PHILIPPINE PORTS AUTHORITY
PMO SURIGAO
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR 2013
AGENCY BACKGROUND
The Port Management Office of Surigao officially came to exist on August 1,
1977 when the Philippine Ports Authority established its port management
unit in Surigao City and took over the port operations, maintenance and
related functions from the Bureau of Customs and from the then Bureau of
Public Works.
Its’ baseport, the Port of Surigao, has a long and colorful history that dates
back to the arrival of Ferdinand Magellan in 1521. From the Island of
Homonhon, sailing through the strait of Surigao along the coast of Dinagat
Island; Magellan’s fleet dropped anchor at Surigao for watering before
proceeding to Cebu where he was killed at Mactan.
Development of the Port of Surigao under the Fourth IBRD package was
bidded on March 12, 1987 and awarded to F.T. Sanchez Construction on April
8, 1987. The contract took effect on September 28, 1987. The project was
formally inaugurated on July 9, 1990 thus modernizing the port enhancing its
role as a gateway to Mindanao.
The PMO has jurisdiction over various ports in the provinces of Surigao Del
Norte (including Siargao and Bucas Grande Islands), Surigao del Sur and the
Province of Dinagat Islands. Passengers and cargoes from Southern Leyte
and even Agusan Del Sur and Norte are handled at Surigao thereby making it
the premier port in the Caraga region.
Under PMO Surigao’s supervision are the three Terminal Management
Offices namely Lipata in Surigao del Norte; Dapa in Siargao Islands which
also supervises ports in the Province of Dinagat Islands; and Tandag in
Surigao del Sur.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of the Financial Statements
The accompanying financial statements are presented and prepared in
Philippine Pesos under the historical convention.
Statement of Compliance
The accompanying financial statements have been prepared in conformity
with Philippine Government Accounting Standards (PGAS) promulgated and
issued by the commission on Audit per Resolution No. 2006-06.
Cash
Cash are carried in the balance sheet at cost. For the purpose of the Balance
sheet presentation, cash consist of Cash on Hand and Cash in Bank, under
cash on hand are Cash-collecting Officers, Cash- Disbursing Officers and
Petty Cash Fund. Philippine National Bank is the Depository bank both for
current and savings account of the PMO.
Receivables
Accounts Receivables are recognized and carried at original invoice amount
less an allowance for doubtful accounts. An estimate for doubtful accounts is
being set up base on the following estimates:
Age (days) of Account
1-30
Days
31-90
Days
91-180
Days
181-365
Days
Over 365
Days
Dormant with Nil Chance
Rate of Allowance
5%
10%
20%
40%
60%
100%
Prepayments
This account includes the following:
Advances to Contractors not exceeding 15% of the total contract price are
granted pursuant to Republic Act 9184. The advances, which are repaid thru
deductions from progress payments to Contractors, are secured with
irrevocable letters of credit of equivalent values from commercial banks, bank
guarantees or surety bond.
Prepaid Taxes consist of the amounts of expanded or creditable withholding
taxes deducted by port users from wharfage, vessel charges, rental of real
property and other port facilities. Section 76 of the National Internal Revenue
Code allows cash refund of the amount withheld or the use of covering tax
credit certificates against future tax.
Other Prepayments The account includes advance payment made to
suppliers for the use/rental of facility.
Other Current Assets
This account includes the following:
Input-Value Added Tax pertains to the carried over balance of VAT paid by
the Authority for acquired goods and services that may be applied as tax
credit or deducted from the remittance of Output VAT.
Deposit on Containers consist of the
contractors/suppliers for the use/rental of facility.
amount
deposited
to
6.Property and Equipment
Property and equipment are carried at cost less accumulated depreciation
and impairment in value.
Initially, Property and Equipment is measured at its cost, which comprises its
purchase price and any direct attributable costs of bringing the asset to
working condition.
Depreciation is computed based on the carrying values of the assets using
the straight-line method with 10% salvage value and based on estimated
useful lives provided by Head Office.
Accounts Payable
Trade/Business Payables are obligations incurred in the procurement of
goods and services from private suppliers and entities arising from the
conduct of business operations.
Due to Officers and Employees consist of liabilities set-up for the payment
of services rendered by employees i.e, salaries, overtime bonuses, incentives,
allowances, reimbursement of official expenses, and other claims due to PPA
personnel.
Payables to Other Government Agencies
Inter-Agency Payables This account is comprised of payables involving the
mandatory deductions withheld from salaries of personnel that are due for
remittance in payment of taxes, employees’ insurance premium contributions
and loan amortizations. Also include are liabilities for advances made by other
government agencies for specific purpose.
Intra-Agency Payables consist substantially of deductions on salaries of
personnel for Pantalan Union Dues and Employees Cooperative.
Depository Liabilities are deposits other than those required to guaranty the
performance of contracts.
Deferred Credits
This accounts includes the amount of income received before it is earned or
realized such as Output Vat on income earned that is due for remittance to
the Bureau of Internal Revenue and amounts received in advanced for Cargo
or Vessel Charges.
Equity
This account includes cumulative net profit, inter-office transactions and
appraisal surplus.
Wharfage Dues
This refers to the charges levied on loaded/unloaded cargoes whether
imports, exports, inbound, outbound, or transhipments. The computation is
based on metric ton for non-containerized cargoes per box for containerized
cargoes.
Share in Arrastre/Stevedoring Income
This account represents the government share on the receipts or earnings of
cargo handlers from arrastre and stevedoring service. Arrastre refers to the
set of shore-based cargo handling activities that includes, but is not limited to
the receiving or loading of cargoes to/from ship’s tackle with the use of dock
gang and cargo handling equipment. On the other hand, stevedoring services
covers the discharging and loading of containers, loaded or empty, from the
vessel to the dock/apron and vice-versa, and the opening and closing of hatch
covers, lids and supporting beams.
Dockage Fees
Dockage or berthing fee is the amount assessed against a vessel engaged in
international (foreign) trade for berthing. It is levied on government- owned, for
loading and discharging cargoes, embarking passengers, bunkering or taking
provisions or repair and changing members of the crew are charged with port
dues based on the vessel cargo gross revenue tonnage (GRT). It is a onetime charge assessed against vessels anytime that they call at the port.
Storage charges
Storage fees are charges on the cargoes that remain in the cargo sheds,
warehouses or in the open storage area of any government- owned port
beyond of the “free storage period” allowed. Increase or decrease in the
storage revenue can be attributed to the growth or decline in the number of
shippers/ port users availing of storage services.
Port Usage Fees
Vessels engaged in coastal domestic trade that berth or temporarily lay up or
drop anchor at any government port are charged a port usage fee based on
gross revenue ton (GRT).
Terminal Fees
The account consists of the amount charge on vehicles for the use of the port
facilities and services which is collected by the PPA on a per sea- leg journey
at the port of loading or embarkation.
Pilotage
This represents the government share on the service rendered or required to
be performed by the harbour pilots to maneuver vessels to/ from the ports as
required or as deemed necessary in each pilotage district.
Salaries and Wages – Regular
Basic pay of regular, casual and contractual government employees for
services rendered.
Other Bonuses and Allowances
Bonuses and allowance other than the 13th month pay and cash gift granted
to officials and employees as authorized by board in accordance with
appropriate legal basis.
Office Supplies and Materials
Cost of expendable commodities acquired in connection with PPA operation.
It also includes, but is not restricted to items (1) normally consumed within
one year after being put into use, or (2) converted in the process of
manufacture or construction, having a life expectancy of more than one year
but which shall have decreased substantially in value after being put into use
in only one year.
Traveling Expenses
Actual and necessary expenses incurred by any official or employees while on
official travel and away/absent from official permanent station whether by
land, sea or air including transportation, subsistence, lodging, per diems
transportation of personnel baggage and other similar expenditures.
Utility Expenses
Cost of water and electricity or gas for illumination, consumed in government
facilities such as in office buildings and grounds, port structure etc in
connection with government operations and projects.
Repairs and Maintenance
It consolidates cost of repairing and maintaining port facilities such as public
buildings, roads, bridges, irrigation systems, river control and sea protection
works, artesian wells, water supply systems, telegraph lines, radio stations,
wharves and other public structures.
Other Professional Services
Cost of other professional services contracted by PPA not classified under
specific professional services accounts.