Raur;blic of f! siahll4anlnas

(MINISTRY OF FINANCE s Office of Itie Minister Manila

MINISTRY ORDER NO.

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RULES AND REGULATIONS TO IMPLEMENT PRESIDENTIAL DECREE NO. 1956, BOARD OF ENERGY ORDER DATED OCTOBER 19, 1984 AND LETTER OF INSTRUCTIONS NO. 1431 AUTHORIZING THE UTILIZATION OF THE OIL PRICE STABILIZATION FUND (OPSF) TO REIMBURSE OIL COMPANIES THEJ1_DDIT_IONAtCOSTS OF CRUDE OIL AND IMPORTED PETROLEUM PRODUCTS DUE TO FLUCTUATION IN FOREIGN EXCHANGE RATES. To implement the provisions of Section 8 of Presidential Decree No. 1956, Board of Energy Order dated October 19, 1984 and Letter of. Instructions No. 1431, the following rules and regulations are hereby

issued: SECTION 1. The OPSF shall be utilized to reimburse the oil companies the excess of the actual peso cost paid for any particular shipment over the peso cost computed on the basis of the assumed foreign exchange rate for the period when the shipment was loaded and which rate was used by the Board of Energy in setting domestic oil product prices (hereafter referred to as "foreign exchange reference rate"). The amount of peso cost shall be computed on landed basis including CIF, duty (or equalization tax), BOE fee, documentary stamp, and foreign exchange transactions tax. Conversely, the oil companies shall pay in to the OPSF the resulting peso cost differential if the actual peso cost is less than the peso cost computed using the foreign exchange reference rate. The reimbursement (or payment) shall be computed as shown in Annex 1. SECTION 2. All crude and imported finished petroleum fuels loaded since October 20, 1984 without forward foreign exchange cover shall be covered by this scheme. SECTION 3. The original importer of crude oil and/or petroleum product is the authorized claimant of reimbursements as well as the one responsible for payments under this scheme. In the case of a resale or transfer of ownership of such import, the buyer may be allowed to make the claim subject Lo the approval of the Ministry of Energy. SECTION 4. Applications for reimbursement from (as well as payments to) the OPSF shall be on a per shipment basis. This shall be submitted to: Ministry of Energy Merritt Road, Fort Bonifacio Makati, Metro Manila Attention:

Accounting Division

"Isang 4n4a, (sang Diwa"

;Ministry of Fina Ministry Order NO.

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2.

Where there is delay in documentation of some reimbursable cost components in an application due to reasons beyond the control of the oil companies, payments for claims already documented may be made. All applications for reimbursement from or payments to the OPSF shall be certified under oath and supported by the following documents: A.

Crude Purchased from PNOC 1.

MOE-Allocated Crude a. b. c.

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Indigenous-Crude a.

PNOC Invoice

b. c. d. e.

PNOC Price Build Up Proof of Payment to PNOC Supplier's Invoice to PNOC BIR RTR and CB confirmation receipt for equalization tax Insurance agreement showing, among other things, the tolerable loss

f. B.

Crude Purchased from Suppliers other than PNOC 1.

Foreign Supplier's Invoice

2.

Bill of Lading

3. 4.

Customs Duty declaration (Import Entry) Insurance agreement showing, among other things, the tolerable loss Proof of payment to supplier and Bureau of Customs

5. C.

PNOC invoice PNOC Price Build Up Proof of Payment to PNOC

Imported Petroleum Products 1. 2. 3. 4.

Foreign Supplier's Invoice Bill of Lading Customs Duty declaration (Import Entry) Insurance agreement showing, among other things, the tolerable loss

5. 6.

Proof of payment: to supplier and Bureau of Customs Importation clearance from Bureau of Energy Utilization (BEU) in connection with BEU Memorandum Circular No. 82-07-159 dated July 12, 1982.

Ministry of Finance Ministry Order No.

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3.

In addition to the foregoing documentary requirements, all applications shall include: A.

BEU Certification of compliance with MOE Memorandum Circular No. 84-12-22 dated December 20, 1984 for all crude imports; and

B.

Oil Industry Committee on Foreign Exchange's certification as to the-foreign exchange rate applicable to the remittance including the respective Bank Certifications for the lowest five quotations.

SECTION 5. Amounts payable to the OPSF shall be remitted to the Ministry of Energy Cashier-at Merritt Road, Fort Bonifacio, Makati, Metro Manila. This shall be due and payable not later than the 20th of the month following the month of the remittance of the foreign exchange payment for the import or the month of the payment to the domestic producer in the case of locally produced crude. SECTION 6. Each application should include a detailed computation of the amount being claimed and should show the following information: A. B. C.

Crude type of product imported Vessel and voyage number Bill of lading date, except for MOE-allocated crude

D.

Arival date

E. F. G. H. I.

Billed volume Received volume Tolerable loss factor (in %) per insurance agreement Actual loss factor (in %) Actual foreign exchange rate paid.

SECTION 7. The Ministry of Energy shall determine the adequacy of documentation of claims and resolve problems in the computation'of payments due to the OPSF and in the processing of claims for reimbursement therefrom. SECTION 8. The computation of the reimbursements from and payments to the OPSF shall be maFie on the basis of the following foreign exchange reference rates inclusive of the 1% foreign exchange but exclusive of all bank fees and charges as follows:

' 'Ministry of F^'nance Ministry Order No.

Shipment Loading Date

4. Reference Exchange Rate (V/US $) ___ _ -

October 20, 1984 - January 8, 1985 6, 1985 January 9, 1984 - March 7, 1985 to next price adjustment March

20.20 19.947 18.685

s Future foreign exchange reference rates as set by the Board of Energy shall be published by the Ministry of Energy. SECTION 9. To pay in part for foreign exchange risk, the oil companies shall pay to the OPSF a charge of one-half percent per month for the first 120 days of cover, and one percent per month thereafter based on the actual peso value of the foreign exchange payment for the shipment. This charge shall be deductible from any reimbursement claimed by the oil company.

SECTION 10. The OPSF reimbursement may be in the form of reimbursement certificates to be issued by the Ministry of Energy. Such certificates may be used to pay amounts due to the OPSF. Reimbursement certificates shall be transferable between and among the oil companies who are recipients of such certificates. The Ministry of Energy may redeem in cash reimbursement certificates not offset by payments to the fund. All concerned shall be guided. f

ALFREDO PIO "OA, Jr. Acting ni er Manila, Philippines April 12, 1985 Attachment - Annex 1

AtMEX,l SAMPLE COMPUTATION OF OPSF CONTRIBUTION

ME

TO

GiVEW 1. CRUDE OIL SHIPMENT: 22 4 THOUSAND BARRELS OF M I RI FOBl $669 MILLION CIF 2. DATE, OE LOADINGS OCTOBER 28,, 984 - REFERENCE 'FOREIGN EXCHANGE RATE: P20,2U/U $ 4.

ACTUAL FOREIGN EXCHANGE RATE AT DATE OF`PA'YMENT:, CREDIT TERMS :

i

150

AT

129.6GIRBL

Pl€., 53/US$

(INCLUSI.VE OF

MILLIONS -.L

IX

FOREX TAX)`

DAYS

111LL;IOI4 PESOS 8

CIF-PORTION

$6.69 MILLION B,

$6.b3 s

COMPUTATION OF CONTRIBU.TIOa

A.

{f08),

X (P20,20 - P13.&')

11.17

CUSTOMS DUTY $6.63 MILLION- X,

27.5 % DUTY RATE X (P20.20 -.'PB.53)

3.04

BOE FEE

$ 6,59

MILLION

X . 1%

K

(P20.20 • P18.'3)

Ol

DOC. STAMPS

$6,63.MILLION

X .1%. X (P20.20 - PIS.53) TOTAL.

14.23