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The Philippine Ports Authority established a fuel-based adjustment mechanism for harbor pilotage services as a temporary cost recovery measure to address fuel price volatility
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PPA noted that “pilot boat operations are an integral component of harbor pilotage services and are significantly affected by fluctuations in fuel prices”
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The FBA should not form part of the base pilotage rate, should be reflected as a separate billing line item, and should not be subject to any government share, reduction, or similar charge
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The mechanism established under PPA Administrative Order No. 006-2026 takes effect on May 23
The Philippine Ports Authority (PPA) has established a fuel-based adjustment (FBA) mechanism for harbor pilotage services as a temporary cost recovery measure to address fuel price volatility.
The FBA mechanism established under PPA Administrative Order (AO) No. 006-2026, which takes effect on May 23, applies to all harbor pilotage service providers operating within all PPA-administered ports and pilotage districts.
AO No. 006-2026 noted that “pilot boat operations are an integral component of harbor pilotage services and are significantly affected by fluctuations in fuel prices.”
The AO is pursuant to the directive under Department of Transportation (DOTr) Department Order No. 2026-007, and aims to “ensure transparent, uniform, and regulated recovery of fuel-related operational cost fluctuations.” PPA is an attached agency of DOTr.
Under AO No. 006-2026, the FBA refers to the allowable fuel cost-recovery per pilotage movement (e.g. docking, undocking) computed in accordance with the guidelines under the AO.
The FBA should not form part of the base pilotage rate and should be reflected as a separate billing line item.
AO No. 006-2026 noted that the FBA will be treated strictly as a cost-recovery mechanism and should not be subject to any government share, reduction, or similar charge. Government share will apply only to base pilotage rates, it pointed out.
PPA will issue a Weekly Required Adjustment Rate (RAR) every Monday that will serve as the maximum allowable FBA for the applicable week (Monday to Sunday).
The RAR will be based on the Department of Energy’s (DOE) current fuel price (weekly average marine diesel price as published by DOE), computed fuel price differential (difference between the current fuel price and the baseline fuel price), applicable nautical mile operations, and approved fuel consumption rates under AO No. 006-2026.
The RAR should be disseminated through an official PPA memorandum, posting on the official PPA website, and electronic transmission to all PPA port management offices (PMOs), harbor pilots, and stakeholders.
Where the current fuel price is equal to or lower than the baseline fuel price of P49 per liter, no FBA should be imposed.
A corresponding downward adjustment should automatically apply whenever the fuel price differential decreases.
Prior to the implementation of any upward adjustment, harbor pilots should comply with notice requirements, including the posting of notice in conspicuous places within ports and pilotage stations; and publication or posting in the official website or official platform of the PPA.
No upward adjustment should take effect earlier than three calendar days from issuance of the corresponding notice by the PPA.
AO No. 006-2026 prohibits overcharging beyond the allowable FBA, unauthorized adjustments, failure to implement corresponding downward adjustments, misrepresentation or falsification of submitted data, and failure to maintain the required records.
Any violation of AO No. 006-2026 will subject the harbor pilots to suspension or revocation of authority to impose FBA, re-computation and refund of excess collections, administrative sanctions under existing PPA rules and regulations, and referral to the Commission on Audit or other appropriate government agencies.
PPA may also revise parameters or recommend further regulatory measures as necessary.
READ: PPA amends policy on premium fees for pilotage services
AO No. 006-2026 noted though that the FBA mechanism is a temporary regulatory measure and will remain in effect unless withdrawn, modified, or superseded by DOTr or PPA.
Pending full operationalization, PPA may issue interim directives, clarifications, or implementing procedures to ensure smooth implementation of AO No. 006-2026.
Aside from the FBA mechanism, PPA also provided its guidelines on the computation of fuel service adjustment that port operators may impose as a temporary cost-recovery measure due to the increase in fuel prices.— Roumina Pablo
READ: PPA issues revised policy on pilots, pilotage services
