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REPUBLIC OF THE PHILIPPINES =
HOUSE OF REPRESENTATIVES Rete
Quezon City TINE

SEVENTEENTH CONGRESS
First Regular Session

House Bill No. 2723

~ Tntroduced by MAGDALO Party-List Representative
HON. GARY C, ALEJANO.

EXPLANATORY NOTE

History has shown that the wealth and destinies of the world’s greatest nations have been
determined and charted by the manner in which they conducted their maritime affairs. Our
country is now at the crossroads of development and our maritime sector can. rightfully claim
that it has made a significant contribution towards achieving this feat. The Philippines is, after
all, a maritime country. It is an archipelago of 7,108 islands with a territorial sea that is both a
sea chest of vast marine wealth and natural highway for the carriage of trade and commerce.

With the coming into force of the United Nations Convention on the Law of the Sea in
November 16, 1994, the Philippines has thereby gained an Exclusive Economic Zone totaling as
much as 652,800 square nautical miles in area, with sovereign rights over the exploration and
exploitation of all living and non-living resources found in the water column as well as in the
seabed. Our fisheries sector employs around one million Filipinos and contributes much to GNP.
Properly explored and exploited, our vast waters and continental shelf promise to provide even
greater opportunities for livelihood for our people.

The Filipino people, scattered around these numerous islands, have since time immemorial
depended on the sea for transportation. Even in this age of great progress in air and land
transportation shipping remains the most economical, most efficient, and most important means
of interisland.

Considering the relevance of a Department of Maritime Affairs to the development of the
national patrimony and to the achievements of the country’s long-term goal of self-reliance and
economic self-sufficiency, the sponsor believes that the approval of this bill is of urgent priority.

LY G ALEJANO


REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES,
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

House Bill No. 2723

Introduced by MAGDALO Party-List Representative
HON. GARY C. ALEJANO

AN ACT
CREATING THE DEPARTMENT OF MARITIME AFFAIRS PROVIDING FUNDS
THEREFOR AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:

CHAPTER 1
SECTION 1. Title. - This Act shall be known as the “Department of Maritime Affairs

SEC. 2. Declaration of Policy. - In keeping with Article XII, paragraph 2 of the
Philippine Constitution which provides that, “the State shall protect the nation’s marine wealth in
its archipelagic waters, territorial sea, and exclusive economic zone and reserve its use and
enjoyment exclusively for Filipino citizens,” it is hereby declared to be the policy of the State to
achieve a marine-based economy. It shall further be the policy of the State to promote, ensure,
and coordinate the economic viability, protection, safety, and development of ports, shipping,
shipbuilding, seafaring, and other industries or activities which resolve around the sea as a

medium of transport.

CHAPTER I
SEC.3. Creation of a Department of Maritime Affairs. - Pursuant to the above-

mentioned national policy, there is hereby created a Department of Maritime Affairs, hereinafter


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referred to as the Department, which shall, among others, recommend and implement the

Government's policies, plans, and programs for the promotion of safety and development of

ports, shipping, shipbuilding, seafaring, and other activities in the maritime industry.

SEC. 4. Powers and Functions. - The Department shall perform the following powers

and functions:

a)

b

©)

Encourage, promote, guide, and when necessary, regulate such business activities
relative to the exploration, exploitation, development, management, trade and
utilization of marine resources including marine transportation, port system and other
related activities; ‘

Assess, review and, in coordination with relevant government agencies, provide
direction to research and development programs including identification of source of
marine resources and determination of their commercial feasibility for development
and utilization;

Give full and complete effect to all International Maritime Organization Conventions
to which the Republic of the Philippines at present is, or in the future shall be a Party;
Conduct in-depth studies on all policy areas and options with respect to the
country’s implementation of IMO Conventions, the United Nations Convention on
the Law of the Sea, and other pertinent international conventions and national laws;
Monitor foreign and domestic developments relative to the formulation and
implementation of the country’s strategy in implementing the provisions of the
United Nations Convention on the Law of the Sea and other international conventions
including the determination of the maritime area of the country and to ptotect the
integrity of the said area;

Recommend measures to provide assistance to the private sector for the improvement

and upgrading of maritime transportation and infrastructure like ports, lighthouse,


agencie:

offices:

shipyards, fishports, refrigeration facilities, processing plants and other related

facilities; and

g) Promote, develop and monitor the continuing education, training and qualification,
availability and deployment of seafarers and other maritime manpower aboard local
and foreign vessels consistent with international standards and conventions; and

h)

Generally exercise all powers and duties necessary to implement the national policy

on maritime affairs pursuant to the objectives of this Act.

SEC. 5. Organization. - The Department shall consist of the following offices and
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a) Department Proper

db)

Maritime Industry Development Authority

°)

Philippine Ports Authority

d) National Seafarers Administration

Philippine Merchant Marine Academy
£) National Maritime Polytechnic

Maritime Research Institute

8)
h)

Philippine Coast Guard

SEC. 6. Department Proper. - The Department Proper shall consist of the following

a) Office of the Secretary. - The Office of the Secretary shall consist of the Secretary
and his immediate staff.
b) Undersecretaries. - The Secretary shall be assisted by three (3) Undersecretaries,

appointed by the President upon the recommendation of the Secretary. Each


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Undersecretary shall have control and supervision over the respective offices and
services assigned to him by the Secretary.

©

Assistant Secretaries. — The Secretary shall also be assisted by four (4) Assistant
Secretaries, appointed by the President upon the recommendation of the Secretary.
This will be one each for Merchant Marine Administration, Maritime Industry

Development, Ports and Harbors, and the Coast Guard.

SEC. 7. Head of the Department. - The head of the Department, hereinafter referred to
as the Secretary, shall be appointed by the President subject to confirmation of the Commission

on Appointments.

SEC. 8. General Powers, Terms of Office ad Compensation of the Secretaty.- The
authority and responsibility for the exercise of the Department's power and fimetfons shall be
vested in the Secretary, who shall hold office at the pleasure of the President and shall receive

the compensation, allowances, and other emoluments to which heads of departments are entitled.

SEC. 9. Specific Power and Functions of the Secretary. - The powers and functions of
the Department shall be exercised by and through the Secretary, who shall:

a) exercise control and supervision over all offices and bureaus under the Department;

b) coordinate all policies and programs relating to maritime and marine affairs as
provided in this Act;

©) undertake consultations with other member of the Cabinet and other members of
Government officialdom relating to maritime and marine matters and recommend
policies and programs to the President relative thereto;

4d) advise the President of the activities, programs, plans and all information necessary or

relevant to maritime or marine affairs.


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SEC. 10. Offices in the Department. - The Department shall have, under the supervision

and control of the Secretary, an Administrative Service, a Financial and Management Service,

and a Planning Service with the following functions:

a) The Administrative Service shall be responsible for providing the Department with

b)

°)

services relating to personnel, legal assistance, information, records, supplies,
equipment, and custodial work;

The Financial and Management Service shall be responsible for providing the
Department with staff advice and assistance on budgetary, financial, and management
improvement matters;

The Planning Services shall be responsible for providing the Department with
services relating to planning, programming, project development, including
development policies and programs and priorities as may be warranted by domestic

and intemational development,

SEC. 11, Transfer of Bureaus, Offices and Agencies. - The following bureaus, offices

and agencies will be transferred from their respective departments (as shown in parenthesis) to

the Department of Maritime Affairs.

a)

b)

°)

d

e}

8)
h)

Maritime Industry Authority (DOTC)

Philippine Ports Authority (DOTC)

Philippine Merchant Marine Academy (DOTC)

Philippine Coast Guard (OND)

Seafarers Section of the Philippine Overseas Employment Administration (DOLE)
Seafarers Section of the Overseas Workers Welfare Administration (DOLE)
National Maritime Polytechnic (DOLE)

Maritime Training Council (DOLE)


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CHAPTER I
THE MARITIME INDUSTRY DEVELOPMENT AUTHORITY
SEC. 12. The Maritime Industry Development Authority. To carry out the policies and
purposes of promoting the growth and developing the economic viability of the maritime
industry, the Maritime Industry Authority together with its capital assets, equipment, and
existing budget is hereby transferred from the Department of Transportation and
Communications to the Department of Maritime Affairs and is hereby renamed the Maritime

Industry Development Authority.

SEC. 13. Composition and Organization. ~ The Maritime Industry Development
Authority is hereby created initially consisting of the existing officials and employees of the

Maritime Industry Authority, headed by an Administrator,

SEC. 14. Powers and Functions. — The Maritime Industry Development Authority shall

have the following powers and functions:

a) Develop and formulate plans, policies, programs, projects, standards, specifications
and guidelines geared toward the promotion and development of the commercial and
economic viability of the maritime industry, the growth and effective regulation of
shipping enterprises;

»)

Establish, prescribe and regulate routes, zones and/or rates pertinent to the operation
of particular operators of public water services;

°)

Issue Certificate of Public Convenience for the operation of domestic and overseas
water carriers;

4) Determine fix and/or prescribe changes and/or rates pertinent to the operation of
public water transport utilities, facilities and services except in cases where charges or

rates are established by international bodies or associations of which the Philippines


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is a participating member or by bodies or associations recognized by the Philippine
Government as the proper arbiter of such charges or rates;

©) Acoredit maritime enterprises engaged in shipbuilding, ship repair, ship breaking,
domestic and overseas shipping, ship management and agency;

f) Establish and prescribe rules and regulations, standards and procedures for the
efficient and effective discharge of the above functions, and

2) Perform such other functions as may now or hereafter be provided by law.

CHAPTER IV
THE PHILIPPINE PORTS AUTHORITY
SEC. 15. The Philippine Ports Authority. - To carry out the policies and purposes of
integrating and coordinating port planning, development, control and operations at the national
level, and at the same time promote the growth of regional port bodies responsive to the needs of
their individual localities, the Philippine Ports Authority, including all its capital assets,
equipment and existing budget, is hereby transferred from the Department of Transportation and

Communications to the Department of Maritime Affairs.

SEC. 16. Composition and Organization. — The Philippine Ports Authority is hereby

transferred consisting of its existing officials and employees, headed by the General Manager.

CHAPTER V
THE NATIONAL SEAFARERS ADMINISTRATION

SEC. 17. The National Seafarers Administration, in order to carry out the policies and
purposes of promoting, developing and monitoring the continuing education, training, welfare
and deployment of Filipino seafarers and other maritime workers aboard local as well as foreign

vessels, consistent with international practices, standards and conventions the National Seafarers


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Administration is hereby created, The officials and personnel of the Philippine Overseas

Employment Administration involved in the administration of Filipino seafarers are hereby

transferred to the National Seafarers Administration. Likewise, all equipment, records and the

existing budget appertaining to such functions and duties, will be transferred to the National

Seafarers Administration.

SEC. 18. Powers and Functions, — The National Seafarers Administration shall have the

following powers and functions:

a)

b)

°)

d)

g)

)

Develop and formulate plans, policies, programs and procedures for the education,
training and qualification, welfare, employment and protection of the rights of
Filipino seafarers;

Maintain and complete registry of Filipino seafarers;

Provide free placement services for seafarers;

Secure the best possible terms and conditions of employment for seafarers, and to
ensure compliance thereof

Regulate the activities of manning agents or representatives of shipowner in the hiring
of seafarers for overseas employment;

Ensure that the requirements of pertinent international organizations and maritime
conventions on the standards of training and qualifications of Filipino seafarers are
fully complied with;

Accredit and certify maritime training centers to ensure proper compliance with the
provisions enumerated in paragraph f) above;

Provide the necessary technical expertise on the supervision of nautical arid marie
engineering schools and colleges;

Have original and exclusive jurisdiction over all matters or cases, including money

claims, involving employer-employee relations arising out of any law or employment


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contracts involving Filipino seafarers for overseas employment. In: such cases, the
decision of the National Seafarers Administration shall be final and unappealable;

j) Establish a proper and legal forum for the disciplining of errant seafarers in order to
protect the reputation and excellent image of the good Filipino seaman; and

k) Perform such other functions as may now or hereafter be provided by law.

CHAPTER VI
THE NATIONAL MARITIME POLYTECHNIC
SEC. 21. The National Maritime Polytechnic.- To serve as the primary institition for
the upgrading of skill of the merchant marine, the National Maritime Polytectinic (NMP)
including all its capital assets, equipment, and existing budget, is hereby transferred from the

Department of Labor and Employment to the Department of Maritime Affairs.

SEC. 22. Composition and Organization.- The National Maritime Polytechnic is hereby
transferred consisting of its existing officials and employees, headed by the Executive Director
and shall continue to perform all its functions and retain all its powers, rights, and prerogatives as
mandated by its charter. Provided, however, that the chair of the NMP Board of Trustees shall be

transferred from the DOLE Secretary to the DMA Secretary.

CHAPTER VIL
THE MARITIME RESEARCH INSTITUTE
SEC. 23. The Maritime Research Institute, - The Maritime Research Institute is hereby

created as an attached agency under the Department of Maritime Affairs.

SEC. 24. Organization.- It shall be composed of:


1 a) Maritime Research Institute Board of Governors which shall serve as the governing

20° board; and

3 b) The “Administration” which, as the executive arm, shall run the Institute’s day-to-day
4 activities and shall be headed by the executive director.

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6 SEC. 23. Functions, - The Maritime Research Institute shall have the following
7 functions:

8 a) To spearhead and encourage the development of a maritime research program to aid
9 the formulation of policies on all aspects of maritime affairs;
10 b) To hamess and propagate the latest development in maritime technology in the fields

n of shipbuilding, marine engineering, ship propulsion, cargo handling, sip

ry management and other such developments and to utilize and adopt the latest in
1B information technology to serve National Maritime Policy goals;

“4 ©) Develop, propagate, and enhance national awareness of maritime issues through a
15 comprehensive information program;

16 4) Publish information, books, monographs, and other literature in connection with the
7 above functions; and

18 ©) Perform such other functions as may now or hereafter be provided by law.

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20 CHAPTER IX

21 ‘THE PH ILIPPINE COAST GUARD

n SEC, 24. Establishment and Transfer. - The Philippine Coast Guard, hereinafter

23. referred to as PCG, is hereby established as a major service separate and distinct from the
24 Philippine Navy. It shall henceforth be transferred ftom the Department of National Defense to

25 the Department of Maritime Affairs as a bureau thereof.


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SEC. 25. General Power and Functions of the PCG. - The PCG shall be the agency

primarily responsible for safety of life and property at sea, the protection of the marine

environment and, together with the Philippine Navy, the security of all marine resources found

within the Exclusive Economic Zone and within all other waters and seabed’s subject to the

jurisdiction of the Republic of the Philippines. It shall likewise perform such other functions as it

is authorized to perform at the time of the effectivity of this Act.

SEC. 26. Specific Functions, - The Philippine Coast Guard shall perform the following

specific functions:

a) Promulgate and enforce maritime rules and regulations for the promotion of safety of

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°)

d

life and property at sea;

Render aid to distressed persons and vessels on the high seas and waters subject to
the jurisdiction of the Philippines, to furnish clothing food, lodging, medicines and
necessary supplies and services to persons succored; and to take appropriate actions
‘on remains of those who have perished;

Register all Philippine merchant vessels; to issue safety certificates of Philippine
vessel; to approve plans for the construction, repair, or alternation of vessels; to
administer load line requirements for the promotion of the safety of life and property
at sea; conduct annual or periodic surveys and inspection of all Philippine-registered
vessels and issue certificates prescribed in the regulations consistent with
international standards; collect tonnage and other fees directly related to vessel safety
inspection, documentation and compliance with international standards; to assist in
the development of a single Philippine Classification Society;

Formulate, issue, administer, and enforce the Code of Maritime Regulations for the
design, construction, equipment, manning, operation, repair, alteration, and

maintenance of all Philippine-registered vessels and all off-shore facilities employed

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in the exploration and exploitation if marine and seabed resources within the waters
subject to Philippine jurisdiction;

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Conduct inquiries, visits, examination, and inspection on vessels in waters subject to
the jurisdiction of the Philippines for the promotion of safety of life and property at
sea and for the protection of the marine environment;

) Promulgate and enforce rules and regulations in the construction, outfitting, manning,
documentation and operation of motor boats, fishing vessels, and pleasure craft not
required to be issued a Certificate of Philippine Registry;

g) Promulgate and enforce rules and regulations on maritime communications to

promote safety of life and property at sea;

h)

Regulate salvage operations and destroy or remove hazards to navigation in order to

promote safety of life and property at sea and to preserve the marine environment;

Investigate marine accidents, including all marine protests relative to the
responsibility and liability of ship owner and officers and to impose administrative
sanctions appertaining thereto;

i) Qualify and issue licenses to harbor pilots and bay and river patrons through proper
examinations;

®

Conduct proper examinations and carry out such other tasks of the Board. of Marine

Examiners for the issuance and up grading of Merchant Marine officers licenses;

1) Develop, establish, operate, and maintain aids to navigation facilities and collect aids
to navigation dues for this purpose from users thereof;

m) Develop, establish, operate, and maintain marine environmental protection facilities;

n) Enforce laws and to promulgate and enforce rules and regulations for the prevention

of marine pollution within the territorial waters and Exclusive Economic Zone of the

Philippines and determine and impose penalties for violations thereof,


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©) Impose administrative penalties of maritime violations and offenses incurred by
vessels within the territorial waters of the Philippines as well as violations by
Philippine-registered vessels in foreign and international waters without prejudice to

the civil liabilities of the offender in accordance with existing laws;

p) Conduct port State control inspections on foreign-flagged vessels calling at Philippine
ports in accordance with national laws and regional and international agreements;

q

Detain ships found to be with deficiencies that may pose a grave threat to the safety
of the passengers and crew and to the vessel and its cargo, or to the marine
environment until such time that the deficiencies are rectified in accordance with
established rules and regulations;

y)

Promulgate, administer, and enforce rules and regulations giving effect to the
provisions of International Treaties, Conventions, Protocols and Municipal Laws for
the safety of life and property at sea;

8)

Represent the Philippine government in intemational and regional for a concerning

INO and other maritime matters;

Collect international tonnage fees for Philippine-registered vessels in the international
trade to take care of Philippine obligation with the International Maritime
Organization’

u)

Assist other governmental agencies in the performances of their law enforcement
functions against seajacking, piracy, illegal entry, illegal fishing, illegal gathering of
corals and other marine products, smuggling and other frauds and violations that may
be committed within the waters of the Philippines. For this purpose, surveillarice
boarding and inspections by the Philippine Coast Guard may be made on vessels
entering or leaving Philippine waters. In the performance of these functions, memibers
of the Philippine Coast Guard shall act as a law enforcement officers of such

agencies;


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v) Organize, train, and supervise the Philippine Coast Guard Auxiliary for the purpose
of assisting in conducting search and rescue, marine environmental protection,
maintaining aids to navigation and such other activities that enhance civil relations to
include civic action, youth development, and related activities;

w) Maintain and operate all government vessels above 50 gross tons not otherwise
assigned to the Philippine Navy, except tug boats and dredges used by the Philippine
Ports Authority, in such case, the operations shall solely be for the mission of the
agency concemed except the PCG may utilize the vessels for search and rescue
purposes when not on actual mission; and

x) Perform such other functions as may now hereafter be provided by law.

SEC. 27. National Emergencies, - In time of war or national emergency, the President
may direct the PCG to operate under the Atmed Forces of the Philippines. Such authority shall

continue until the President revokes the same.

SEC. 28. Organization. - The PCG shall be headed by a Flag Officer equivalent in rank
to the Flag-Officer-in-Command, Philippine Navy. It shall consist of uniformed and non-
uniformed personnel with defined Coast Guard Table of Organization specialties, ranks and
ratings, It shall also have an independent administrative and logistics system. The Commandant,
Philippine Coast Guard may modify its present organizational structure effectively and efficiently

carry out PCG-defined functions.
SEC. 29, Personnel. - PCG personnel shall be governed by the following rules:

a) All personnel assigned to the Philippine Coast Guard shall be transferred out of the
Philippine Navy (PN) upon effectivity of this Act provided that the transfer may be

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b)

allowed in and out of the Navy and the AFP within the transition period provided
herein; and

The PCG shall continue to source its commissioned officers form the same fields as
that of the PN; it also shall, until such time that a Philippine Coast Guard Academy
shall have been organized, be authorized to recruit graduates from the Philippine
Merchant Marine Academy under terms and conditions to be determined by the
Secretary of Maritime Affairs; Provided that the PCG may accept graduates with
baccalaureate degrees to be commissioned in the PCG service from other merchant

marine institutions and other schools recognized by the Government.

SEC. 30. Relations with Other Agencies.~

a) The Philippine National Police shall primarily perform law enforcement activities in

i)

the maritime environment in pursuance of the provisions of the Revised Penal Code,
provided, that nothing in this Act shall prevent the appropriate PNP unit from being
deputized by the appropriate agency to perform the respective maritime law
enforcement function in coastal areas; and

Consistent with the objectives of the National Defense Act, in the pursuit of reserve
training, and in the interest of keeping abreast of current developments in maritime
transportation, the Commandant, Philippine Coast Guard may allow the periodic
service of duty qualified and licensed Philippine Coast Guard personnel on board
Philippine-registered merchant vessels under such rules and regulations as the

Commandant may prescribe.

SEC. 31. Transitory Provisions. - The PCG shall be governed by the following

provisions:


a) Officers in the grade of PN Flag and Captain who have had considerable tours of duty
with PCG may opt to join the PCG and likewise those already with the PCG ma y opt
to leave within the initial year upon the effectivity of this Act after which they shall
no longer be allowed to transfer;

»b)

Other Philippine navy and AFP personnel below the grade of Captain PN or
equivalent who have qualified for Coast Guard eligibility may also join the PCG
subject to the vacancies of the prescribed organizational rank structure within the

transition period of one (1) year.

SEC. 32. PCG Funds and Expenditures, - The accrued income of the PCG from its
operation and exercise of various regulatory functions shall be declared as PCG Trust Receipts
and shall be made available to the PCG for the improvement and maintenance of basic services
in the same manner prescribed in Executive Order No. 1002. These funds shall be utilized only
for the following expenditures in an appropriate budget as prescribed in Executive Order No.
1002, subject to approval of the Secretary of Maritime Affairs:

a) Printing of forms and certificates directly related to the services for which they were

collected:

b)

Provision for other supplies and services for which the fees were collected;

°)

Participation in international organizations and commitments to included payment of
annual assessment and dues to the International Maritime Organization (IMO) and
International Association of Lighthouse Authorities (IALA) and for other
international agreements when the fees for the same cannot be fully covered in the
annual appropriations;

4) Maintenance of the International Maritime Organization (IMO) attaché post as
prescribed under Bxecutive order No. 162, when funds for the same cannot be fully

covered in the annual appropriations,


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SEC. 33. Assets.- All assets of the PG including all its vessels, armaments, vehicle and
their accessories, building, real estates, lighthouses and other properties and records are hereby
vested in the newly established PCG: Provided that a Transfer and Liquidation of committee

shall be created to undertake the disposition and appropriate inventory of all these properties.

CHAPTER XI
FINAL PROVISIONS
SEC. 34. Appropriation. - To carry out the purposes of this Act, there is hereby
appropriated out of any funds of the National Treasury not otherwise appropriated, the sum of
Fifty million pesos (P50, 000, 000.00) for the operation and maintenance of the Départment;
Thereafter, the appropriation for the Department, its bureaus, offices and agencies shall be

included in the annual General Appropriations Act.

SEC. 35. Appropriations of Offices and Agencies to be transferred. - All ffices,
bureaus, and agencies being transferred to the Department of Maritime Affairs shall continue to
operate using all funds already appropriated to them for the rest of the fiscal year in which: this

Act was approved.
SEC. 36. Repealing and Modifying Clause. PD 857, RA 3680, RA 5173, PD 601, LOL
1404, BO 493, PD 474, EO 125, EO 125-A, and all other laws, executive orders, rules and

regulations inconsistent herewith are hereby repealed, amended, or modified accordingly.

SEC. 37. Effectivity. - This Act shall take effect fifteen (15) days after its publication in

a newspaper of general circulation

Approved,