as these soft copies will be used by
appraisers and examiners to countercheck against lodgment in e2m and the hard
copies submitted to FED. The entry will not be processed unless copies are submitted
to e2m, FED, and EGDVS.

Absalon said BOC is amending CMO 31-2017, and will issue a new one before the
June 2018 implementation of EGDVS and will provide a user’s manual as well. She
noted, however, that the June implementation is only a pilot test covering a few ports.

Under EGDVS, entries are assigned to available examiners and appraisers on a first-in,
first-out basis. It covers only import consumption entries. Prudente said EGDVS
eradicates the “sukisystem” and face-to-face transaction between stakeholders and
customs appraisers and examiners, in line with Customs commissioner Isidro Lapeña’s
objective to stop corruption.

He added that the system levels the playing field for stakeholders, as they will not have
to worry about their entries not being assessed by appraisers, or not being prioritized
despite being filed ahead of the others. Prudente noted that under EGDVS, appraisers
and examiners are given a timeline to finish an assessment. If an entry takes too long, it
will be transferred to another available appraiser. Appraisers and examiners also cannot
take another entry unless they finish a pending entry first.
With EGDVS, BOC will be able to monitor how its appraisers and examiners perform,
and how long it takes them to assess an entry. If there are concerns, appraisers and
examiners must provide remarks on the pending entry so issues will be resolved. --
www.portcalls.com