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Multi-code CDMA (MC-CDMA) can not only be integrated easily with a conventional system, but also achieve good spectral efficiency and high processing gain. However, it suffers from high value of peak-to-average power ratio (PAPR). In this paper, we propose a multi-phase CDMA (MP-CDMA) system that can provide variable rate service and is not susceptible to the nonlinear characteristics of the amplifier. The clipping is introduced at the output of the multi-code modulator and at the input of the MPSK modulator in order to improve the performance of the MPSK chip demodulator and reduce the system complexity. The system performance is compared for the different number of codes and different clipping levels. The optimum clipping level is also evaluated for a different number of codes in both AWGN and frequency flat fading channel.