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FOURTEESTH CONGRESS OF THE 
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REPUBLIC OF THE PHILIPPINES 
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Second Regular Session 
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S .  13. No. 
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INTRODUCED BY THE HONORABLE MAR ROXAS 
EXPLANATORY NOTE 
A strong and competitive merchant marine fleet is essential to the growth of our 
economy. However, the number and tonnage of Philippine-registered fleet continue to 
decline due to the country’s unattractive tax incentives and lack of access to financing 
schemes. Instead, operators register their vessels elsewhere where they get better treatment 
and access to funds to boost their ship acquisition. The number of overseas shipping vessels 
registering under the Philippine flag has been declining at a rate of 9% annually from 2001 to 
2007. It is important to have a flag registry which is attractive to ship owners and be a base 
for investments for our economy. An attractive registry can be a key to opening up ancillary 
businesses such as ship management, ship building, ship repair, bunkering, and other 
shipping-related businesses which can serve as a base of employment for our seafarers whose 
technical skills can be put to good use in tliese business areas. 
In order to make the Philippine flag an attractive registry, the existing iegal 
framework must be reformed. We can only expand our fleet if we can provide a legal 
framework, which will encourage and allow ship owners to enter into long term vessel 
acquisition, development, modernization and expansion programs that is consistent with the 
international standards. 
Tax Incentives 
The tax structure of Philippine ships must be aligned with international practices to 
make the Philippine flag an attractive flag registry. Most jurisdictions exempt vessels from 
corporate taxes and instead collect a tonnage tax from national flag vessels in lieu of income 
taxes. This allows for easier tax management and better revenue collection considering the 
difficulty in monitoring revenues and expenses of vessels, particularly those engaged in 
international trade. 
Maritime Liens and Ship Mortgages 
The access to financing has long been a concern of Philippine ship owners. They 
have asserted that Presidential Decree No. 1521, otherwise known as the ‘Ship Mortgage 
Decree of 1978 is defective and unacceptable to foreign bankers because the liens are not 
clearly delineated and is not aligned with international standards. 


This backdrop has led to a belief held by foreign bankers that liens and mortgages 
created over Philippine flag vessels are uncertain. This belief is further reinforced by what 
they consider as the confusing manner by which the registration of mortgages is made 
principally because ship registration is decentralized and the vessel can be registered in any 
port of the Pldippines where the Philippine Coast Guard has a detachment. This has made 
access to financing for the construction and acquisition of ships difficult for Philippine ship 
owners. 
Enforcement of Marih'me CIaimS 
Since the matter of setting straight the rules on ship mortgages cannot be settled 
without delving into the priorities of preferred maritime liens as well as maritime claims that 
do not enjoy any priority, there is a need to reconcile the rules of mortgages with that of 
preferred maritime liens as well as that of other maritime claims. 
It is recognized that a law on maritime liens and mortgages cannot be properly 
enforced in accordance with international practices unless the appropriate procedure is 
provided. This can only be done if Philippine law can provide for a legal framework that 
refines the present grounds for the arrest of ships which are limited to: (1) a violation of 
Customs regulations, and (2) an arrest to acquire jurisdiction over an absentee defendant so 
that it covers the closed list of maritime claims recognized by international practice and for 
which the arrest of a vessel can be effected. 
This bill, therefore, seeks to update our law on ship registration, fix our law on ship 
mortgages, and provide a legal framework for the enforcement of maritime claims, the arrest 
of vessels and the establishment of limits of liability for maritime claims by aligning our 
maritime laws with the requirements of international maritime coiiventions and allow us to 
achieve uniformity with international standards. 
In view of the foregoing, the immediate enactment of this measure is earnestly 
sought. 


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FOURTEENTH CONGRESS OF THE 
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REPUBLIC OF THE PHILIPPINES 
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Second Regular Session 
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S E N A T E  
S. B. No. 
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INTRODUCED BY THE HONORABLE MAR ROXAS 
AN ACT 
INSTITUTING SHIPPING INDUSTRY REFORMS, PROVIDING FOR THE 
PURPOSE A CLEAR SYSTEM OF SHIP REGISTRATION AND INCENTIVES 
THEREFOR, A COMPREHENSIVE MECHANISM FOR SHIP MORTGAGES, 
MARITIME CLAIMS AND MARITIME LIENS, AND FURTHER DEFINING 
THE PARAMETERS FOR SHIP ARREST AND MARITIME LIABILITY 
LIMITATION AND FOR OTHER PURPOSES. 
Be it enacted by the Senate and the House ofRepresentatives of the Philippines in Congress 
assern bled: 
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Title I 
2 
General Provisions 
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Chapter I 
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Policies 
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SECTION 1. Short Title o f  the Acr - This Act shall be known as “Tlie Philippine 
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Shipping Industry Reforms Act of2009. 
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SEC. 2. Declaration of Policies - The State recognizes that shipping is a necessary 
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infrastructure which is vital to the economic development of our country. 
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The Philippines needs a strong and competitive merchant marine fleet owned and 
1 0 controlled by Filipinos, manned by qualified Filipino officers and crew, which shall: 
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(a) 
Ensure safe, reliable, efficient, adequate and economic passenger and cargo 
seivice through the maintenance of well-equipped, safe and modern vessels most suitable for 
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Philippine overseas and domestic shipping requirements and conditions; 
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(b) Ensure the growth of exports by providing necessary, competitive and economical 
sea linkages through the provision of ships that are capable of meeting the requirements of 
expanding Philippine international trade; 
(c) Encourage the dispersal of industry arid the economic development of OUT regional 
communities by ensuring the availability of regular, reliable and efficient shipping services; 
(d) Function as an employment base for the growing community of highly skilled and 
qualified Filipino seafarers; 
(e) 
Provide a means to access financing to encourage long term vessel acquisition, 
development, modernization and expansion programs principally driven by private 
investments; and 
(0 Serve as a naval and military auxiliary in times of war and other national 
emergencies. 
The State shall promote such other necessary administrative and executive policies 
that will ensure the continued growth of the Philippine merchant fleet in consonance with 
international practices and provide a mechanism for the early adoption and implementation 
of international maritime regulations and conventions. 
SEC. 3. Scope o f r h e k t  - Unless otheiwise indicated, this Act shall apply to: 
(a) All merchant marine ships, whether seagoing or coastwise, authorized to carry 
passengers or cargo, or both, which are registered under the Philippine flag; 
(b) A11 persons, pi-tnerships, corporations, firms or other entities duly regisrered and 
licensed to engage in the business of shipping as ship owners, ship operators, bareboat 
charterers, or ship managers, or those acting on their behalf; 
(c) All ship mortgages over Philippine flag vessels registered in accordance with this 
Act and those that are to be enforced against other ships that are found within the 
jurisdiction of the Philippines regardless of nationality; 
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(d) All maritime liens and claims that are incurred in the Philippines or are to be 
enforced 011 slips found within the jurisdiction of the Philippines regardless of nationality; 
(e) All ships arrested for the enforcement of maritime claims that are within the 
territorial jurisdiction of the Philippines regardless of nationaIity; and 
(0 All ships that are within the territorial jurisdiction of the Philippines against 
which a niaritiine claim that is subject to applicable limits of liability is sought to be enforced 
regardless of the nationality of such ship. 
The provisions of this Act, however, shall not apply to any war ship, naval auxiliary 
ship or other ship owned or operated by the Philippine government or any foreign 
government for non-commercial service. 
Chapter 2 
Definitions 
SEC. 4. Definition of‘ Terms. - The following terms shaII have the meanings 
hereinafter set forth: 
a. 
“Arrest” shall mean the attachment of a vessel by judicial process through an 
order of a court in order to secure the enforcement of a maritime claim, which attachment 
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shall produce the effect of detaining or restricting the removal of the vessel from the 
territorial jurisdiction of the Philippines, but shall not include the seizure of a ship in 
execution or satisfaction of a judgment; 
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duration of the lease; 
b. 
“Bareboat charter” shall mean a contract for the lease of a ship, for a stipulated 
period of time, by virtue of which the bareboat charterer has complete possession and 
control of the ship, including the right to appoint the master and the crew of the ship, for,the 
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C. 
“Bareboat charterer” or “charterer” may be used interchangeably and shall 
refer to any person, commercial partnership or corporation which bareboat charters a 
~l~ilippine 
flag vessel from anoilier Philippine national, or a vessel of foreign ownership 
registered in a compatible registry, for its own use; 
d. 
“Board of Marine Inquiry” shall refer to the Board of Marine Inquiry created 
in accordance with section 7 of Presidential Decree No. 601; 
e. 
“Certificate of Philippine Registry” shall mean the document of registration of 
a vessel registered in accordance with section 20 of this Act; 
f. 
“Claimant” shall mean a person who asserts that a niaritiine claim exists in his 
favor; 
g. 
“Classification society” shall refer to any government-accredited organization 
authorized to implement published rules and regulations governing the structural strength, 
safety and reliability of a ship in order to maintain basic conditions on board and enables the 
ship to operate in its intended service; 
11. 
“Coastwise vessel” shall refer to any Philippine flag vessel authorized to carry 
passengers or cargo, or both, between two domestic ports, in the coastal or internal waters of 
the Philippiiies; 
i. 
“Compatible registry” shall mean a foreign registry which has entered into an 
agreement with the Maritime Industry Authority in order to determine and establish the 
requirements for the transfer of registration of ships from one registry to the other; 
1. 
“Court” or “Philippine court” may be used interchangeably and shall refer to a 
court of appropriate jurisdiction within the territory of the Philippines; 
k. 
“De-registration” shall refer to the act of deleting a ship from the Registry of 
Ships of tlze Philippines and the cancellation of the Certificate of Philippine Registvy in 
accordance with Title 11, Chapter 5 of this Act; 
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1. 
“Foreign court” shall mean a court exercising jurisdiction in a territoiy other 
than in the Philippines; 
m. 
“Foreign flag vessel” shall refer LO a ship which is registered under the laws of 
a country other than the Philippines and which is authorized to fly the flag of that country; 
n. 
“Foreign registry” shall mean the registry of ships of a country other than the 
Philippines; 
0. 
“International maritime convention” or “international convention” may be 
used interchangeably and shall refer to any written treaty or agreement, or any protocol or 
amendment thereto, affecting the maritime industry which has been agreed to and approved 
by States as members of the International Maritime Organization or other international 
agency, which the Philippines has ratified and which is in force; 
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“Marine surveyor” shall refer to any government- accredited person, 
organization or classification society authorized to conduct safety inspections and examine 
the general condition of a ship; 
4. 
“Maritime claim” shall d e r  to any of the claims provided in section 88 of this 
Act; 
r. 
“Maritime Industry Authority” shall refer to the government agency created in 
accordance with Presidential Decree No. 474 as amended; 
S. 
“Maritime lien” shall refer to a charge that attaches to a ship which arises from 
a maritime claim against the ship, its owners, charterers, managers or operators that results 
in a demand for iiideninity or remuneration from the ship or its owners, charterers, 
managers or operators and is enforceable by judicial action; 
t. 
“Mortgagee” shall refer to the person, whether natural or juridical, in whose 
favor a ship mortgage is created in order to secure a principal obligation; 
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U. 
“Mortgagor” shall refer to a ship owner who constitutes a ship mortgage over a 
vessel or a vessel under construction registered in its name iii order to secure the fulfillment 
o f a  principal obligarion; 
V. 
“Philippine Coast Guard” shall refel- to the governinelit agency created in 
accordance with Republic Act No. 5173, as amended; 
w. 
“Philippine flag vessel” shall mean any vessel duly registered under Philippine 
laws and authorized to fly the Philippine flag; 
X. 
“Philippine national” shall refer to any individual who is a citizen of the 
Philippincs, or a comniercjal partnership or corporation organized under the laws of the 
Philippines, at least 60% of the capital of which is owned by citizens of the Philippines; 
Y. 
“Registration” shall refer to the act of entering a ship in the Registry of Ships 
of the Philippines in accordance with Title IT, Chapter 1 of this Act; 
2. 
“Registry of Ships of the Philippines” shall refer to the official public register 
maintained by the Maritime Industry Authority in accordance with section 15 hereof which 
shall hold the record of all vessels and its encumbrances registered under Philippine laws and 
shall hereafter be referred to as the “Registry”; 
aa. 
“Seagoing vessel” shall refer to any Philippine flag vessel of 500 gross tons or 
more, authorized to carry passengers or cargo, or both, in trade between a Philippine port 
and a foreign port, or between two foreign ports; 
bb. 
“Ship manager” shall mean any person, commercial partnership or corporation 
to which the technical or commercial management, or both such technical and commercial 
management, of a ship has been entrusted by the ship owner and for that purpose is in 
charge of the operation of the ship which may include, but shall not be limited to, vessel 
maintenance and upkeep, crewing, and passenger and cargo solicitation; 
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CC. 
“Ship mortgage” shall mean a contract executed by the owner of a ship 
creatiiig a security interest over a particuiar v-esse1 or a vessel under construction in order to 
Secure the performance of a principal obligation; 
dcl. 
‘‘Ship owner” shall refer to any person, coinmercial partnership or corporation 
authorized to own, operate, manage, control, lease or charter out, or otherwise engage in the 
business of shipping; 
ee. 
“Ship operator” shall refer to any person, commercial partnership or 
corporation authorized to operate, manage or control a ship owned by another; 
ff. 
“Tonnage” or “gross tonnage’’ may be used interchangekbly unless otherwise 
indicated and shall refer to the ship’s gross tonnage calculated in accordance with the 
tonnage measurement iules provided in the applicable international convention on the 
tonnage measurement of ships; 
gg. 
“Unit of account” shall refer to the special drawing right (SDKs), which is an 
international reserve asset created by the International Monetary Fund (IMF) in 1969 to 
supplement the existing official reserves of member countries. SDRs are allocated to member 
countries in proportion to their IMF quotas. The SDR also serves as the unit of account of the 
IMF and some other international organizations. Its value is based on a basket of key 
international currencies. 
hh. 
“Vessel” or “ship” may be used interchangeably and shall refer to any boat, 
craft or artificial contrivance capable of floating in water, designed to be used, or capable of 
being used, as a means of water transport for the carriage of passengers or cargo, or both, 
utilizing its own motive power or that of another, and shall include a ship under 
construction and for purposes of this Act shall continue to be considered as personal 
property; 
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ii. 
“Vessel certificate” shall refer to the official document issued by the 
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appropriate government agency attesting to the fact that the vessel complies with the 
requirements imposed by international conventions or government regulations on safety and 
&e protection of the marine environment. 
Chapter 3 
Regulatory Agencies 
SEC. 5. Implementing Agencies - The implementation of this Act shall be vested in 
the Maritime Industry Authority and the PbiIippine Coast Guard. 
SEC. 6. Powers and Functions of the Maritime Industry Authority - For the purposes 
of this Act, the Maritime Industry Authority shall have the following powers and functions: 
a. 
b. 
Accredit and license ship owners and operators; 
Maintain the Registry of Ships of the Philippines; 
Record all registrations, de-registrations, deletions, transfers, sales, purchases, 
c. 
bareboat charters, and mortgages of Philippine flag vessels; 
d. 
Issue certificates of Philippine registry, provisional certiricaies of Philippine 
registry and such other authorizations, clearaims and documents required to give effect to 
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Philippine registry; 
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any registration or de-registration of any vessel; 
e. 
Issue certificates of ownership to vessels which are not eligible for the issuance 
of a certificate of Philippine registry; 
f. 
Conduct an inquiry on any application for the issuance of a certificate of 
g. 
Deputize the Philippine Coast Guard for the registration of vessels that are 
within the Philippines and the collection of fees incident to such registration; 
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11. 
Deputize Philippine consular ofricers or maritime attaches for the registration 
of vessels wanting to transfer to the Philippine registry but are outside the territorial 
jurisdiction of the Pliilippiiies and the collection of fees incident to such registration; 
1. 
Enter into cooperations with foreign registries to determine and establish the 
requirements for registration, de-registration and enforcement in order to ensure the 
compatibility of requirements of the Philippine registry with that of other foreign registries; 
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Issue certificates of public convenience to coastwise vessels; 
Investigate any complaint made in writing, and after notice and hearing, 
revoke any registration, certificate, license, accreditation or document issued to any seagoing 
01- coastwise vessel, ship owner, ship operator, bareboat charterer, or ship manager; 
1. 
Impose fines on or otherwise penalize any vessel, ship owner, ship operator, 
bareboat charterer or ship manager found violating the provisions of this Act; 
m. 
Exercise such other functions necessary for or incidental to the exercise of its 
powers and functions as mandated under this Act. 
S~c.7. Powers and Functions of the Philippine Coast Guard. - For purposes for this 
Act, the Philippine Coast Guard shall have the following powers and hnctions: 
a. 
Enforce laws, promulgate and administer regulations relating to the promotion 
of the safety of life and property at sea, the prevention of marine pollution and the 
protection of the marine environment in accordance with international maritime 
conventions; 
b. 
Approve plans for the construction, repair or alteration of vessels, and the 
materials, equipment and appliances of vessels in accordance with international conventions 
and domestic regulations giving effect to such conventions on the safety of life at sea, marine 
pollution, load line requirements and other related conventions; 
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c. 
Conduct the initial and periodic inspections of vessels as well as their 
e+pinent and appliances either by itself or through the agency of a marine surveyor or 
classification society; 
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Approve the classification of vessels either by itself or through the agency of a 
classification society; 
e. 
Accredit and license surveyors and classification societies and deputize thein 
to perform such functions necessary to give effect to the requirements of international 
maritime conventions and government regulations; 
f. 
Issue certificates of inspection; 
g. 
Determine the safe manning requirements of vessels and the certificates of 
competency which each crew member should possess considering the type, tonnage, power, 
means of propulsion and trading limitations of particular ships and, for this purpose, issue 
safe manning certificates to ships; 
h. 
Determine the safety, life saving, pollution prevention and communication 
equipinent to be installed on board every vessel considering its type, tonnage and trading 
limitations; 
i. 
Investigate on its own or through the Board of Marine Inquiry marine 
casualties, accidents, incidents, disasters and marine protests in order to determine the 
liability of vessels, ship owners, ship operators, bareboat charterers, ship managers, ship 
officers and crew; 
j. 
Impose fines or otherwise penalize any vessel, ship owner, ship operator, 
bareboat charterer, ship manager or classification society found violating the provisions of 
this Act: 
k. 
Exercise such other hnctions necessary for or incidental to the exercise of its 
powers and functions as inandated under this Act. 


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SEC. 8. Issuance of Implementing Rules and Regulations -. The Maritime Industry 
Authority and the Philippine Coast Guard shall jointly issue the necessaqi mles and 
regulations to implement the provisions of this Act; Provided, that such niles and regulations 
sllall not change or in any way amend os be contrary to the iiitenr and purposes of this Act. 
SEC. 9. Power to Adopt Regulations to Conform to Znternational Maritime 
conventions - The Maritime Industry Authority and the Philippine Coast Guard acting by 
themselves, or in conjunction with each other, shall recommend to the Department of 
Transportation and Communications (DOTC), through the Secretary, the adoption of 
international maritime conventions so that the appropriate recommendation can be made, 
and the relevant instrument of ratification may be issued, by the Senate of the Philippines; 
Provided, That in case of a subsequent amendment to any existing international convention 
or treaty to which the Philippines is already a party, both the Maritime Industry Authority 
and the Philippine Coast Guard are hereby empowered and authorized to amend and revise 
their respective rules and regulations to conform with the amendmeiits to the relevant 
convention or treaty without need of further authorization; Provided however, That such 
power and authority to amend and revise shall apply only if the original convention or treaty 
expressly allows for the same and shall be limited only to the technical aspect of the 
convention or treaty. 
Title I1 
Vessels 
Chapter 1 
Registration of Vessels 
SEC. 10. RegistIy of Ships of the Phil@phs. - The Registry of Ships of the 
Philippines shall be the official public registry of ships and shall contain all records of 
registrations, deletions, transfers, bareboat charters, and mortgages of Philippine flag vessels. 
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The Registry shall be open to public inspection during regular business hours. Any 
Fersoli wishing to inspect the Registry, or obtain extracts or copies of instruments deposited 
with Lhe Registry, may do so upon prior written application to and approval of the 
hdnlinistrator of the Maritiine Inclust~y Authority. 
SEC. 11. Vessel Eligibiliry, - Vessels of any size, age or type that are classed by a 
classification society, whether owned or chartered by Philippine nationak, may be registered 
under the Philippine flag. 
Vessels that are more than twenty (20) years old on their first application for 
registration shall be subject to a safety inspection as a pre-condition to the issuance of a 
certificate of'Philippiiie registry. 
Vessels of a foreign registry that are covered by a bareboat charter may be registered 
under the Philippine flag; Provided, that the duration of the bareboat charter is not less than 
one (1) year and its registration under the foreign flag of primary registration shall not be 
abandoned, but shall be deemed suspended, for the duration of the ship's registration under 
the Philippine flag. 
SEC. 12. Vessel Ownership. - Every vessel registered in accordance with this Act 
shall be owned or chartered by one or more Philippine'nationals and, in the case of 
corporations or commercial partnerships, the president and corporate secretary or general 
manager and partnership secretary thereof, as the case may be, shall be citizens and residents 
of the Philippines. 
SEC. 13. Vessels Required to be Registered. - Every coastwise vessel and seagoing 
vessel shall be registered in accordance with the provisions of this ACL. 
To this end, it shall be the duty of the ship owner, ship operator, bareboat charterer, 
or any person acting on behalf of every vessel to apply with the Maritime Industry Authority 
for the registration of the vessel. 
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SEC. 14. Where the Registration is to be Made. -The registration of a coastwise vessel 
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shall be made at its home port or at the port where the nearest regional office of the 
Maritime Industry Authority, or the nearest Philippine Coast Guard detachment deputized 
for the purpose, is located. 
The registration of a seagoing vessel shall be made in the principal office of the 
Maritime Industry Authority in the port of Manila. 
If the vessel is not within the territory of the Philippines at the time of acquisition or 
bareboat charter, the application for registration shall be made through the nearest 
Philippine consular office where the vessel may be found. The Philippine consular office 
receiving the application shall have the duty to foonvard the same to the principal office of 
the Maritime Industry Authority in the port of Manila. 
SEC. 15. The Registry of Ship6 of the Philippines. - The Maritime Industry Authority 
shall maintain the following sub-registries for Philippine flag vessels: 
a. “The Principal Registry of Philippine Vessels” in which the record of all 
registrations, deletions, transfers, leases, bareboat charters out, suspensions of registry, 
mortgages, encumbrances and other commercial transactions of seagoing and coastwise ships 
owned by Philippine nationals shall be made; 
b. “The Bareboat Charter Registry of Vessels” in which all records of registrations 
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and deletions of ships which are bareboat chartered into the Philippines shall be made. This 
sub-registry shall also note clown the following details: 
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the name and address of the registered owner in the primary registry; 
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(ii) 
(iii) 
the registered name of the vessel as it appears in the primary registry; 
a reference that encumbrances on the vessel appear in the primary 
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registry; 
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c. "The Registry of Fishing Vessels" in which all records of registrations and 
deletions of fishing vessels owned by Philippine nationals shall be made; 
d. "The Registry of Yachts and othcr Recreational Vessels" in which all records of 
I-egistrations and deletions of yachts and othcr recreational vessels owned by Philippine 
nationals shall be made. 
SEC. 16. Documents Required for the Registration of Vessels. - Every ship owner or 
bareboat charterer wishing to enroll a vessel in the Registly shall be required to submit the 
following documents to the Maritime Industry Authority: 
a. 
b, 
A written application for registration; 
A notarized copy of the declaration of ownership; 
A certified copy of the Certificate of Sole Proprietorship, or Articles of 
Partnership, or Articles of Incorporation of the ship owner or bareboat charterer, as the case 
may be; 
C. 
d. 
The power of attorney, partnership resolution or secretary's certificate 
authorizing the eiirollmeiit of the ship in the Registry; 
e. 
The tonnage measurement certificate; 
f, 
The certificate issued by a classification society showing that the ship is in 
class; 
g. 
The vessel certificates required by international conventions and domestic 
regulations; 
h. 
The application for a provisional radio license; 
The application for vessel name; 
A certified copy of the cover note or certificate of entry in the name of the 
ship owner or bareboat charterer showing the current hull and machinery, and protection 
and indemnity insurance coverage. 
1. 
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SEC. 17. AdditionalDocuments Required. -- In addition to the documents listed in the 
ilnmediately preceding section, every ship o~vner 01’ 
bareboat charterer shall be required to 
submit the following documents: 
For new buildings: 
(i) A notarized copy of the original builder’s certificate; 
For second hand tonnage: 
(i) A notarized copy of the bill of sale or other document of tide evidencing 
the transfer, 
(ii) The certificate of deletion from the previous registry; 
(iii)Tlie certificate of non-encumbrance issued by the previous registry; 
(iv)A safety inspection certificate if the vessel is more than twenty (20) years 
old; 
For bareboat chartered or leased ships: 
The proof of ownership and consent of the registered owner to the vessel’s 
enrollment in the Registry; 
A certified true copy of the bareboat charter; 
If the bareboat charterer wishes to change the vessel’s name, a letter 
requesting the change of name of the vessel from that appearing in its 
primary registry and the reason for the request; 
The written consent to the transfer of registry of the holders of all 
mortgages, hypothecations or similar charges against the vessel registered 
in the foreign registry; 
Certified true copies of all mortgages, hypothecations, and charges, with an 
English translation of such documents; 
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(vi) 
The written consent LO the bareboat charter registration of the appropriate 
authority of' the country of primary registration of the vessel, or 
satisfactory evidence that such coiisent is not required; 
(vii) 
A transcript of the register or other document from the appropriate 
authority of the country of primary registration showing all recorded 
mortgages and encumbrances on the vessel appearing in that registry; 
A safety inspection certificate if the vessel is more than twenty (20) years 
old. 
(viii) 
Such other documents necessary to support the application for the enrollment of ships 
in the Registry as may be required by regulation. 
S~c.18. Data to be Listed in the Registv. - 
The following data shall be listed, in 
such form and detail for all ships entered in the Registry of Ships: 
a. 
b. 
C. 
d. 
e. 
f. 
g. 
11. 
i. 
j. 
k. 
Name of vessel; 
Keel number; 
Hull material: 
Principal dimensions; 
Gross tonnage; 
Net tonnage; 
IMO number; 
Official number; 
Place of build; 
Year of build; 
Name and address of registered owner, ship operator, bareboat charterer, 
manager or other person responsible for the ship; 
1. 
Date of issuance of certificate of Philippine registry; 
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in. 
Class of vessel; 
11. 
In the case of second l~and tonnage, the following additional data shzll likewise be 
A reference that encumbraiices on the vessel appear in the primary registry. 
listed in the Registry of Ships: 
a. 
Place of previous registry; 
b. 
Name of previous owner. 
In the case of bareboat chartered vessels, the following additional data shall also be 
listed in the Registry of Ships: 
a. 
Place of primary registry; 
b. 
Name of registered owner appearing in the primary registry; 
Name of the vessel as it appears in the primary registry; 
A reference that encumbrances on the vessel appear in the primary registry. 
c. 
d. 
Any material change of condition with respect to any of the preceding items and any 
other fact required by regulation shall likewise be recorded in the Registry of Ships. 
SEC. 19. 
Proceedings Prior to the Grant ofa Certificate ofPhiIippine Registry. -No 
application for a Certificate of Philippine Registry shall be approved and issued until: 
An inspection ofthe vessel and its documents has been conducted; and 
a. 
b. 
It is verified that the applicant meets the ownership requirements prescribed 
by this Act. 
The Maritime Industry Authority o n  its own or through the agency of the Philippine 
Coast Guard, may conduct the inspection and investigation at any time in order to ascertain 
whether the vessel is entitled to have, or to retain, the certificate of Philippine registry. 
Further inquiries may be made through a formal administrative investigation of the 
vessel's owner, operator, charterer, manager, master, crew or passengers to determine the 
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ownership or title and the intention to engage in legitimate trade of any vessel seeking a 
certificate of Philippine registry. 
SEC. 20. Issuance ofthe Certificate ofPhilippine Registq. -Upon the application for 
registration and a satisfactory determination of eligibiliiy, a certificate of Philippine regisrry 
shall be issued to all vessels which are more than fifteen (15) gross tons. A certificate of 
Pliilippine registiy shall be valid for a period of no more than three (3) years, renewable for a 
similar period or periods provided the vessel continues to meet all the requirements to be 
eligible for registration. 
In the case of bareboat c1m:tered vessels, the certificate of Philippine registry shall be 
valid for a period of no more than three (3) years or the period of the bareboat charter, 
whichever is shorter. 
SEC. 21. Registration of Vessels between Three and fifieen Gross Tons. - A vessel 
between three (3) gross tons and fifteen (15) gross tons shall be registered with the Maritime 
Industry Authority and a certificate of ownership shall be issued to it. The application for 
the issuance of a certificate of Philippine registry shall be optional with the owner of such 
vessel. 
SEC. 22. Registration of Vessels of Three Gross Tons or Less. - A vessel of three (3) 
gross tons or less shall not be registered, unless requested by its owner. Neither shall a 
document of registration of any kind be required for such vessel. The application for the 
issuance of a certificate of ownership shall be optional with the owner of such vessel. 
SEC. 23. Provisional Registration of Vessels. - A provisional certificate of Philippine 
registry may be issued to ships applying for registration provided all documents listed in 
section 16 have been submitted and the submission of the additional documents required in 
section 17 is Dendine. 
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The provisional certificate of Philippine registry shall be valid for a period of ninety 
(90) days subject to a single renewal of another ninety (90) days. 
If the ship owner or bareboat charterer fails to submit all required documents within 
the stipulated period, the provisional certificate of Philippine registry shall automatically 
expire on the date appearing on the provisional certificate. 
SEC. 24. Appointment of Consular OBcials for the Provisional Registration ofships. - 
If the ship is outside Philippine territory, the application for registration and its supporting 
documents enumerated in sections 16 and 17 may be submitted to the nearest Philippine 
consular office which shall then have the duty to foiward the documents to the offices of the 
Maritime Industry Authority in the port of Manila, 
The Philippine consular officer, upon the ship owner's or bareboat charterer's 
submission of all documents enumerated in section 16 may, at the direction of the Maritime 
Industry Authority, issue a provisional certificate of registry to the vessel. 
SEC. 25. Form and Contents of Certificate ofPhilippine Registly. -The certificate of 
Philippine registry shall contain the following information: 
a. 
b. 
C. 
d. 
e. 
f. 
g. 
11. 
1. 
j. 
Name of the vessel; 
Name and address of the registered owner or charterer; 
Iceel number; 
Hull material; 
Principal dimensions; 
Gross tonnage; 
Net tonnage; 
IMO number; 
Official number; 
Year of build; 


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k. 
Date of issuance of certificate of Philippine registry; 
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List of registered encumbrances. 
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Such other information as may be determined by regulation niay lilcewise be set forth 
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in the certificate of Philippine ]-egistry. 
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The certificate of Philippine registry issued to every ship which is bareboat chartered 
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in shall, in addition, contain the following information: 
a. The fact that the ship is covered by a bareboat charter and the date of such 
charter; 
b. The name of the ship as it appears in its primary registry, if such name has been 
changed upon entry in the Philippine registry; 
c. The name of the registered owner or owners as it appears in the primary registry; 
d. A reference that registered encumbrances appear in the primary registry. 
Chapter 2 
Vessels Under Construction 
SEC. 26. Registration of Vessels Under Construction. - Vessels under construction 
contracted by a Philippine national may be registered in accordance with the provisions of 
this Act. In order that the vessel may be the subject of registration under this Act, it is 
necessary that the Iceel of the vessel must have been laid and a keel number assigned by the 
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shipyard at the time of application. 
SEC. 27. Documenrs Required for the Regisrrarion of Vessels Under Construction. - 
Every ship owner wishing to enroll a vessel under construction in the Registry shall be 
required to submit the following documents: 
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a. A written application for registration; 
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b. A notarized copy of the declaration of ownership; 
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c. A certified cop; UP the Certificate of Sole Proprietorship, or Articles of 
Part1iership, or Articles of Incorporation of the ship owner or operator, as the case may be; 
d. The power of attor.ney, partnershi12 resolution or secretaiy’s certificate authorizirig 
enroll men^ of the ship in L I ~ K  Kegistry; and 
e. A notarized copy of thc shipbuilding contract. 
SEC. 28. Document of Reg.istrarion. - A provisional certificate of registration shall be 
issued to a vessel under constructio :I and shall be valid for the period during which the vessel 
is under construction. 
SEC. 29. Form and Contents (of the Document of Registration. - 
The provisional 
certificate of registration issued to c ship under construction shall contain the following 
information: 
a. Name of the vessel; 
b. Name and address of the regisrered owner; 
c. Keel number; 
d. Hull material; 
e. Principal dimensions of the vessel; and 
f. A list of registered encumbrances. 
Chapter 3 
Rights and Privileges Granted to 
Vessels of Philippine Registry 
SEC. 30. PriviJeges Confirred bya Certificate ofPJiihppine Registq. - A  certificate of 
Philippine registry confers upon the vessel the following rights and privileges: 
a. The privilege to fly the flag of the Philippines; 
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b. The privilege to engage, consistently with law, in Philippine coastwise trade in 
accordance with the corollary permits, certificates and licenses that may be issued to the 
vessel; 
c. TIIF right to invoke the diplomatic and naval protection of Philippine authorities 
and the prolection of the flag of the Philippines; and 
d. The right to invoke the exercise of jurisdiction and control by Philippine 
government authorities over all persons found on board the vessel, or over any incident 
involving the penal or disciplinary responsibility of the master or any member of the crew 
whether the same arises from a crime or quasi-delict committed on board the vessel or from 
ally collision or other incident of navigation concerning the ship. 
Chapter 4 
Registration Fees; and Tonnage Taxes 
SEC. 31. Processing fee. -- A processing fee shall be paid by the applicant when the 
application [or registration is filed. 
The processing fee shall be collected to cover 
administrative costs for handling and prwessing the application. The processing fee shall be 
in such amount as may be determined by the Maritime Industry Authority by regulation and 
approved by the Secretary of the Department cf Transportation and Communications. 
SEC. 32. Registration fee. - A registration fee shall be payable by the ship owner or 
bareboat charterer when the ship is first entered in the Registry and shall be paid when the 
Certificate of Philippine Registry is issued. 
The registration fee shall be computed on the basis of the tonnage of the vessel and 
shall be in such amount as may be determined by regulation issued by the Maritime Industry 
Authority and approved by the Secretary of the Department of Transportation and 
Communications. 
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The registration fee shall be payable by the ship owner or charterer regardless of 
whether the ship is owned or bareboat chartered, or if the ship will be used commercially, or 
for fishing, or for recreation. 
The registration fee shall be reviewed Froin time to time and, when deemed 
appropriate, the Maritime Industry Authority shall submit a recommendation to the 
Secretary of the Department of Transportation and Communications to adjust the same. Any 
adjustment in the registration fee shall be subject to the prior approval of the Secretary of the 
Department of Transportation and Communications. 
SEC. 33. Annual Tonnage Taxes for Seagoing Vessels. - A tonnage tax shall be 
imposed and shall be payable annually by every ship owner or bareboat charterer, for every 
Philippine flag vessel it owns or charters commencing the year after the entry of such ship in 
rlie Registiy. The tonnage tax shall be payable no later than January 31 of each year and 
shall be assessed in accordance with the following schedule: 
Tonnage 
Tonnage Tax 
500 gross tons or less 
Over 500 gross tons 
P1,500.00 
Plus P20.00 per ton 
The tonnage tax paid shall be in lieu of any income tax due from the ship owner or bareboat 
charterer and the withholding tax due on the lease or bareboat charter fees earned by the 
non-resident ship owner. 
SEC. 34. Exemption from Duties and Taxes. - The importation by a ship owner or 
bareboat charterer of a vessel, and the spare parts and equipment needed for the repair and 
maintenance of such vessel shall be exempt from the payment of: 
a. 
b. 
Value added taxes. 
Import duties and taxes; and 
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SJX. 35. Rmewal of the Certificate of Phihippine Registzy, - Only a processing fee 
sllall be paid by any ship owner or operator wishing to renew a Certificate of Philippine 
Registry. The processing fee paid for the renewal of the Certificate of Philippine Registry 
sllall be in addition to the payment of the annual toimage tax clue for the year the renewal of 
registration is made. 
Chapter 5 
De-registration or Suspension of Registration 
of Philippine flag vessels 
SEC. 36. Sale, Bareboat Charter or other Transfer o.fPhiIippine Flag Vessels. - A ship 
owner may freely sell, transfer, bareboat charter out or otheiwise dispose of a vessel 
registered in his name. 
SK 37. Deletion from the Registy of Ships of the Philippines. - A ship shall be 
deleted from the Registry of Ships for any of the following reasons: 
a. 
Jf it is transferred to a natural or juridical person who does not meet the 
ownership requirements imposed by this Act; or 
b. 
c. 
If it commits any act inimical to the security or interests of the Philippines; or 
Ifit is entered in a foreign registry without the prior approval of the Maritime 
Industry Authority; or 
d. 
If its bareboat charter party is not extended or renewed; or 
If it is sold for scrap; or 
e.' 
f. 
Ifit is lost. 
If the vessel is sold, transferred or disposed of, the ship owner or operator shall be 
required to submit the following documents to effect the deletion of the ship's registration: 
a. 
A written request to delete the ship's registration; 
b. 
A notarized copy of the bill of sale; 
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c. 
d. 
The original certificate of registry; 
The original radio station license; and 
A certification from the appropriate agency showing that all outstanding taxes, 
e. 
fees and charges due to the government have been paid. 
If the bareboat charter is not extended or renewed, the documents listed in the 
ilnmediately preceding paragraph shall likewise be submitted by the bareboat charterer, 
however, in lieu of the notarized copy of the bill of sale, a statement from the charterer shall 
be submitted saying that the bareboat charter has been terminated or that it has expired and 
the same has not been renewed. 
If the vessel has been lost, the ship owner, in lieu of the notarized copy of the bill of 
sale, shall be required to submit a copy of the report of the incident which has resulted in the 
loss of the vessel issued by the Philippine Coast Guard. 
SEC. 38. De-registration of a §Ii@ 
which is Subject ofa Mortgage. - No ship shall be 
deleted from the Registry unless: 
a. 
b. 
obtained. 
All mortgages are discharged; or 
The written consent of all mortgagees to the deletion from the Registry is 
If the de-registration of the vessel is obligatory in accordance with the preceding 
section, all holders of registered mortgages shall be notified by the Maritime Industry 
Authority of the pending de-registration in order to enable such holders to take appropriate 
action to protect lheir respective interests. If the consent of the holders is not obtained, de- 
registration shall not be implemented earlier than three (3) months after notice to such 
holders of registered mortgages is given. 
SEC. 39. Suspension of a Ship’s Registy. - The registration of a vessel which has been 
bareboat chartered out to a non-Philippine national shall be suspended for the duration of 
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Lhe bareboat charter. However, a ship which has been bareboat chartered out to a non: 
Philippine national shall continue to be subject to Philippine law for all transactions 
affecting the sale, transfer, mortgage, encumbrclnce or other disposition of tlie vessel, the 
enforcement of any lien or claim against the vessel, or any other transaction affecting the 
private rights of the owner ofthe vessel. 
SBC. 40. Documents Required in Order to Suspend Registratio,n. - The ship owner 
shall be required to submit the following documents to effect the suspension of such 
registration: 
a. 
b. 
A written request to suspend die ship's registration; 
A notarized copy of the bareboat charter; 
The original certificate of registry; 
The original radio station license; and 
A certification from the appropriate agency showing that all outstanding taxes, 
c. 
d. 
e. 
fees and charges duc to the government have been paid. 
Chapter 6 
Operation of Vessels 
SEC. 41. Ship Constmction. 
Every new building registered under Philippine laws 
shall be constructed in accordance with standards for ship construction set forth in 
internatioiial maritime conventions and implemented through government regulations. 
Ship consu-uction shall be under the supervision of the Philippine Coast Guard or a 
classirication society appointed by the ship owner. The classification society shall oversee 
the construction of the ship and ensure chat the construction regulations provided in 
international maritime conventions and those issued by the Philippine Coast Guard covering 
the structural strength and integrity of all parts of the ship's hull and its appendages as well 
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as the safety and reliability ofthe main propulsion, steering systems and auxiliary systems of 
the ship are followed. 
SEC. 42. Navigation and Communicdon Equipment. - Every Philippine flag vessel 
shall 11ave on board such navigation and communication equipment and apparatus required 
by international maritime convention for the safe navigation of ships. Every equipment and 
apparatus that shall be required to be installed on board shall be suited for the type, tonnage, 
power, means of propulsion and trading limitations of the particular ship. 
SSC. 43. Equipment to PreventMarine Pollution. - Every Phiiippine flag vessel shall 
have on board equipment and apparatus to prevent, reduce, or control pollution to die 
marine environment emanating from ships. Every equipment and apparatus required to be 
installed on board shall be suited for the type, tonnage, power, means of propulsion and 
trading limitations of the particular ship. 
SIX. 44. Inspections and Surveys. - To ensure the proper maintenance of the ship's 
hull, machinery and equipment, its through-life compliance with international conventions 
and government regulations, and its safe operation, every Philippine flag vessel shall be 
subject to periodic inspections and surveys. 
SEC. 45. Scope of Inspectbns and Surveys. - The inspections and surveys shall be 
conducted in accordance with international maritime conventions and government 
regulations, and shall include, but shall not be limited to, an inspection and survey of the 
ship's: 
a. 
Hull stmcture; 
b. 
Machinery and equipment; 
c. 
Life-saving equipment; 
d. 
Fire-fighting equipment; and 
e. 
Radio and communications installations. 


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pllilippine Coast Guard, in appointing a marine surveyor or classification society to conduct 
the inspection and survey of ships, shall inform the marine surveyor or classification society 
of the specific responsibilities and conditions of the authority delegated to it. 
Snc. 47. Issuance of Certiiicates. - The marine surveyor or classification society, 
pursuant to the functions delegated to it by the Philippine Coast Guard, shall have the 
authority to issue vessel certificates to every Philippine flag vessel and for this purpose, the 
vessel certificates issued by such marine surveyor or classification society shall be deemed to 
have met the requirements of this Act. 
Copies of the vessel certificates shall be submitted to the Philippine Coast Guard 
which shall, upon verification of compliance, issue a certificate of inspection in favor of the 
complying vessel confirming the findings of the marine surveyor or classification society. 
SEC. 48. Availability of Vessel Certificates. - The vessel certificates mentioned in the 
immediately preceding section shall be readily available on board the vessel for examination 
at all times. 
Chapter 7 
Manning Requirements 
SEC. 49. Citizenship ofcrew. - Every member of the crew of a coastwise or seagoing 
vessel shall be a citizen ofthe Philippines. 
An exemption from this requirement may be obtained from the Philippine Coast 
Guard upon written application from the ship owner or operator and proof that no 
Philippine citizen is qualified for the position or is willing to serve on board the vessel, This 
exemption shall not be granted to ships engaged purely in coastwise trade. 
SEC. 50. Crew Competence. - Every member of the crew of a Philippine flag vessel 
shall possess the appropriate certificate of competency setting forth his competence to serve 
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in the capacity and perform the €unctions involved at the level of responsibility, for the 
position held, for the type, tonnage, power, means of propulsion, and trading limitations of 
the ship concerned. 
The certificate of competency, as well as any endorsements thereto and any renewals 
thereof, shall be issued by the Professional Regulations Commission. The certificate of 
compelency shall attest to the fact that the seafarer to whom it is issued meets the 
requirements for service, age, medical fitness training, qualification, and examinations for the 
position held. 
Chapter 8 
Insurance and Other Indemnity Cover 
SEC. 51. Insurance and Indemnity Cover. - Every ship owner or bareboat charterer 
shall be required to maintain ad.equate insurance coverage or protection and indemnity 
coverage to meet the financial responsibility for any liability which such ship owner or 
bareboat charterer may incur for loss of or injury to human life and/or damage to 
environment. 
Chapter 9 
Enforcement 
SBC. 52. Report of any Incident Involving a Philippine Registered Shp. - When any 
Philippine flag vessel sustains an accident or causes any incident involving the loss of life, 
material loss of property, or serious injury to any person, or receives any damage affecting 
her seaworthiness or her efficiency, or if it should cause any pollution or damage to t,he 
marine environment, regardless of where such accident or incident may occur, the ship 
owner, ship operator, bareboat charterer, ship manager, agent or master of such vessel shall 
immediately, after the occurrence of the accident or incident, send a report of the accident or 
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incident to the Philippine Coast Guard detachment nearest the place of the accident or 
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illcidellt or, in the case of seagoing vessels, to the Philippine Coast Guard Headquarters in the 
port of Manila, stating: 
a. 
The mine of the vessel; 
b. 
The port Lo which the vessel belongs; 
c. 
d. 
The place where the incident occurred; 
The nature and probable cause of the incident; 
The number and names of those who perished; and 
The estimated amount of loss or damage to the vessel, the cargo or the marine 
e. 
f. 
environment. 
The ship owner, ship operator, charterer, ship manager, ageilt or master may be 
required to furnish such other information as shall be called for. 
SEC. 53. hm-tigation ofthe Accident or.Zncident. - Immediately upon receipt of the 
report, the Philippine Coast Guard shall convene the Board of Marine Inquiry so that an 
investigation into the accident or incident can be conducted. The investigation of the 
accident or incident shall follow the rules of procedure of the Board of Marine Inquiry. 
SEC. 54. Investigation Report. - Upon completion of the investigation, the Board of 
Marine Inquiry shall prepare an investigation report setting forth the findings of fact 
gathered from the investigation and recommend the filing of appropriate administrative, civil 
or criminal charges against the offender. 
If it should be dctermiiied by the Board of Marine Iiiquiry that the offender is a now 
Philippine national, it may request, through proper diplomatic channels, the assistance of 
any other State to clarify the circumstances surrounding the accident or incident so that 
corresponding charges may be brought against the offender. 
SEC. 55. Filing of Charges. - Upon completion of the investigation and the 
preparation of the report, the Board of Marine Inquiry shall take steps to initiate 
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administrative, civil or criminal action, as may be proper in the circumstances, against the 
offending parties; Provided, That should the investigation and report indicate that there are 
government officials who had been negligent in the performance of their fimctions, the 
Board of Marine Inquiry shall immediately transmit its findings to the Office of the 
Ombudsman for proper action. 
Title 111 
Ship Mortgages 
Chapter 1 
Creation of the Ship Mortgage 
SEC. 56, Application. - The provisions of this Title shall be applicable to: 
a. 
b. 
Vessels entered in the Registry; 
Vessels under construction that are provisionally entered in the Registry; 
Mortgaged vessels belonging to a foreign flag whose mortgage is sought to be 
c. 
enforced under Philippine law. 
SEC. 57. Requisites for a Valid Mortgage Constituted under Philippine Law. - The 
following requisites are essential for a ship mortgage to be validly created under Philippine 
law: 
a. 
It is executed to secure the fulfillment of a valid principal obligation; 
b. 
The mortgagor is the registered owner of the vessel to be mortgaged; 
The vessel sought to be mortgaged is registered under Philippine law; 
The mortgagor has free disposal of the ship being mortgaged, or is legally 
c. 
d. 
authorized for the purpose. 
A mortgagor may execute a ship mortgage in order to secure the fulfillment of the 
principal obligation of another. 
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SEC. 58. Subject Matter ofa Mortgage. - The following property may be the subject 
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a. 
A vessel entered in tlie Registry; and 
matter of a ship mortgage under Philippine l.aw: 
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b. 
A vessel under curistruction provisionally entered in the Registry. 
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Subject to tlie terms of the contract, a mortgage of a vessel shall include all property 
of the mortgagor which is appropriated to the vessel and on board at the time the ship 
mortgage contract is entered into, or that which is later substituted for such property, 
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In the case of a mortgage with respect to a vessel under construction, the mortgage 
shall include all materials, machinery and equipment which the mortgagor has provided and 
are within the premises ofthe shipbuilder’s yard and are distinctly identified in the mortgage 
contract as intended LO be incorporated into the ship under construction. 
Chapter 2 
Formal Validity 
SEC. 59. Formal Validity of Ship Mortgages. - A ship mortgage created under 
Philippine law shall not be valid and enforceable except as between the parties to the 
contract unless: 
a. It is executed in a public instrument; 
b. It is recorded in the office of the Maritime Industry Authority where the vessel is 
registered; and 
c. The mortgage is annotated on the certificate of Philippine registry of the vessel. 
SEC. 60. Registration of Mortgages. - Every ship mortgage created under Philippine 
law shall be registered with, and tlie application for registration of the ship mortgage shall be 
submitted to, the Maritime Industry Authority together with: 
a. A notarized copy or authenticated copy of the mortgage contract showing: 
(i) 
The name and description of the vessel being mortgaged; 
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(ii) 
(iii) 
(iv) 
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The name, and place of residence of the owner of the vessel; 
The name of the priiicipal obligor whose obligation is being secured; 
The name and address of the mortgagee; 
The date of the mortgage contract; 
The amount secured by the mortgage or the maximum amount for which the 
mortgage is constituted; and 
The maturity date of the principal obligation. 
(vii) 
b. The power of attorney, partnership resolution or board resolution authorizing the 
execution and registration of the mortgage; and 
c. 
The certificate of Philippine registry or the provisional certificate of 
Philippine registry of the vessel. 
The Maritime Industry Authority may require the submission of such other 
documents needed to support the application for registration. 
If the ship is outside Philippine territory, the application for the registration of the 
mortgage and its supporting documents may he submitted by the ship owner to the nearest 
Philippine consular office which shall then have the duty to forward the documents to the 
offices ofthe Maritime Industry Authority in the port of Manila. 
SEC. 61. Annotarion of Mortgages. - Upon receipt of the application for the 
registration of the mortgage together with all supporting documents, the Maritime Industry 
Authority shall enter the mortgage in the Registry and annotate the same on the vessel’s 
certificate of Philippine registry or provisional certificate of Philippine registry. 
If the ship is ourside Philippine territoiy, the Philippine consular officer concerned, 
upon the direction of the Maritime Industry Authority, shall cause the annotation of the 
mortgage on the vessel’s certificate of Philippine registiy or provisional certificate of registry, 
as h e  case may be. 
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SEC. 62. Posting of the Notice of Mortgage. - Upon entry of the mortgage in the 
llegistry, the Maritime Industry Authority shall issue to the mortgagor two (2) official copies 
of the notices evidencing the entry of the mortgage in the Registry, The mortgagor, upon 
of the copies of the notices shall take steps LO exhibit one (I) oiricial copy of tlie 
llotice in a prominent place on board the ship together with an authenticated copy of the 
certificate of Philippine registry. 
Failure to exhibit the notice as required in this section shall not affect the validity of 
the mortgage but the Maritime Industry Authority shall penalize the mortgagor for its 
omission. 
Chapter 3 
Ranking of Mortgages 
SEC. 63. Ranking of Mortgages. - The ranking of mortgages as between themselves 
shall be determined by the order in time in which the successive mortgages are entered in 
the Registry. A mortgage registered prior in time shall have preference over those registered 
later in time. 
Chapter 4 
Release of Mortgages 
SEC. 64. Extinguishment of Mortgages. - The mortgage shall be extinguished through 
any of the following reasons: 
a. Fulfillment or other discharge of the principal obligation; 
b. Loss or destruction of the ship mortgaged; 
c. Deletion of the vessel from tlie Registry; 
d. Enforcement of the mortgage through the judicial or extra-judicial sale of the 
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e. Other causes that may give rise to the extinction of either the principal or the 
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mortgage obligation. 
SBC. 65. Enforcement of the Mortgage through the Sale or Foreclosure of the Vessel. 
- A niovtgagee shall be enLitlec1 to foreclose the ship mortgage if: 
a. 
b. 
The principal obligor has fdiled to fully discharge its obligation; 
The mortgagor or any person in possession of the vessel has substantially 
prejudiced the security; 
c. 
The mortgagor is in material breach of its obligations under the mortgage 
contract and, by the terms of such contract, the mortgagee would be entitled to foreclose 011 
the security. 
SEC. 66. Sale of Mortgaged Vessels a t  Public Auction. - A vessel subject of a mortgage 
which is entered in the Registry may be sold extra-judicially through a public auction in 
accordance with the provisions of the Chattel Mortgage Law, Act No. 1508 as amended, 
provided that: 
a. 
b. 
The mortgagor is a Philippine national; 
Philippine law is made applicable to the mortgage; and 
The mortgage is sought to be enforced in accordance with Philippine law. 
c. 
Upon the vessel’s sale at public auction and a record of such sale is entered in the 
Registry of Ships, the mortgagee shall immediately be entitled to take actual or constructive 
possession of [.he vessel. 
The right to proceed against the vessel extra-judicially provided in this section does 
not preclude the mortgagee from proceeding against Lhe ship directly through a judicial 
attachment leading to a sale at public auction in accordance with the provisions set forth iii 
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SEC. 67. Sale of Mortgaged Vessels through Judicial Proceedings. - Any mortgage 
collstituted under Philippine law or under any foreign law covering any vessel found within 
the territory of the Philippines regardless of registry, which is not covered by the provisions 
of the iiniiiediately preceding section, shall be rnCorced only by proceeding against the ship 
directly through a n  arrest by judicial attachment leading to a sale at public auction filed with 
the court of appropriate jurisdiction in any port of the Philippines where the vessel may be 
found. Judicial proceedings and the service of process shall be in accordance with the 
procedure set forth in the Rules of Court. 
Upon issuance of the order of arrest against the vessel, the mortgagee shall 
immediately be entitled to take actual or constructive possession of the vessel. 
This provision shall be applicable to all vessels found within the territorial 
jurisdiction of the Philippines regardless of its registry, the nationality of the mortgagor, 
mortgagee or principal obligor, and the law under which the mortgage contract has been 
created. 
SIX. 68. Effect ofsale. - The enforcement of a mortgage through the sale of the vessel 
whether judicially or extra-judicially shall release the mortgage and cause the transfer of 
ownership of the vessel from the mortgagor to the purchaser of the vessel at foreclosure, 
If the.vesse1 sold is entered in the Registry and the purchaser is not qualified to 
maintain the vessel’s registration, the Maritime Industry Authority shall cause the deletion of 
such registration and require the purchaser to transfer the vessel’s registration to another 
registry. 
SEC. 69. Coliection of the Deficiency or Return of the Excess. - If the value of the 
secured obligation exceeds the foreclosure price of the vessel, the mortgagee shall be entitled 
to collect the deficiency from the principal obligor by filing an action in a court of 
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If the foreclosure price of the vessel exceeds the value of the secured obligation, the 
lnortgagee shall hold the excess in tmst for the mortgagor and shall return the same to the 
mortgagor. 
An appraisal of the vessel by a clualiGed marine apprajser shall be conducted by the 
lnortgagee prior LO the extra-judicial foreclosure of the vessel. The appraisal made shall be 
the basis for determining the foreclosure price of the vessel. 
SEC. 70. Distribution ofthe Proceeds of the Sale ofa Mortgaged Vessel. -- Proceeds of 
the sale of a mortgaged vessel whether sold extra-judicially in accordance with section 66 oi- 
judicially in accordance with section 67 shall be distributed to first satisfy the maritime 
clai~ns listed in sections 72, 74 and 76 of this Act before the satjsfaction of any obligation 
arising from any registered mortgage. 
Title IV 
Maritime Claims and Liens 
Chapter I 
Maritime Claims and the Creation of Liens 
SEC. 71. Application. - The provisions of this Title shall apply to all Philippine flag 
vessels or foreign flag vessels against which a maritime claim shall be enforced. 
SBC. 72. CreaFion ofMaritime Liens. - Each of the following claims against the ship 
owner, bareboat charterer, manager or operator of a vessel shall be secured by a maritime 
lien against the vessel: 
a. 
Claims for wages and other sums due to the Master, officers and other 
members of rhe vessel’s complement in respect of their employment on the vessel including 
the cost of repatriation and social insurance contributions payable on their behalF; 
b. 
Claims for loss of life or personal injury occurring whether on land or on 
water in direct connection with the ooeration of the vessel. 
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c. 
Claims for reward for the salvage of the vessel; 
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d. 
Claims for port, canal, and other waterway dues, and pilotage dues; 
Claims based on tort arising out of physical loss or damage caused by the 
operation of he vessel other than loss of or damage to cargo, containers, and passengel-s 
e. 
efrccts carried on the vessel. 
Chapter 2 
Priority of Liens 
SEC. 73. Prioriry ofMaritime Liens. - Maritime liens set forth in section 72 shall have 
prioi-ity over all registered mortgages and no other claim shall take priority over such 
inaritiine liens or registered mortgages except the following: 
a,' Judicial costs and expenses arising out of the arrest and subsequent judicial sale of 
the vessel, including the costs for the upkeep of the vessel and the crew, their wages, cost of 
repatriation and social insurance contributions payable on their behalf incurred during the 
period of arrest or attachment; 
b. The cost of removal incurred by the Coverninelit in the interest of safe navigation 
or the protection of the marine environment when the judicial sale pertains to a stranded or 
sunlien vessel. 
SEC. 74. Shipbuilder's or Ship Repairer's Right oflietention. - A shipbuilder or ship 
repairer shall have the right to retain a vessel until it obtains full satisfaction of all obligations 
due to it. 
This right of retention shall be extinguished when the vessel ceases to be in the 
possession of the shipbuilder or ship repairer. 
The right of retention shall not be extinguished if: 
a. 
An order has been issued for the arrest or seizure of, and the same has beell 
served on, such vessel: 
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b. 
The surrender of possession is required pursuant to the provisions of the next 
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succeeding section. 
SEC. 75. Sale of Vessel which is Subject to a Shipbuilder? or Sh@ Repairer’s Kght of 
Retencjon. - If a shipbuilder or ship repairer is in the possession of the vessel at the time of 
its judicial sale, the shipbuilder or ship repairer shall be required to surrender the vessel to 
the purchaser at public auction. The shipbuilder or repairer shall, however, enjoy a 
preference and be entitled to the settlement of its claim after the satisfaction of all claims 
listed in Sections 72 and 73. 
SEC. 76. Other Rule,? Affecting the Prioriv of Maritime Liens. - The provisions of 
section 73 setting forth the priority of maritime liens shall be subject to the following 
additional rules: 
a. Maritime liens securing a claim for reward for the salvage of a vessel shall take 
priority over all other maritime liens provided in section 72 where such maritime liens have 
arisen and attached to the vessel prior in time to the salvage operations performed; 
b. Maritime liens securing claims for reward for the most recent salvage of the vessel 
shall rank take priority among other salvage operations that occurred on earlier dates; 
c. Maritime claims for reward for the salvage of the vessel shall be deemed to have 
accrued on the date when each salvage operation was terminated; 
d. Maritime liens set forth in subsections (a), (b), (d) and (e) of section 72 shall rank 
equally as amongst themselves. 
e. The action in personam against the ship owner, ship operator, bareboat charterer 
or ship manager for the satisfaction OE the maritime claim shall survive if the proceeds of the 
sale are insufficient to satisfy all claims. 
SSC. 77. Effect ofAny Voluntary Sale or Transfr of Ownership of the Vessel. - The 
voluntary sale or transfer of a ship which is subject to a maritiine lien shall not extinguish the 
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maritilne lien. 
ownership, registry, or flag. 
Maritime liens shall follow the ship, notwithstanding any change of 
Chapter 3 
Extinguishment of Liens 
SEC. 78. Extinguishment of Mxitiae Liens. - Maritime liens shall be extinguished 
after one year unless the vessel to which it attaches has been subject to an arrest which leads 
to its judicial sale. 
The one-year period shall be counted as follows: 
a. 
In the case of crew wages, from the time of the claimant’s discharge from the 
vessel; 
b. 
In the case of other maritime liens, from the time when the claims arise. 
The one-year period shall not be subject to suspension or interruption except when 
the arrest or attachment of the vessel is not permitted by law. 
SEC. 79. Assignment of or Subrogation to a Maritime Claim. - The assignment of a 
maritime claim by a claimant, or the subrogation of a third party to the rights of a claimant 
to a maritime claim, shall entail the simultaneous assignment of, or subrogation to, the 
maritime lien securing such claim. However, any claimant holding a maritime lien may not 
be subrogated to compensation payable to the owner of a vessel arising from an insurance 
contract. 
Chapter 4 
Enforcement of Liens 
SEC. 80. Enforcement ofMaritime Liens. - The maritime liens provided in section 72 
which attach to any vessel found within the territory of the Philippines shall be enforced by 
proceeding against the ship directly through a judicial action leading to a sale at public 
auction filed with the court of appropriate jurisdiction in any port of the Philippines where 
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the vessel may be found. 
accordance with the procedure set forth in the Rules of Court. 
Judicial proceedings and the service of process shall be in 
This provision shall be applicable to all vessels found within the territorial 
jurisdictioli of the Philippines regardless of its registv, the nationaiit). of the claimant and 
the law under which the maritime lien has been created. 
SEC. 81. Effect of the judicial Sale of a Vessel. -Any judicial sale of the vessel shall 
extinguish all maritime liens and encumbrances attaching to the vessel as well as all 
registered mortgages; Provided, that the vessel is within the territorial jurisdiction of the 
Philippines at the time ofthe judicial sale and the sale has been made in accordance with the 
provisions of this Act. 
SEC. 82. Disposition of the Proceeds ofthe Sale oythe Vessel Subject to a Maritime 
Lien. - The proceeds of the judicial sale of a vessel shall be distributed to first satisfy the 
liens listed in Sections 72, 73 and 75 of this Act before the satisfaction of any obligation 
arising from any registered mortgage created in accordance with Section 59, or any maritime 
claim provided in Section 87 hereof. 
Any amount left over from the proceeds of sale of the vessel shall be held in trust for 
the ship owner, ship operator, bareboat charterer, or ship manager. 
SEC. 83. Rights of a Purchaser at Judicial Sale. - The purchaser at the judicial sale of 
the vessel shall have the right to request the officer of the court conducting the sale io issue a 
certificate to the effect that the vessel is sold free from all registered mortgages, or charges, 
except those assumed by the purchasers, and all other liens and encumbrances that may have 
attached to the vessel as of the date ofthe judicial sale. 
The Maritime Industry Authority, with respect to Philippine flag vessels, shall be 
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a. 
Delete all registered mortgages and charges on the basis of the certificate 
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Issue a new certificate of registration LO the purchaser or to de-register the 
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vessel for purposes of new registration in another State. 
If the vessel belongs to a foreign registly, the officer of the court conducting the sale 
of the vessel shall issue the certificate stipulated in the first paragraph of this section in such 
form and substance as may be required by the foreign registry to: 
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a. 
b. 
Delete all registered mortgages in that registry; and 
Issue a new certificate of registration to the purchaser or to de-register the 
vessel for purposes of a new registration in another State. 
Title V 
Arrest of Vessels 
Chapter 1 
General Provisions 
SEC. 84. Application. - The provisions of this Chapter shall apply to all Philippine 
flag vessels and to foreign flag vessels found within the territory of the Philippines, for which 
an order of arrest has been issued by a Philippine court. 
SEC. 85. Exceptions. - The provisions of this Chapter shall not prejudice the right of 
any person, whether natural or juridical, to proceed against the ship owner, ship operator, 
bareboat charterer or ship inaiiager for any of the claims set forth in section 88 of this Act 
through an action in personam. 
SEC. 86. Right ro Detain a Ship. - The provisions for the arrest of ships under this 
Chapter shall not affecc the powers vested in the Philippine Coast Guard, Philippine Navy, 
Philippine Ports Authority, Bureau of Customs or other government agency to detail1 any 
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ship under any Philippine law or international convention or any regulation issued pursuant 
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to such law or international convention. 
Chapter 2 
Right of Arrest 
SEC. 87. Maritime Claims Giving Rise to the Right ofArrest. - A claimant asserting 
any of the following maritime claims may enforce his claim directly against a vessel by 
seeking its arrest through a n  attachment by judicial action and asking the cour~ of 
appropriate jurisdiction for its sale in order to secure the satisfaction of such claim: 
a. 
b. 
Loss OL damage caused by the operation of the ship; 
Loss of life or personal injury occurring whether on land or on water in direct 
connection with the operation of the ship; 
c. 
Salvage operation or any salvage agreement, including, if applicable, special 
compensation relating to salvage operations in respect of a ship which by itself or its cargo 
threatened damage to the environment; 
d. 
Damage or threat of damage caused by the ship to the environment, coastline 
or related interest; or measures taken to prevent, minimize, or remove such damage; or 
compensation for such damage; costs of reasonable measures of reinstatement of the 
environment actually undertaken or to be undertaken; loss incurred or likely to be incurred 
by third parties in connection with such damage; and damage, costs, or loss of a similar 
nature to the foregoing: 
e. 
Costs or expenses relating to the raising, removal, recovery, destruction or the 
rendering harmless of a ship which is sunk, wrecked, stranded or abandoned, including 
anything that is or has been on board such ship, and costs or expenses relating to the 
preservation of an abandoned ship and maintenance of its crew; 
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f. 
Any agreement relating to the use or hire of the ship, whether contained in a 
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charter party or otherwise; 
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Any agreement relating to the carriage of goods or passengers on board the 
ship, whether contained in a charter party or otherwise; 
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on board the ship; 
Loss of, or damage to, or in connection with goods, including luggage, carried 
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General average; 
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Towage; 
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Pilotage; 
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Goods, materials, provisions, bunkers, equipment, including containers, 
supplied or services rendered to the ship for its operation, management, preservation or 
maintenance; 
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Construction, reconstruction, repair, conversion, or equipment of the ship; 
Port, canal, dock, harbor and other waterway dues and charges; 
Wages and other sums due to the master, officers and other members of the 
ship's complement in respect of their employment on the ship, including costs of repatriation 
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and social insurance contributions payable on their behalf; 
11. 
q. 
Disbursements incurred on behalf o f  the ship or its owners; 
Insurance premiums, including mutual insurance calls, in respect of the ship, 
payable by or on behalf of the ship owner, ship operator, bareboat charterer, or ship 
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Any commissions, brokerages or agency fees payable in respect of the ship by 
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or on behalf of the ship owner, ship operator, bareboat charterer, or ship manager; 
Any dispute as to ownership or possession of the ship; 
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Any dispute between co-owners of the ship as to the employment or earnings 
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of the ship; 
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Any mortgage or charge of the same nature on the ship; and 
Any dispute arising out ofa contract for the sale of the ship. 
v. 
The procedure for the issuance of the order of arrest and the service of process upon 
the vessel, its owner, bareboat charterer, manager, operator, or any person acting on its 
behalf, shall be made in accordance with the provisions of the Rules of Court. 
The distribution of the proceeds of any judicial sale undertaken to satisfy the 
maritime claims sec forch in this section shall be made subject to the provisions of section 83, 
SEC. 88. Reason for the Arrest. - The court may order the arrest of a vessel for [he 
purpose of obtaining security for the enforcement of a niaritime claim set forth in the 
preceding section regardless of where such maritime claim may have arisen and what the 
nationality of the ship is against which the maritime claim is being enforced. 
The arrest shall be made notwithstanding the existeiice of a jurisdiction clause or 
arbitration clause in the contract giving rise to the claim providing that the maritime claim 
for which the arrest has been made is to be adjudicated or arbitrated in a State other than the 
I’liilippines, or adjudicated in accordance with the law of that State. 
SEC. 89. Exercise ofthe Right of Arrest. - The court may order the arrest of any 
Philippine flag vessel or foreign flag vessel against which a maritime claim is asserted if: 
a. 
The person who owned the ship at the time the maritime claim arose is liable 
for the claim,’ and is still the owner of the ship at the time when the arrest is effected; or 
b. 
The bareboat charterer of the ship at the time when the maritime claim arose 
is liable for the claim, and is still the bareboat charterer or owner of che ship when the arrest 
is effected; or 
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C. 
The marj time claim on the ship is based upon a mortgage or charge of a similar 
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nature; or 
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The maritime claim relates to the ownership or possession of the ship; or 
The maritime claim is made against the ship owner, ship operator, bareboat 
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charterer, or ship manager and is secured by a maritime lien under Section 72 hereof. 
SEC. YO. Arrest ofa Related Vessel -The court may also order the arrest of any other 
ship which when the arrest is effected, is found within the territory of the Philippines and is 
owned by the same person liable for the maritime claim and who, at the time the claim 
arose, was the ship owner, ship operator, bareboat charterer, or ship manager of the vessel in 
respect of which the claim has arisen. 
The arrest of a related vessel will not be allowed when the maritime claim sought to 
be enrorced relates to the ownership or possession of the ship. 
SEC. 91. Arrest o f a  VesseJthaths been Transferred to Another Parry. -The arrest of 
a ship which is not owned by the pei:son liable for the claim shall be permissible only if a 
final judgment on the maritime claim has been issued by a Philippine court and such 
judgment can be enforced against that ship through its judicial sale. 
Chapter 3 
Release from Arrest 
Ssc. 92. Release from Arrest: Posting ofa Bond or other Security. - A ship which has 
been arrested shall be released from arrest when a bond or ocher sufficient security, which 
the court has determined to be necessary for the preservation of the rights of the parties, has 
been provided by Lhe ship owner, ship operator, bareboat charterer, ship manager or any 
other person acting on its behalf. 
In cases involving any dispute between co-owners of the ship as to the employment 
or earnings of the ship, or arising from the ownership or possession of the ship, the court 
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inay in its discretion determine whether to require a bond or other security before 
2 permitting the person in possession of the ship to continue trading with the ship or to 
otherwise deal with the operation of the ship during the period of the arrest. 
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amount of the boiid or other security for the release of the ship and submit their agreement 
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to the court. 
In the absence of any agreement between the parties as to the sufficiency and form of 
the bolld or other security, the court shall determine its nature and the amount thereof. 
For purposes of determining the amount of the bond or other security, the same shall 
not exceed the amount of the claim for which the ship has been arrested, or the value of the 
ship, or the applicable limit of liability determined in accordance with Title VI, Chapter 2 of 
this Act, whichever is least. 
SEC. 94. Place of Posting of the Bond or other Security, - The bond or other security 
for the release of the vessel against which the claim is sought to be enforced shall be posted 
with the court which issues the order for the arrest of the vessel. 
SEC. 95. Release of the Bond or other Security Posted in a Phililippine Court. - If a 
ship is arrested by a foreign court for the same claim for which a bond or other security has 
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already been provided in a Philippine Court and against which its release has been obtained, 
the bond or other security so provided in the Philippine court shall, at the discretion of such 
court, be released upon application of the ship owner, ship operator, bareboat charterer or 
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ship manager. 
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SEC. 96. Release of Excess Security. - I f  a ship has been released by a Philippine 
court on tlie basis of a bond or other security posted with that court and the same ship is 
later arrested by a foreign court for the same claim and is likewise subsequently released 
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the Philippine court shall, at the court's discretion, be released to the extent that the total 
amount of the bond or other security provided in the Philippine court and that provided. in 
the foreign court combined exceeds t.he claim for \vliicli the ship has been arrested., or the 
value OF the ship, whichever is lower. 
Sxc. 97. Condition for the Release of Excess Security - The release of the bond or 
other security provided in the immediately preceding section shall not he ordered by the 
Philippine court unless it is satisfied that the bond or other security posted in the foreign 
court shall actually be available and be freely transferable to satisfy any judgment or order 
that may be issued in favor of the claimant. 
SEC. 98. Reduction, Modifhtion or Cancellation of the Bond. - If a bond or other 
security has been provided for the release of the ship, the person providing the bond or 
security may, at atiy time, apply to the court to have that security reduced, modified or 
cancelled. The court, in its discretion and upon a determination of the veracity of the claim 
filed, shall issue the appropriate order retaining, reducing, modifying or canceling such bond 
or other security. 
SEC. 99. No Presumption of Fault. - Any request for the ship to be released upon a 
bond or other security being provided, or any application to limit liability made by the ship 
owner, ship operator, bareboat charterer or ship manager shall not be construed as an 
aclcnowledgment of liability or a waiver of any defense which may he pleaded against the 
claimant or a waiver of any right to limit the liability of such ship owner, ship operator, 
bareboat charterer or ship manager in accordance with the provisions of Title VI, Chapter 2 
of this Act or of any other law or international convention. 
Chapter 4 
Re-arrest, Multiple Arrest and 
Arrest ofAdditiona1 Vessel 
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SEC. 100. Rearrest orMuJtipIe Arrest ofa Ship. - If a ship has already been arrested 
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allcl released, or a bond or other security for its release has been provided in order to secure 
the iiiaritinie claim soughr: to be enforced against that ship, the same ship shall not be re- 
arrested for the same maritime claim unless: 
a. 
The nature or amount of the bond or other security already provided is 
inadequate or insufficient or has otherwise been prejudiced; or 
b. 
The person who has already provided the security will not, or is unlikely to, be 
able to fulfill some or all of the obligations required; or 
c. 
The ship arrested or the bond or other security previously provided was 
released upon application or with the consent of the claimant acting on reasonable grounds 
and the maritime claim sought to be enforced against the ship was not subsequently satisfied; 
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The claimant could not, despite taking reasonable steps, prevent the release of 
the ship, or the bond or other security provided. 
SEC. 101. Arrest ofAddjtjonal Vessel. - Any other ship owned by the ship owner, 
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ship operator, bareboat charterer or ship inanager which would otherwise be subject to arrest 
in respect of the same maritime claim shall not be arrested unless any of the conditions 
enumerated in the immediately preceding section exists with respect to the vessel originally 
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arrested. 
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Chapter 5 
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Security Against Arbitrary Arrest 
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For purposes of this section and that of the immediately preceding section, "release" 
shall not include the unlawkl release or the escape from arrest of an arrested vessel. 
SEC. 102. Claimant's Bond. - In order to protect the rights of the ship owner, ship 
operator, bareboat charterer or ship manager from any unjustified, arbitrary, wronghl or 
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unlawful arrest of its vessel or for permitting the continued arrest of its vessel, the colurt may 
rcc!uil-k, the claimant who scelis the arrest, or who has procured the arrest, of a vessel to 
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provide a bond or other security of a kind, for an amount, and up011 such terms, as may be 
deierrnined by rhe court. 
?‘he bond 01 other security provided shall be used to cover any loss which may be 
illcurred by the ship ox’ -CT, ship operator, bareboat charterer or ship manager as a result of 
ally unjustified, arbitrary, .\-rongFul or unlawful arrest of its ship and for which the claimant 
may be found liable. Such loss or damage shali include but shall not be limited to any loss or 
damage incurred by the shiy: owner, ship operator, bareboat charterer or ship manager 
arising from such arrest, or froiri any excessive security which may have been demanded by 
the claimant, and provided for by such ship owner, ship operator, bareboat charterer or ship 
manager. 
SEC. 103. Determination ofthe.Amount of the Claimant’s Bond. - The court issuing 
the order of arrest shall have jurisdiction to determine the extent of the liability of the 
clailnant which may arise from any loss or damage caused by the arrest of the ship and the 
alnount of the bond to be required shall depend upon such determination of liability, 
If a bond or other security has been provided in accordance with this section, the 
claimant may ask at any time to have the bond or other security reduced, modified or 
cancelled upon proof of the validity of the claim. 
SEC. 104. 
Determination of Claimant> Bond Pending Proceedings in a Foreign 
Court. - If the disposition of the case on the merits for which the arrest has been effected 
lies with a foreign court or with an arbitral tribunal, the Pidippine court ordering the arrest 
of the vessel may delay the determination of the extent of the claimant’s liability which may 
arise from any loss or damage that may be occasioned to the ship owner, ship operator, 
bareboat charterer or ship manager because of the unjustified, arbitrary, wrongful or 
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tribunal. 
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Chapter 6 
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Jurisdiction 
u11lawli.d arrest of the ship pending a decision on the merits by such foreign court or arbitral 
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SEC. 105. Jurisdiction of the Phirippine Court on the Merits of the Case. - The 
Philippine court, which has ordered the arrest of a vessel or has required the provision of a 
bond or other security for the release of the ship, shall have jurisdiction to determine the 
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case on its merits. 
SEC. 106. Transfer of Venue. - The parties may appear and adjudicate the claim 
before the Philippine court exercising jurisdiction over the claim or, with leave o f  court, may 
mutually agree to submit the dispute within an agreed period of time to the jurisdiction of a 
foreign court or to an arbitral tribunal which has jurisdiction over the claim. 
Such 
agreement of the parties on the transfer of venue to a foreign court or arbitral tribunal shall 
be submitted to the Philippine court to aIlow for the suspension ofthe proceedings. 
SEC. 107. Right ofthe Court Not to Exercise Jurisdiction. - Upon receipt of the order, 
in proper forin and substance, that a foreign court or arbitral tribunal has accepted 
jurisdiction over the case, the PhiliIipine court which has issued the order for the arrest of 
the vessel, or has required the provision of a bond or other security to obtain the release of 
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the ship, may, in its discretion, suspend the exercise of jurisdiction over the claim in favor of 
the foreign court or arbitral tribunal. 
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SEC. 108. Transfer of the Case to a Foreign Corzrt or Arbitral Tribunal. - If the 
Philippine court, which has ordered the arrest of the vessel 01- has required the provision of a 
bond or other security to obtain the release of the ship, rehses to exercise jurisdiction over 
the claim in accordance with the provisions of section 106, the court shall, upon application 
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the claimant, grant a period of time within which the claimant shall bring proceedings 
before a coinpetelit foreign court or arbitral tribunal. 
If proceedings are not brought within the periocl of time stipulated in the order, the 
ship arrested or the b o d  or other security provided, ~ ~ p o n  
request of the ship owner, ship 
operator, bareboaL charterer or ship manager, shall be ordered released by the court. 
Chapter 7 
Recognition and Enforcement of Judgments 
SEC. 109. Recognition ufFureign Judgments. - If proceedings are brought before a 
foreign court of competent jurisdiction or an arbitral tribunal, any filial judgment or arbitral 
award resulting from such proceedings shall be recognized and given full force and effect by 
the Philippine court having custody of the arrested ship or the bond or other security 
provided for its release. The parties shall be required to submit to the Philippine court a 
copy of the final judgment or arbitral award in such form and substance sufficient for its 
recognition and enforcement under Philippine law. 
SEC. 110. Conditions for the Recognition of the Foreign judgment. -The recognition 
of such Einal judgment or arbitral award shall be made on the condition that the ship owner, 
ship operator, bareboat charterer or ship manager has been given reasonable notice of the 
proceedings filed with the foreign court or arbitral tribunal, has had reasonable opportunity 
to defend itself in such proceedings, and the filial judgment or arbitral award resulting from 
such proceedings is not contrary to Philippine law, morals, public order or public policy, 
No further restriction shall be imposed on the recognirion and enforcement of such 
foreign judgment or arbitral award by the Philippine court which ordered the arrest of the 
ship or for which the bond or other security has been provided to obtain its release. 
SBC. 11 1. Enforcement ofjudgrnents. - A judgment rendered in favor of the claiinant 
whether by a Philippine Court or a foreign court or arbitral tribunal shall be enforced against 
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the vessel through its judicial sale, or against the bond or other security given as security for 
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the claim. 
Title VI 
Limitation of Liability for Maritime Claims 
Chapter 1 
Right to Limit Liability 
SEC. 112. Application. - The following may invoke the right to limit their liability in 
accordance with the rules provided for in this Title for the claims set out in the next 
succeeding section: 
a. 
Ship owners; 
b. 
Ship operators; 
C. 
Bareboat charterers; 
d. 
Ship managers; 
e. 
Salvors with respect to claims set forth in subsections (d), (e) and (fl of Section 
113; 
f, 
Any person whose act, neglect or default the ship owner, ship operator, 
bareboat charrerer, ship manager or salvor is responsible for; and 
g. 
Insurers who assume the liability of any ship owner, ship operator, bareboat 
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charterer, ship manager, or salvor. 
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SEC. 113. Claims which are Subject to Limitation. - The following claims made 
against the persons set forth in the preceding section or against the ship, whatever the basis 
ofliability may be, sliall be subject to the limitation of liability: 
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(a) Claims in respect of loss of life or personal injury, or loss of or damage to property, 
including damage to harbor works, basins, waterways and aids to navigation, occurring on 
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board or in direct coniiectioii with the operation of the ship or with salvage operations and 
consequential loss resulting therefrom; 
(b) Claims in respect of loss resulting from delay in the carriage by sea of cargo, 
passengers or their luggage; 
(c) Claims in respect of other loss resulting from the infringement of rights, other 
than calmactual rights, occurring in direct connection with the operation of the ship or of 
salvage operations; 
(d) Claims in respect of loss or damage arising from the raising, removal, destruction 
.or the rendering harmless of a ship which is sunk, wrecked or abandoned, including 
anything that is ox has been on board such ship; 
(e) Claims in respect of loss or damage resulting from the removal, destruction or the 
rendering harmless of the cargo of the ship; 
(f) Claims in respect of measures taken in order to avert or minimize loss for which 
the person liable may limit his liability in accordance with this Title, and any hrther loss 
caused by such measures. 
SEC, 114. Right to Invoke Liniit ofliability. - The right to limit liability may be 
invoked by the ship owner, ship operator, bareboat charterer, ship manager or salvor, against 
any claiinant in a judicial action who has sought the arrest of its vessel in order to enforce a 
claim which is subject to limitation. 
SEC. 115. Claims Not Subject to Limitdon. - The following claims shall not be 
subject to any limitation of liability in accordance with this Title: 
(a) Claims arising from the contract of salvage or from any salvage operation rendered 
in accordance with relevant Philippine law on salvage or any applicable international salvage 
convention, iiicluding any claim Tor special coinpensation payable under a co~liract of 
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salvage, or any contribution in general average; 
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(b) Claims Cor oil pollution damage antl’or other environmental damage; 
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(c) Claims subject to any international convention governing OY prohibiting the 
limitation of liability for nuclear damage; 
(d) Claims against  he ship owner of a iiiicleai- ship for nuclear damage; 
(e) Claims brought by employees against the ship owner, ship operator, bareboat 
charterer, ship manager, or salvor, where the duties of such employees are connected with 
the ship or with the salvage operations, as the case may be, or their heirs, successors, or 
assigns, if under the law governing the contract of employment, the ship owner, ship 
oPerator, bareboat charterer, ship manager, or salvor is not entitled to limit his liability in 
respect of such claims, 01 if the law governing the contract of employment permits a iimit of 
liability greater than that provided for in this Title. 
SEC. 116. Conduct Barring Limitatkm. .- Any ship owner, ship operator, bareboat 
charterer, ship manager or salvor, or any person acting on their behalf, shall not be entitled 
to limit liability if it is proven that the loss resulted from the personal act or omission of such 
ship owner, ship operator, bareboat charterer, ship manager, or salvor, or any person acting 
on their behalf, and such act or omission was committed with the intent to cause such loss, 
or it was done negligently and with the kiiowledge that such loss would probably result. 
SEC. 117. Counterclaims; Right to Set off: - When a ship owncr, ship operator, 
bareboat charterer, ship manager, or salvor, who is entitled to limit his liability, has a 
counterclaim against the claimant arising out of the same occurrence, their respective claims 
shall be set off against each other and the limits of liability shall only apply to the balance of 
the claim, if any. The right of set off can be invoked only if both parties are entitled to limit 
their respective liabilities and their respective claims do not fall within the provisinlls of 
section 115 or 116 of this Act. 
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Chapter 2 
Limits of Liability 
SEC. 118. General Limits. - The general limits of liability for claims other than for 
passellger claims, arising froin any distinct occasion sbnll be calculated as follows: 
(a) In respect of claims for loss of life or personal injury: 
(i) 
(ii) 
2,000,000 units of account for a ship with a tonnage not exceeding 2,000 tons; 
For a ship with a tonnage in excess thereof, the following amount in addition 
to that mentioned in (i); 
For each additional ton from 2001 to 30,000 tons, 800 units of account; 
For each additional t.on from 30,001 to 70,000 tons, 600 units of account; 
For each additional ton in excess of 70,000 tons, 400 units of account 
(b) In respect of any other claims: 
(i) 
(ii) 
1,000,000 units of account for a ship with a tonnage not exceeding 2,000 tons; 
For a ship with a tonnage in excess thereof the following amount in addition 
to that mentioned in (i): 
For each additional ton from 2001 to 30,000 tons, 400 units of account; 
For each additional ton from 30,001 to 70,000 tons, 300 units of account; 
For each additional ton in excess of 70,000 tons, 200 units of account. 
The Maritime Industry Authority, with the approval of the Secretary of the 
Department of Transportation and Communication, may by regulation revise the limits of 
liability provided for in this section to align such limits with applicable international 
maritime conventions. 
SEC. 119. Claims for LOSS of Life in Excess of the Stipular-ed L*imit. - If the amount 
calculated in accordance with subsection (a) of the preceding section is insufficient to pay in 
full all the claims fur loss of life or personal injury, the amount calculated in accordance with 


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subsection (b) shall be available for the payriiriit of the unpaid balance of the claims under 
subsection (a). 
rll this case, the unpaid balance for claims for loss of life and personal injury shall 
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ratably u+th all other claims falling under subsection (b); Provided, however, That if 
there should be any claim arising from damage to harbor works, basins and waterways, and 
aids to navigation, these shall be satisfied first before any other claim falling under subsection 
(b) are satisfied, including any unsatisfied claims for loss of life or personal injury 
SEC. 120. Salvor’s Limit ofLiabiIity when Not Operatingfioni a Ship. - The limit of 
liability for any salvor who is not operating from any ship or salvage tug, or who is operating 
solely on the ship to, or in respect of, which he is rendering salvage services, shall be 
calculated in accordance with the provisions of Section 118 of this Act applying a tonnage of 
1,500 tons. 
SEC. 121. Limit of Liability f0.r Passenger Claims. - The limit of liability of a ship 
owner, ship operator, bareboat charterer, or ship manager, for passenger claims relating to 
loss of life or personal injury arising out of any distinct occasion, shall be an aiiiount 
equivalent to 175,000 units of account multiplied by the number of passengers which the 
ship is authorized to carry according to the ship’s certificate. 
Claims for loss of life or personal injury to passengers of a ship shall mean any such 
claims brought by or on behalf of: 
a. 
b. 
Any person carried on the ship under a contract of passenger carriage; or 
Any person carried on the ship who, with the consent of rhe master, is 
accompanying a vehicle, or a shipmeiir of live animals, or other cargo which is covered by a 
contract for the carriage of goods. 
SEC. 122. Formula for Converting the Unit ofAccount to Philippine Pesos. - The unit 
or account mentioned in this Chapter shall be converted LO Philippine pesos according to the 
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value of the Philippine peso 011 the date the limitation fiind is constituted, or payment is 
made, or security is given. 'The equivalent value of the Philippine peso shall be calculated in 
accordance with the method of valuation ap13lied by the International Monetary Fund for its 
operations and transactions in effect on the applicable date. 
Sec. 123. Aggregation of Claims for Loss of Life and Personal Injuy and for other 
Clajms, - The limits of liability for loss of life and personal injury and for other claims 
determined in accordance with section 118 hereof shall apply to the aggregate of all claims 
which arise 011 any distinct occasion against: 
a. The ship owner, ship operator, bareboat charterer, or ship manager and any 
person whose act, neglect or default such ship owner, ship operator, bareboat charterer or 
ship manager is responsible for; or 
b. The ship owner, ship operator. bareboat charterer, or ship manager of a ship 
rendering salvage services from a ship or the salvor or salvors operating from a salvage tug, 
and any per.soii whose act, neglect or default the ship owner, ship operator, bareboat 
charterer, ship manager or salvor is responsible for; or 
C. The salvor who is not operating from a ship or salvage tug or who is operating 
solely on the ship to, or in respect of, which the salvage services are rendered and any person 
whose act, neglect or default the salvor is responsible for. 
Chapter 3 
Limitation Fund 
SEC. 124. Creation ofa Limitation Fund. - Any person entitled to limit his liabihy in 
accordance with Section 112 and who is alleged to be liable for a claim provided in Seciiori 
113 hereof may, at any time during the hearing of the case or after the arrest of his vessel, 
coiistitute a fund with the court in which legal proceedings have been instituted for the 
satisfaction of the claim subject to limitation, 
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The fund shall be in an amount equivalent to the limits of liability set forth in 
Sections 118, 120, or 121 hereof, as the case may be, together with any interest due thereon 
fl-"ln the dare of the occurrence giving rise to the liability until the date of the creation of the 
fund. The total aiiiouiit of the fund shall be subject to the 11.11es on aggregation of claims set 
forth in Section 123 of this Act. 
Any fund created shall be available only for the payment of claims in respect of 
which limitation of liability can be invoked. 
Six. 125. Form of rhe Fund - The fund may be created, either by depositing the sum 
with a universal bank designated by the court, or by providing a bond, or other security 
acceptable to the court. 
The hiid constituted by any of the persons mentioned in Section 112, subsections (a), 
(b), (c), (d) or (e) shall likewise be deemed constituted in favor of the persons mentioned in 
subsection (f) and (g) of that section. 
SEC. 126. Distribution ofrheFund. - Subject to the provisions of Sections 118 and 119 
hereof, the limitation hiid shall be distributed among the claimants in proportion to their 
claims against the fund as determined by the court. 
SEC. 127. Subrogation of Rights. - If at any time before the fund is distributed the 
ship owner, ship operator, bareboat charterer, ship manager or salvor, or their respective 
insurers, settles a claim made against and payable by the fund, such person shall, up to the 
amount paid, acquire by subrogation the rights which the claimant would have enjoyed 
under this Title. 
SCC. 128. Contingency Fund for Expected Claim. - Where the ship owner, ship 
operator, bareboat charterer, ship manager, or salvor, or their respective insurers, establishes 
that it may be compelled to pay a claim, at a later date, whether in whole or in part, and 
because of such payment, the ship owner, ship operator, bareboat charterer, ship manager or 
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salvor, or their respective insurers, would have enjoyed a right of subrogation if the claim 
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had been paid before the hiid was distributed, the court having jurisdiction over the claiin 
alld in which the hiid has been constituted may order that a sufficient sum from the fund be 
provisionally set aside to enable the person who has been subrogated to the rights of the 
claimant to enforce his claiin against the fund at such later date. 
SEC. 129. Bar to Other Acrions. - Where a limitation fund has been constituted in 
accordance with Section 124 hereof, any person having made a claim against the fund shail 
be barred from enforcing such claim against any other assets of the persons mentioned in 
Secl;ion 112 liereof aiid on whose behalf the fund has been constituted. 
SEC. 130. Release from Arrest After the Constitutibn of the Limitation Fund. - After 
a liniitation fund has been constituted in accordance with Section 124 of this Act, any ship or 
other property, belonging to a ship owner, ship operator, bareboat charterer, ship manager or 
salvor 011 whose behalf the fund has been constituted, which has been arrested or attached in 
accordance with Title V of this Act in order to satis@ a claim which is enforceable against 
the fund or any other bond or security given, may be released from arrest at the discretion of 
the COUI-t. 
Such release shall, however, be mandatory if the limitation fund has been constituted: 
a. At the port where the occurrence took place; 
b. If the occurrence took place out of port, at the first port of call of the ship after 
such occurreiice; 
C. At the port of disembarkation in respect of claims for loss of life or personal 
injury: 
d. At the port of discharge in respect of damage to cargo; or 
e. At the port where the arrest is made. 
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The provisions of this section and of the hnnlediately preceding section shall apply 
only if iile claimant may bring a claim against the limitation fund before the court 
administering that fund and the fund is a c t d l y  available and freely transferable to the 
claimant in respect ofche claim. 
SEC. 131. Cuverage. - The provisions of this Title shall apply to all Philippine 
flagships whether seagoing or coastwise and to all foreign flagships the claims against which 
are sought to be enforced in any Phjlippine court of appropriate jurisdiction. 
Title VI1 
Final Provisions 
SIX. 132. Requisition of Vessels. -The President of the Philippines may, in times of 
war and other national emergency, when the public interest so requires, requisition, 
absolutely or temporarily, for any naval or military purpose, any and all vessels of Philippine 
registry. The Government shall pay the owner or operator of the vessel, based on normal 
conditions at the time of requisition: 
a. 
L. 
The fair market value, if the vessel is taken absolutely; or 
The fair charter value, if the vessel is taken temporarily, for the period 
commencing from the takeover by the Government to the date the vessel is returned to its 
owner or operator. 
SSC. 133. Repealing Clause -The following laws are hereby repealed: 
a. 
b. 
Customs Code”; 
C. 
Articles 573 to 585 and 719 to 736 ofthe Code of Commerce of 1888; 
Sections 801 to 821 and 829 of Republic Act No. 1937 or the “Tariff and 
Republic Act No. 913 or “An Act to Amend Section @ne of Coinmonwealth 
Act No. 606 by Defining the Term “Lease” or “Charter” and for Other Purposes” ; 
d. 
Republic Act No. 1407 or the “Philippine Overseas Shippiug Act”; 
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e. 
Republic Act No. 6106 or “An Act Amending IZepublic Act No. 1407, As 
Amended, to Prescribe thc !ides 
for Financing the Acquisition or 
Construction of Vessels to be Used for Overseas Shipping, to Allow the 
Creation of a Maritime Lien Thcreori, and For Other Purposes”; 
f. 
Presidential Decree No. 214 or an act “Further Amending the Philippine 
Overseas Shipping Act of 1955’; 
Presidential Decree No. 1521 of“The Ship Mortgage Decree of 1978”; 
g. 
The provisions of the following laws covering the powers and functions of MA.RINA 
a i d  the Philippine CoasL Guard are hereby amended insofar as they are inconsistent with 
sections 6 and 7 of this Act: 
a. 
b. 
C. 
d. 
e. 
Republic Act No. 5173, as amended of “An Act Creating a Philippine Coast 
Guard, Prescribing its Powers and Functions, Appropriating the Necessary 
Funds Therefor, and for Other Purposes”; 
Presidential Eecree No. 601 or the “Revised Coast Guard Law of 1974”; 
Presidential Decree No. 474 or the “Maritime Industry Decree of 1974”, as 
amended, 
Executive Order No. 125 or the order “Reorganizing the Ministry of 
Transportation and Cominunications, Defining its Powers and Functions and 
for Other Purpose’’ and 125-A, as amended, ~vliich amended E.O. 
No. 125; 
Section 10 of Republic Act No. 9295 or the “Domestic Shipping Developmenc 
Acc”. Further, Section 14 of Republic Act No. 9295 is hereby amended insofar 
as it is inconsistent with Section 51 of this Act. 
Such other laws, presidential decrees, executive orders, issuances, rules and 
1-egulations or parts thereof, which are otherwise inconsistent with the provisions of this Act 
are hereby repealed, amended or modified accordingly. 
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SEC. 134. 
Separabiliry Clause. - If, for any reason, any section, subsection, clause 
or term of this Act is held to be illegal, invalid, or unconstitutional, such parts not affected by 
st& declaratjon shall remain in h l l  force and effect. 
SEC. 135. Transitory Provision. - Every ship currently registered under the laws or 
the Philippines and granted the privilege to fly its flag shall be deemed to be registered under 
this ACL insofar as its registration is not inconsistent with the provisions of this Act and such 
registration shall continue to be valid until its expiration unless sooner revoked by the 
Maritime Industry Authority. 
Any ship mortgage entered into in accordance with the provisions of the Ship 
Mortgage Decree or the Chattel Mortgage Law shall continue to be valid and effective and its 
registration shall be transferred to the Maritime Industry Authority in accordance with the 
provisions of this Act. Nothing in the transfer shall change or in any way alter or affect any 
preference a registered mortgage may enjoy or the original date on which such mortgage was 
entered in the registry. 
SEC. 136. Effectivity. - This Act shall take effect after fifteen (15) days following its 
publication in a newspaper of general circulation 
Approved, 
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