FIFTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
'j r. 
u 
SEN~~24 
S.No. __ _ 
Introduced by Senator Miriam Defensor S~:ti::~et'" ,. r.' "v:. '-t---
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 200 I 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 these business areas. In order to make the Philippine flag an attractive registry, the existing 
legal 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 fr0111 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 
1 


1978 is defective and nnacceptable to foreign bankers because the liens are not clearly delineated 
aud 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 cau 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 Maritime Claims 
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 aud 
mortgages cannot be properly enforced in accordauce with international practices unless the 
appropriate procedure is provided. This cau 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 aud allow us to achieve 
uniformity with international standards. In view of the foregoing, the immediate enactment of 
this measure is earnestly 
This bill was originally filed by Senator Mar Roxas during the Fourteenth Congress, 
Second Regular Session 
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FIFTEENTfI CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENAW 
S. No. 2::>24 
1 
'o~·r3{;t {~: 
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Introduced by Senator Miriam Defensor Simti~:~I"\IEfl BV: =e-<~ 
1 
AN ACT 
2 
INSTITUTING SHIPPING INDUSTRY REFORMS, PROVIDING FOR THE 
3 
PURPOSE A CLEAR SYSTEM OF SHIP REGISTRATION AND INCENTIVES 
4 
THEREFOR, A COMPREHENSIVE MECHANISM FOR SHIP MORTGAGES, 
5 
MARITIME CLAIMS AND MARITIME LIENS, AND FURTHER DEFINING 
6 
THE PARAMETERS FOR SHIP ARREST AND MARITIME LIABILITY 
7 
LIMITATION AND FOR OTHER PURPOSES. 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
8 
ThkI 
9 
General Provisions 
10 
Chapter I 
11 
Policies 
12 
SECTION I. Short Title of the Act - This Act shall be known as "The Philippine 
13 
Shipping Industry Reforms Act" 
14 
SEC. 2. Declaration of Policies - The State recognizes that shipping is a necessary 
15 
infrastructure which is vital to the economic development of our country. The Philippines needs 
16 
a strong and competitive merchant marine fleet owned and controlled by Filipinos, manned by 
17 
qualified Filipino officers and crew, which shall: 
18 
(a) Ensure safe, reliable, efficient, adequate and economic passenger and cargo service 
19 
through the maintenance of well-equipped, safe and .modern vessels most suitable for Philippine 
20 
overseas and domestic shipping requirements and conditions; 
1 


1 
(b) Ensure the growth of exports by providing necessary, competitive and economical sea 
2 
linkages through the provision of ships that are capable of meeting the requirements of 
3 
expanding Philippine international trade; 
4 
( c) Encourage the dispersal of industry and the economic development of our regional 
5 
communities by ensuring the availability of regular, reliable and efficient shipping services; 
6 
(d) Function as an employment base for the growing community of highly skilled and 
7 
qualified Filipino seafarers; 
8 
(e) Provide a means to access financing to encourage long term vessel acquisition, 
9 
development, modernization and expansion programs principally driven by private investments; 
10 
and 
11 
(0 Serve as a naval and military auxiliary in times of war and other national emergencies. 
12 
The State shall promote such other necessary administrative and executive policies that will 
13 
ensure the continued growth of the Philippine merchant fleet in consonance with international 
14 
practices and provide a mechanism for the early adoption and implementation of international 
15 
maritime regulations and conventions. 
16 
SEC. 3. Scope of the Act - Unless otherwise indicated, this Act shall apply to: 
17 
(a) All merchant marine ships, whether seagoing or coastwise, authorized to carry 
18 
passengers or cargo, or both, which are registered under the Philippine flag; 
19 
(b) A 11 persons, partnerships, corporations, firms or other entities duly registered and 
20 
licensed to engage in the business of shipping as ship owners, ship operators, bareboat charterers, 
21 
or ship managers, or those acting on their behalf; 
22 
( c) All ship mortgages over Philippine flag vessels registered in accordance with this Act 
23 
and those that are to be enforced against other ships that are found within the jurisdiction of the 
24 
Philippines regardless of nationality; 
25 
(d) All maritime liens and claims that are incurred in the Philippines or are to be enforced 
26 
on ships found within the jurisdiction of the Philippines regardless of nationality; 
2 


1 
(e) All ships arrested for the enforcement of maritime claims that are within the territorial 
2 
jurisdiction of the Philippines regardless of nationality; and 
3 
(f) All ships that are within the territorial jurisdiction of the Philippines against which a 
4 
maritime claim that is subject to applicable limits of liability is sought to be enforced regardless 
5 
of the nationality of such ship. 
6 
The provisions of this Act, however, shall not apply to any war ship, naval auxiliary ship 
7 
or other ship owned or operated by the Philippine government or any foreign government for 
8 
non-commercial service. 
9 
Chapter 2 
10 
Definitions 
11 
SEC. 4. Definition of Terms. - The following terms shall have the meanings hereinafter 
12 
set forth: 
13 
a. "Arrest" shall mean the attachment of a vessel by judicial process through an order of a 
14 
court in order to secure the enforcement of a maritime claim, which attachment shall produce the 
15 
effect of detaining or restricting the removal of the vessel from the territorial jurisdiction of the 
16 
Philippines, but shall not include the seizure of a ship in execution or satisfaction of a judgment; 
, 
17 
b. "Bareboat charter" shall mean a contract for the lease of a ship, for a stipulated period 
18 
of time, by virtue of which the bareboat charterer has complete possession and control of the 
19 
ship, including the right to appoint the master and the crew of the ship, for the duration of the 
20 
lease; 
21 
c. "Bareboat charterer" or "charterer" may be used interchangeably and shall refer to any 
22 
person, commercial partnership or corporation which bareboat charters a Philippine flag vessel 
23 
from another Philippine national, or a vessel of foreign ownership registered in a compatible 
24 
registry, for its own use; 
25 
d. "Board of Marine Inquiry" shall refer to the Board of Marine Inquiry created III 
26 
accordance with section 7 of Presidential Decree No. 601; 
3 


1 
e. "Certificate of Philippine Registry" shall mean the document of registration of a vessel 
2 
registered in accordance with section 20 of this Act; 
3 
f "Claimant" shall mean a person who asserts that a maritime claim exists in his favor; 
4 
g. "Classification society" shall refer to any government-accredited organization 
5 
authorized to implement published rules and regulations governing the structural strength, safety 
6 
and reliability of a ship in order to maintain basic conditions on board and enables the ship to 
, 
7 
operate in its intended service; 
8 
h .. "Coastwise vessel" shall refer to any Philippine flag vessel authorized to carry 
9 
passengers or cargo, or both, between two domestic ports, in the coastal or internal waters of the 
10 
Philippines; 
11 
i. "Compatible registry" shall mean a foreign registry which has entered into an 
12 
agreement with the Maritime Industry Authority in order to determine and establish the 
13 
requirements for the transfer of registration of ships from one registry to the other; 
14 
j. "Court" or "Philippine court" may be used interchangeably and shall refer to a court of 
15 
appropriate jurisdiction within the territory of the Philippines; 
16 
k. "De-registration" shall refer to the act of deleting a ship from the Registry of Ships of 
17 
the Philippines and the cancellation a/the Certificate a/Philippine Registry in accordance with 
18 
Title 11, Chapter 5 of this Act; 
19 
J. "Foreign court" shall mean a court exercising jurisdiction in a territory other than in 
20 
the Philippines; 
21 
m. "Foreign flag vessel" shall refer LO a ship which is registered under the laws of a 
22 
country other than the Philippines and which is authorized to fly the flag of that country; 
23 
n. "Foreign registry" shall mean the registry of ships of a country other than the 
24 
Philippines; 
25 
o. "International maritime convention" or "international convention" may be used 
26 
interchangeably and shall refer to any written treaty or agreement, or any protocol or amendment 
27 
thereto, affecting the maritime industry which has been agreed to and approved by States as 
4 


1 
members of the International Maritime Organization or other international agency, which the 
2 
Philippines has ratified and which is in force; 
3 
p . "Marine surveyor" shall refer to any government- accredited person, organization or 
4 
classification society authorized to conduct safety inspections and examine the general condition 
sofa ship; 
6 
q. "Maritime claim" shall d e r to any of the claims provided in section 88 o[this Act; 
7 
r. "Maritime Industry Authority" shall refer to the government agency created III 
8 
accordance with Presidential Decree No. 474 as amended; 
9 
s. "Maritime lien" shall refer to a charge that attaches to a ship which arises from a 
10 
maritime claim against the ship, its owners, charterers, managers or operators that results in a 
11 
demand for indemnity or remuneration from the ship or its owners, charterers, managers or 
12 
operators and is enforceable by judicial action; 
13 
t. "Mortgagee" shall refer to the person, whether natural or juridical, in whose favor a 
14 
ship mortgage is created in order to secure a principal obligation; 
15 
u. "Mortgagor" shall refer to a ship owner who constitutes a ship mortgage over a vessel 
16 
or a vessel under construction registered in its name iii order to secure the fulfillment of a 
17 
principal obligation; 
18 
v. "Philippine Coast Guard" shall refer to the government agency created in accordance 
19 
with Republic Act No. 5173, as amended; 
20 
w. "Philippine flag vessel" shall mean any vessel duly registered under Philippine laws 
21 
and authorized to fly the Philippine flag; 
22 
x. "Philippine national" shall refer to any individual who is a citizen of the Philippines, or 
23 
a commercial pminership or corporation organized under the laws of the Philippines, at least 
24 
60% of the capital of which is owned by citizens of the Philippines; 
25 
y. "Registration" shall refer to the act of entering a ship in the Registry of Ships of the 
26 
Philippines in accordance with Title II, Chapter I of this Act; 
27 
z. "Registry of Ships of the Philippines" shall refer to the official public register 
28 
maintained by the Maritime Industry Authority in accordance with section 15 hereof which shall 
5 


1 
hold the record of all vessels and its encumbrances registered under Philippine laws and shall 
2 
hereafter be referred to as the "Registry"; 
3 
aa. "Seagoing vessel" shall refer to any Philippine flag vessel of 500 gross tons or more, 
4 
authorized to carry passengers or cargo, or both, in trade between a Philippine port and a foreign 
5 
port, or between two foreign ports; 
6 
bb. "Ship manager" shall mean any person, commercial partnership or corporation to 
7 
which the technical or commercial management, or both such technical and commercial 
8 
management, of a ship has been entrusted by the ship owner and for that purpose is in charge of 
9 
the operation of the ship which may include, but shall not be limited to, vessel maintenance and 
10 
upkeep, crewing, and passenger and cargo solicitation; 
11 
cc. "Ship mortgage" shall mean a contract executed by the owner of a ship creating a 
12 
security interest over a particular vesse 1 or a vessel under construction in order to secure the 
13 
performance of a principal obligation; 
14 
dd. "Ship owner" shall refer to any person, commercial partnership or corporation 
15 
authorized to own, operate, manage, control, lease or charter out, or otherwise engage in the 
16 
business of shipping; 
17 
ee. "Ship operator" shall refer to any person, commercial partnership or corporation 
18 
authorized to operate, manage or control a ship owned by another; 
19 
ff. "Tonnage" or "gross tonnage" may be used interchangeably unless otherwise 
20 
indicated and shall refer to the ship's gross tonnage calculated in accordance with the tonnage 
21 
measurement rules provided in the applicable international convention on the tonnage 
22 
measurement of ships; 
23 
gg. ':Unit of account" shall refer to the special drawing right (SDKs), which is an 
24 
international reserve asset created by the International Monetary Fund (IMF) in 1969 to 
25 
supplement the existing official reserves of member countries. SDRs are allocated to member 
26 
countries in proportion to their IMF quotas. The SDR also serves as the unit of account of the 
27 
IMF and some other international organizations. Its value is based on a basket of key 
28 
international currencies. 
6 


1 
hh. "Vessel" or "ship" may be used interchangeably and shall refer to any boat, craft or 
2 
artificial contrivance capable of floating in water, designed to be used, or capable of being used, 
3 
as a means of water transport for the carriage of passengers or cargo, or both, utilizing its own 
4 
motive power or that of another, and shall include a ship under construction and for purposes of 
5 
this Act shall continue to be considered as personal property; 
6 
ii. "Vessel certificate" shall refer to the official document issued by the appropriate 
7 
government agency attesting to the fact that the vessel complies with the requirements imposed 
8 
by international conventions or government regulations on safety and protection of the marine 
9 
environment. 
10 
Chapter 3 
11 
Regulatory Agencies 
12 
SEC. 5. Implementing Agencies - The implementation of this Act shall be vested in the 
13 
Maritime Industry Authority and the Philippine Coast Guard. 
14 
SEC. 6. Powers and Functions o/the Maritime Industry Authority - For the purposes of 
15 
this Act, the Maritime Industry Authority shall have ihe following powers and functions: 
16 
a. Accredit and license ship owners and operators; 
17 
b. Maintain the Registry of Ships of the Philippines; 
18 
c. Record all registrations, de-registrations, deletions, transfers, sales, purchases, bareboat 
19 
charters, and mortgages of Philippine flag vessels; 
20 
d. Issue certificates of Philippine registry, provisional certificates of Philippine registry 
21 
and such other authorizations, clearances and documents required to give effect to any 
22 
registration or de-registration of any vessel; 
23 
e. Issue certificates of ownership to vessels which are not eligible for the issuance of a 
24 
certificate of Philippine registry; 
25 
f. Conduct an inquiry on any application for the issuance of a certificate of Philippine 
26 
Registry; 
7 


1 
g. D~putize the Philippine Coast Guard for the registration of vessels that are within the 
2 
Philippin~s 'and the collection of fees incident to such registration; 
3 
h. Deputize Philippine consular officers or maritime attaches for the registration of 
4 
vessels wanting to transfer to the Philippine registry but are outside the territorial jurisdiction of 
5 
the Philippines and the collection of fees incident to such registration; 
6 
i. Enter into cooperations with foreign registries to determine and establish the 
7 
requirements for registration, de-registration and enforcement in order to ensure the 
8 
compatibility of requirements of the Philippine registry with that of other foreign registries; 
9 
j. Issue certificates of public convenience to coastwise vessels; 
10 
Ie. Investigate any complaint made in writing, and after notice and hearing, revoke any 
11 
registration, certificate, license, accreditation or document issued to any seagoing coastwise 
12 
vessel, ship owner, ship operator, bareboat charterer, or ship manager; 
13 
1. Impose fines on or otherwise penalize any vessel, ship owner, ship operator, bareboat 
14 
charterer or ship manager found violating the provisions of this Act; 
15 
m. Exercise such other functions necessary for or incidental to the exercise of its powers 
16 
and functions as inandated under this Act. 
17 
Sec.7. Powers and Functions of the Philippine Coast Guard. - For the purposes of this 
18 
Act, the Philippine Coast Guard shall have the following powers and functions: 
19 
a. Enforce laws, promulgate and administer regulations relating to the promotion of the 
20 
safety of life and property at sea, the prevention of marine pollution and the protection of the 
21 
marine environment in accordance with international maritime conventions; 
22 
b. Approve plans for the construction, repair or alteration of vessels, and the materials, 
23 
equipment and appliances of vessels in accordance with international conventions and domestic 
24 
regulations giving effect to such conventions on the safety of life at sea, marine pollution, load 
25 
line requirements and other related conventions; 
26 
c. Conduct the initial and periodic inspections of vessels as well as their equipment and 
27 
appliances either by itself or through the agency of a marine surveyor or classification society; 
8 


1 
d. Approve the classification of vessels either by itself or through the agency of a 
2 
classification society; 
3 
e. Accredit and license surveyors and classification societies and deputize them to 
4 
perform such functions necessary to give effect to the requirements of international maritime 
5 
conventions and government regulations; 
6 
f. Issue certificates of inspectio'n; 
7 
g. Determine the safe manning requirements of vessels and the certificates of competency 
8 
which each crew member should possess considering the type, tonnage, power, means of 
9 
propulsion and trading limitations of particular ships and, for this purpose, issue safe manning 
10 
certificates to ships; 
11 
h. Determine the safety, life saving, pollution prevention and communication equipment 
12 
to be installed on board every vessel considering its type, tonnage and trading limitations; 
13 
i. Investigate on its own or through the Board of Marine Inquiry marine casualties, 
14 
accidents, incidents, disasters and marine protests in order to determine the liability of vessels, 
15 
ship owners, ship operators, bareboat charterers, ship managers, ship officers and crew; 
16 
j. Impose fines or otherwise penalize any vessel, ship owner, ship operator, bareboat 
17 
charterer, ship manager or classification society found violating the provisions of this Act: 
18 
Ie. Exercise such other functions necessary for or incidental to the exercise of its powers 
19 
and functions as mandated under this Act. 
20 
SEC. 8. Issuance of Implementing Rules and Regulations -. The Maritime Industry 
21 
Authority and the Philippine Coast Guard shall jointly issue the necessary rules and regulations 
22 
to implement the provisions of this Act; Provided, that such rules and regulations shall not 
23 
change or in any way amend or be contrary to the intent and purposes of this Act. 
24 
SEC. 9. Power to Adopt Regulations to Coriform to International Maritime Conventions -
25 
The Maritime Industry Authority and the Philippine Coast Guard acting by themselves, or in 
26 
conjunction with each other, shall recommend to the Department of Transportation and 
9 


1 
Communications (DOTC), through the Secretary, the adoption of international maritime 
2 
conventions so that the appropriate recommendation can be made, and the relevant instrument of 
3 
ratification may be issued, by the Senate of the' Philippines; Provided, That in case of a 
4 
subsequent amendment to any existing international convention or treaty to which the 
5 
Philippines is already a party, both the Maritime Industry Authority and the Philippine Coast 
6 
Guard are hereby empowered and authorized to amend and revise their respective rules and 
7 
regulations to conform with the amendments to the relevant convention or treaty without need of 
8 
further authorization; Provided however, That such power and authority to amend and revise 
9 
shall apply only if the original convention or treaty expressly allows for the same and shall be 
10 
limited only to the technical aspect of the convention or treaty. 
11 
Title II 
12 
Vessels 
13 
Chapter 1 
14 
Registration of Vessels 
15 
SEC. 10. Registry of Ships of the Philippines. - The Registry of Ships of the Philippines 
16 
shall be the official public registry of ships and shall contain all records of registrations, 
17 
deletions; transfers, bareboat charters, and mortgages of Philippine flag vessels. The Registry 
18 
shall be open to public inspection during regular business hours. Any person wishing to inspect 
19 
the Registry, or obtain extracts or copies of instruments deposited with the Registry, may do so 
20 
upon prior written application to and approval of the administrator of the Maritime Industry 
21 
Authority. 
22 
SEC. 11. Vessel Eligibility, - Vessels of any size, age or type that are classed by a 
23 
classification society, whether owned or chartered by Philippine national, may be registered 
24 
under the Philippine flag. Vessels that are more than twenty (20) years old on their first 
10 


, 
1 
application for registration shall be subject to a safety inspection as a pre-condition to the 
2 
issuance of a certificate of Philippine registry. 
3 
Vessels of a foreign registry that are covered by a bareboat charter may be registered 
4 
under the Philippine flag; Provided, that the duration of the bareboat charter is not less than one 
5 
(I) year and its registration under the foreign flag of primary registration shall not be abandoned, 
6 
but shall be deemed suspended, for the duration of the ship's registration under the Philippine 
7 
flag. 
8 
SEC. 12. Vessel Ownership. - Every vessel registered in accordance with this Act shall be 
9 
owned or chartered by one or more Philippine nationals and, in the case of corporations or 
10 
commercial partnerships, the president and corporate secretary or general manager and 
11 
partnership secretary thereof, as the case may be, shall be citizens and residents of the 
12 
Philippines. 
13 
SEC. 13. Vessels Required to be Registered - Every coastwise vessel and seagoing vessel 
14 
shall be registered in accordance with the provisions of this ACL. To this end, it shall be the duty 
15 
of the ship owner, ship operator, bareboat charterer, or any person acting on behalf of every 
16 
vessel to apply with the Maritime Industry Authority for the registration of the vessel. 
17 
SEC. 14. Where the Registration is to be Made. -The registration of a coastwise vessel 
18 
shall be made at its home port or at the port where the nearest regional office of the Maritime 
19 
Industry Authority, or the nearest Philippine Coast Guard detachment deputized for the purpose, 
20 
is located. The registration of a seagoing vessel shall be made in the principal office of the 
21 
Maritime Industry Authority in the port of Manila. If the vessel is not within the territory of the 
22 
Philippines at the time of acquisition or bareboat charter, the application for registration shall be 
23 
made through the nearest Philippine consular office where the vessel may be found. The 
24 
Philippine consular office receiving the application shall have the duty to forward the same to the 
25 
principal office of the Maritime Industry Authority in the port of Manila. 
11 


1 
SEC. 15. The Registry of Ships of the Philippines. - The Maritime Industry Authority 
2 
shall maintain the following sub-registries for Philippine flag vessels: 
3 
a. "The Principal Registry of Philippine Vessels" in which the record of all registrations, 
4 
deletions, transfers, leases, bareboat charters out, suspensions of registry, mortgages, 
5 
encumbrances and other commercial transactions of seagoing and coastwise ships owned by 
6 
Philippine nationals shall be made; 
7 
b. "The Bareboat Charter Registry of Vessels" in which all records of registrations and deletions' 
8 
of ships which are bareboat chartered into the Philippines shall be made. This sub-registry shall 
9 
also note clown the following details: 
10 
(i) the name and address of the registered owner in the primary registry; 
11 
(ii) the registered name of the vessel as it appears in the primary registry; 
12 
(iii) a reference that encumbrances on the vessel appear in the primary registry; 
13 
c. "The Registry of Fishing Vessels" in which all records of registrations and deletions of fishing 
14 
vessels owned by Philippine nationals shall be made; 
15 
d. "The Registry of Yachts and other Recreational Vessels" in which all records of registrations 
16 
and deletions of yachts and other recreational vessels owned by Philippine nationals shall be 
17 
made. 
18 
SEC. 16. Documents Required for the Registration of Vessels. - Every ship owner or 
19 
bareboat charterer wishing to enroll a vessel in the Registly shall be required to submit the 
20 
following documents to the Maritime Industry Authority: 
21 
a. A written application for registration; 
22 
b. A notarized copy of the declaration of ownership; 
23 
c. A certified copy of the Certificate of Sole Proprietorship, or Articles of 
24 
d. The power of attorney, partnership resolution or secretary's certificate authorizing the 
25 
enrollment of the ship in the Registry; 
26 
e. The tonnage measurement certificate; 
12 


1 
f. 
The certificate issued by a classification society showing that the ship is in class; 
2 
g. The vessel certificates required by international conventions and domestic regulations; 
3 
h. The application for a provisional radio license; 
4 
i. The application for vessel name; 
5 
J. 
A 'certified copy of the cover note or certificate of entry in the name of the ship owner or 
6 
bareboat charterer showing the current hull and machinery, and protection and indemnity 
7 
insurance coverage. 
8 
SEC. 17. Additional Documents Required -- In addition to the documents listed in the 
9 
immediately preceding section, every ship owner or bareboat charterer shall be required to 
10 
submit the following documents: 
11 
For new buildings: 
12 
(i) A notarized copy of the original builder's certificate; 
13 
For second hand tonnage: 
14 
(i) A notarized copy of the bill of sale or other document of tide evidencing the transfer, 
15 
(ii) The certificate of deletion from the previous registry; 
16 
(iii)The celtificate of non-encumbrance issued by the previous registry; 
17 
(iv)A safety inspection certificate if the vessel is more than twenty (20) years old; 
18 
For bareboat chartered or leased ships: 
19 
(i) The proof of ownership and consent of the registered owner to the vessel's enrollment in the 
20 
Registry; 
21 
(ii) A certified true copy of the bareboat charter; 
22 
(iii) If the bareboat charterer wishes to change the vessel's name, a letter requesting the change 
, 
23 
of name of the vessel from that appearing in its primary registry and the reason for the request; 
24 
(iv) The written consent to the transfer of registry of the holders ofal! mortgages, hypothecations 
25 
or similar charges against the vessel registered in the foreign registry; 
26 
(v) Certified true copies of all mortgages, hypothecations, and charges, with an English 
27 
translation of such documents; 
13 


1 
(vi) The written consent LO the bareboat charter registration of the appropriate authority of the 
2 
country of primary registration of the vessel, or satisfactory evidence that such consent is not 
3 
required; 
4 
(vii) A transcript of the register or other document from the appropriate authority of the country 
5 
of primary registration showing all recorded mortgages and encumbrances on the vessel 
6 
appearing in that registry; 
7 
(viii) A safety inspection certificate if the vessel is more than twenty (20) years old. 
8 
(ix) Such other documents necessary to support the application for the enrollment of ships in the 
9 
Registry as may be required by regulation. 
10 
Sec. IS. Data to be Listed in the Registry. - The following data shall be listed, in such 
11 
form and detail for all ships entered in the Registry of Ships: 
12 
a. Name of vessel; 
13 
b. Keel number; 
14 
c. Hull material; 
15 
d. Principal dimensions; 
16 
e. Gross tonnage; 
17 
f. Net tonnage; 
18 
g. IMO number; 
19 
h. Official number; 
20 
i. Place of build; 
21 
j. Year of build; 
22 
k. Name and address of registered owner, ship operator, bareboat charterer, manager or other 
23 
person responsible for the ship; 
24 
I. Date of issuance of certificate of Philippine registry; 
25 
m. Class of vessel; 
14 


1 
In the case of second hand tonnage, the following additional data shall likewise be a 
2 
reference that encumbrances on the vessel appear in the primary registry listed in the Registry of 
3 
Ships: 
4 
a. Place of previous registry; 
5 
b. Name of previous owner. 
6 
In the case of bareboat chartered vessels, the' following additional data shall also be listed 
7 
in the Registry of Ships: 
8 
a. Place of primary registry; 
9 
b. Name of registered owner appearing in the primary registry; 
10 
c. Name of the vessel as it appears in the primary registry; 
11 
d. A reference that encumbrances on the vessel appear in the primary registry. 
12 
Any material change of condition with respect to any of the preceding items and any 
13 
other fact required by regulation shall likewise be recorded in the Registry of Ships. 
14 
SEC. 19. Proceedings Prior to the Grant of a Certificate of Philippine Registry. -No 
15 
application for a Certificate of Philippine Registry shall be approved and issued until: 
16 
a. An inspection of the vessel and its documents has been conducted; and 
17 
b. It is verified that the applicant meets the ownership requirements prescribed by this 
18 
Act. 
19 
The Maritime Industry Authority on its own or through the agency of the Philippine 
20 
Coast Guard, may conduct the inspection and investigation at any time in order to ascertain 
21 
whether the vessel is entitled to have, or to retain, the certificate of Philippine registry. Further 
22 
inquiries may be made through a formal administrative investigation of the vessel's owner, 
23 
operator, charterer, manager, master, crew or passengers to determine the ownership or title and 
24 
the intention to engage in legitimate trade of any vessel seeking a certificate of Philippine 
25 
registry. 
15 


1 
SEC. 20. Issuance of the Certificate of Philippine Registry. -Upon the application for 
2 
registration and a satisfactory determination of eligibility, a certificate of Philippine registry shall 
3 
be issued to all vessels which are more than fifteen (15) gross tons. A certificate of Philippine 
4 
registry shall be valid for a period of no more than three (3) years, renewable for a similar period 
5 
or periods provided the vessel continues to meet all the requirements to be eligible for 
6 
registration. 
7 
In the case of bareboat chartered vessels, the certificate of Philippine registry shall be 
8 
valid for a period of no more than three (3) years or the period of the bareboat charter, whichever 
9 
is shorter. 
10 
SEC. 21. Registration of Vessels between Three and fifieen Gross Tons. - A vessel 
11 
between three (3) gross tons and fifteen (15) gross tons shall be registered with the Maritime 
12 
Industry Authority and a celtificate of ownership shall be issued to it. The application for the 
13 
issuance of a certificate of Philippine registry shall be optional with the owner of such vessel. 
14 
SEC. 22. Registration of Vessels of Three Gross Tons or Less. - A vessel of three (3) 
15 
gross tons or less shall not be registered, unless requested by its owner. Neither shall a document 
16 
of registration of any kind be required for such vessel. The application for the issuance of a 
17 
certificate of ownership shall be optional with the owner of such vessel. 
18 
SEC. 23. Provisional Registration of Vessels. - A provisional certificate of Philippine 
19 
registry may be issued to ships applying for registration provided all documents listed in section 
20 
16 have been submitted and the submission of the additional documents required in section 17 is 
21 
pending. 
22 
The provisional certificate of Philippine registry shall be valid for a period of ninety (90) 
23 
days subject to a single renewal of another ninety (90) days. If the ship owner or bareboat 
24 
charterer fails to submit all required documents within the stipulated period, the provisional 
16 


1 
certificate of Philippine registry shall automatically expire on the date appearing on the 
2 
provisional certificate. 
3 
SEC. 24. Appointment of Consular Officials for the Provisional Registration of ships. - If 
4 
the ship is outside Philippine territory, the application for registration and its supporting 
5 
documents enumerated in sections 16 and 17 may be submitted to the nearest Philippine consular 
6 
office which shall then have the duty to forward the documents to the offices of the Maritime 
7 
Industry Authority in the port of Manila. The Philippine consular officer, upon the ship owner's 
8 
or bareboat charterer's submission of all documents enumerated in section 16 may, at the 
9 
direction of the Maritime Industry Authority, issue a provisional certificate of registry to the 
10 
vessel. 
11 
SEC. 25. Form and Contents of Certificate of Philippine Registry. -The certificate of 
12 
Philippine registry shall contain the following information: 
13 
a. Name ofthe vessel; 
14 
b. Name and address of the registered owner or charterer; 
15 
c. Keel number; 
, 
16 
d. Hull material; 
17 
e. Principal dimensions; 
18 
f. Gross tonnage; 
19 
g. Net tonnage; 
20 
h. IMO number; 
21 
i. Official number; 
22 
j . Year of build; 
23 
k. Date of issuance of certificate of Philippine registry; 
24 
I. List of registered encumbrances. 
17 


1 
Such other information as may be determined by regulation may likewise be set forth in 
2 
the certificate of Philippine registry. The certificate of Philippine registry issued to every ship 
3 
which is bareboat chartered in shall, in addition, contain the following information: 
4 
a. The fact that the ship is covered by a bareboat charter and the date of such charter; 
5 
b. The name of the ship as it appears in its primary registry, if such name has been changed upon 
6 
entry in the Philippine registry; 
7 
c. The name of the registered owner or owners as it appears in the primary registry; 
8 
d. A reference that registered encumbrances appear in the primary registry. 
9 
Chapter 2 
10 
Vessels Under Construction 
11 
SEC. 26. Registration of Vessels Under Construction. - Vessels under construction 
12 
contracted by a Philippine national may be registered in accordance with the provisions of this 
13 
Act. In order that the vessel may be the subj ect of registration under this Act, it is necessary that 
14 
the Ieeel of the vessel must have been laid and a keel number assigned by the shipyard at the 
15 
time of application. 
16 
SEC. 27. Documents Required for the Registration of Vessels Under Construction. -
17 
Every ship owner wishing to enroll a vessel under construction in the Registry shall be required 
18 
to submit the following documents: 
19 
a. A written application for registration; 
20 
b. A notarized copy of the declaration of ownership; 
21 
c. A certified cop; UP the Certificate of Sole Proprietorship, or Articles of Partliership, 
22 
or Articles of Incorporation of the ship owner or operator, as the case may be; 
23 
d. The power of attorney, partnership, resolution or secretary's certificate authorizing 
24 
enrollment of the ship in the Registry; and 
25 
e. A notarized copy of the shipbuilding contract. 
18 


1 
SEC. 28. Document of Registration. - A provisional certificate of registration shall be 
2 
issued to a vessel under construction and shall be valid for the period during which the vessel is 
3 
under construction. 
4 
SEC. 29. Form and Contents of the Document of Registration. - The provisional 
5 
certificate of registration issued to c ship under construction shall contain the following 
6 
information: 
7 
a. Name of the vessel; 
8 
b. Name and address of the registered owner; 
9 
c. Keel number; 
10 
d. Hull material; 
11 
e. Principal dimensions of the vessel; and 
12 
f. A list of registered encumbrances. 
13 
Chapter 3 
14 
Rights and Privileges Granted to 
15 
Vessels of Philippine Registry 
16 
SEC. 30. Privileges Conferred by a Certificate of Philippine Registry. -A certificate of 
17 
Philippine registry confers upon the vessel the following rights and privileges: 
18 
a. The privilege to fly the flag of the Philippines; 
19 
b. The privilege to engage, consistently with law, in Philippine coastwise trade in accordance 
20 
with the corollary permits, certificates and licenses that may be issued to the vessel; 
21 
c. The right to invoke the diplomatic and naval protection of Philippine authorities and the 
22 
protection of the flag of the Philippines; and 
23 
d. The right to invoke the exercise of jurisdiction and control by Philippine government 
24 
authorities over all persons found on board the vessel, or over any incident involving the penal or 
25 
disciplinary responsibility of the master or any member of the crew whether the same arises from 
19 


1 
a crime or quasi-delict committed on board the vessel or from ally collision or other incident of 
2 
navigation concerning the ship. 
3 
Chapter 4 
4 
Registration Fees; and Tonnage Taxes 
5 
SEC. 31. Processing fee. -- A processing fee shall be paid by the applicant when the 
6 
application [or registration is filed. The processing fee shall be collected to cover administrative 
7 
costs for handling and processing the application. The processing fee shall be in such amolmt as 
8 
may be determined by the Maritime Industry Authority by regulation and approved by the 
9 
Secretary ofthe Department of Transportation and Communications. 
10 
11 
SEC. 32. Registration fee. - A registration fee shall be payable by the ship owner or 
12 
bareboat charterer when the ship is first entered in the Registry and shall be paid when the 
13 
Certificate of Philippine Registry is issued. The registration fee shall be computed on the basis of 
14 
the tonnage of the vessel and shall be in such amolllt as may be determined by regulation issued 
15 
by the Maritime Industry Authority and approved by the Secretary of the Department of 
16 
Transportation and Commlllications. 
17 
The registration fee shall be payable by the ship owner or charterer regardless of whether 
18 
the ship is owned or bareboat chartered, or if the ship will be used commercially, or for fishing, 
19 
or for recreation. 
20 
The registration fee shall be reviewed from time to time and, when deemed appropriate, 
21 
the Maritime Industry Authority shall submit a recommendation to the Secretary of the 
22 
Department of Transportation and Commlllications to adjust the same. Any adjustment in the 
23 
registration fee shall be subject to the prior approval of the Secretary of the Department of 
24 
Transportation and Communications. 
20 


1 
SEC. 33. Annual Tonnage Taxes for Seagoing Vessels. - A tonnage tax shall be imposed 
2 
and shall be payable annually by every ship owner or bareboat charterer, for every Philippine 
3 
flag vessel it owns or charters commencing the year after the entry of such ship in the Registry. 
4 
The tonnage tax shall be payable no later than January 31 of each year and shall be assessed in 
5 
accordance with the following schedule: 
6 
7 
8 
Tonnage 
500 gross tons or less 
Over 500 gross tons 
TOimage Tax 
Pl,500.00 
Plus P20.00 per ton 
9 
The tonnage tax paid shall be in lieu of any income tax due from the ship owner or 
10 
bareboat charterer and the withholding tax due on the lease or bareboat charter fees earned by the 
11 
non-resident ship owner. 
12 
SEC. 34. Exemption from Duties and Taxes. - The importation by a ship owner or 
13 
bareboat charterer of a vessel, and the spare parts and equipment needed for the repair and 
14 
maintenance of such vessel shall be exempt from the payment of: 
15 
a. Import duties and taxes; and 
16 
b. Value added taxes. 
17 
SEC. 35. Renewal of the Certificate of Philippine Registry, - Only a processing fee shall 
18 
be paid by any ship owner or operator wishing to renew a Certificate of Philippine Registry. The 
19 
processing fee paid for the renewal of the Certificate of Philippine Registry shall be in addition 
20 
to the payment ofthe annual tonnage tax due for the year the renewal of registration is made. 
21 
Chapter 5 
22 
De-registration or Suspension of Registration 
23 
of Philippine flag vessels 
21 


1 
SEC, 36. Sale, Bareboat Charter or other Transfer of Philippine Flag Vessels. - A ship 
2 
owner m~y freely sell, transfer, bareboat charter out or otherwise dispose of a vessel registered in 
3 
his name. 
4 
SEC 37. Deletion from the Registry of Ships of the Philippines. - A ship shall be deleted 
5 
from the Registry of Ships for any of the following reasons: 
6 
a. If it is transferred to a natural or juridical person who does not meet the ownership 
7 
requirements imposed by this Act; or 
8 
b. If it commits any act inimical to the security or interests of the Philippines; or 
9 
c. If it is entered in a foreign registry without the prior approval of the Maritime Industry 
10 
Authority; or 
11 
d. If its bareboat charter party is not extended or renewed; or 
12 
e. If it is sold for scrap; or 
13 
f If it is lost. 
14 
If the vessel is sold, transferred or disposed of, the ship owner or operator shall be 
15 
required to submit the following documents to effect the deletion of the ship's registration: 
16 
a. A written request to delete the ship's registration; 
17 
b. A notarized copy of the bill of sale; 
18 
c. The original certificate of registry; 
19 
d. The original radio station license; and 
20 
e. A certification from the appropriate agency showing that all outstanding taxes, fees and 
21 
charges due to the government have been paid. 
22 
If the bareboat charter is not extended or renewed, the documents listed in the 
23 
immediately preceding paragraph shall likewise be submitted by the bareboat charterer, however, 
24 
in lieu of the notarized copy of the bill of sale, a statement from the charterer shall be submitted 
25 
saying that the bareboat charter has been terminated or that it has expired and the same has not 
26 
been renewed. 
22 


1 
If the vessel has been lost, the ship owner, in lieu of the notarized copy of the bill of sale, 
2 
shall be required to submit a copy of the report of the incident which has resulted in the loss of 
3 
the vessel issued by the Philippine Coast Guard. 
4 
SEC. 38. De-registration of a ship which is Subject of a Mortgage. - No ship shall be 
5 
deleted from the Registry unless: 
6 
a. All mortgages are discharged; or 
7 
b. The written consent of all mortgagees to the deletion from the Registry is obtained. 
8 
If the de-registration of the vessel is obligatory in accordance with the preceding section, 
, 
9 
all holders of registered mortgages shall be notified by the Maritime Industry Authority of the 
10 
pending de-registration in order to enable such holders to take appropriate action to protect their 
11 
respective interests. If the consent of the holders is not obtained, deregistration shall not be 
12 
implemented earlier than three (3) months after notice to such holders of registered mortgages is 
13 
given. 
14 
SEC. 39. Suspension of a Ship's Registry. - The registration of a vessel which has been 
15 
bareboat chartered out to a non-Philippine national shall be suspended for the duration of the 
16 
bareboat charter. However, a ship which has been bareboat chartered out to a non-Philippine 
17 
national shall continue to be subject to Philippine law for all transactions affecting the sale, 
18 
transfer, mortgage, encumbrance or other disposition of the vessel, the enforcement of any lien 
19 
or claim against the vessel, or any other transaction affecting the private rights of the owner of 
20 
the vessel. 
21 
SEC. 40. Documents Required in Order Suspending Registration. - The ship owner shall 
22 
be required to submit the following documents to effect the suspension of such registration: 
23 
a. A written request to suspend die ship's registration; 
24 
b. A notarized copy of the bareboat charter; 
25 
c. The original certificate of registry; 
23 


1 
d. The original radio station license; and 
2 
e. A certification from the appropriate agency showing that all outstanding taxes, fees and 
3 
charges due to the government have been paid. 
4 
Chapter 6 
5 
Operation of Vessels 
6 
SEC. 41. Ship Construction. Every new building registered under Philippine laws shall be 
7 
constructed in accordance with standards for ship construction set forth in international maritime 
8 
conventions and implemented through government regulations. Ship construction shall be under 
9 
the supervision of the Philippine Coast Guard or a classification society appointed by the ship 
10 
owner. The classification society shall oversee the construction of the ship and ensure chat the 
11 
construction regulations provided in international maritime conventions and those issued by the 
12 
Philippine Coast Guard covering the structural strength and integrity of all parts of the ship's hull 
13 
and its appendages as well as the safety and reliability of the main propulsion, steering systems 
14 
and auxiliary systems of he ship are followed. 
15 
SEC. 42. Navigation and Communication Equipment. - Every Philippine flag vessel shall 
16 
have on board such navigation and communication equipment and apparatus required by 
17 
international maritime convention for the safe navigation of ships. Every equipment and 
18 
apparatus that shall be required to be installed on board shall be suited for the type, tonnage, 
19 
power, means of propulsion and trading limitations of the particular ship. 
20 
SEC. 43. Equipment to Prevent Marine Pollution. - Every Philippine flag vessel shall 
21 
have on board equipment and apparatus to prevent, reduce, or control pollution to die marine 
22 
environment emanating from ships. Every equipment and apparatus required to be installed on 
23 
board shall be suited for the type, tonnage, power, means of propulsion and trading limitations of 
24 
the particular ship. 
24 


1 
SEC. 44. Inspections and Surveys. - To ensure the proper maintenance of the ship's hull, 
2 
machinery and equipment, its through-life compliance with international conventions and 
3 
government regulations, and its safe operation, every Philippine flag vessel shall be subject to 
4 
periodic inspections and surveys. 
5 
SEC. 45. Scope of Inspections and Surveys, - The inspections and surveys shall be 
6 
conducted in accordance with international maritime conventions and government regulations, 
7 
and shalf include, but shall not be limited to, an inspection and survey of the ship's: 
8 
a. Hull structure; 
9 
b. Machinery and equipment; 
10 
c. Life-saving equipment; 
11 
d. Fire-fighting equipment; and 
12 
e. Radio and communications installations. 
13 
SEC. 46. Extent of Authority of Marine Surveyor or Classification Society, - The 
14 
Philippine Coast Guard, in appointing a marine surveyor or classification society to conduct the 
15 
inspection and survey of ships, shall inform the marine surveyor or classification society of the 
16 
specific responsibilities and conditions of the authority delegated to it. 
17 
SEC. 47. Issuance of Certificates. - The marine surveyor or classification society, 
18 
pursuant to the functions delegated to it by tbe Philippine Coast Guard, shall have the authority 
19 
to issue vessel certificates to every Philippine flag vessel and for this purpose, the vessel 
20 
certificates issued by such marine surveyor or classification society shall be deemed to have met 
21 
the requirements of this Act. Copies of the vessel certificates shall be submitted to the Philippine 
22 
Coast Guard which shall, upon verification of compliance, issue a certificate of inspection in 
23 
favor of the' complying vessel confirming the findings of the marine surveyor or classification 
24 
society .. 
25 


1 
SEC. 48. Availability of Vessel Certificates. - The vessel certificates mentioned in the 
2 
immediately preceding section shall be readily available on board the vessel for examination 
3 
at all times. 
4 
Chapter 7 
5 
Manning Requirements 
6 
SEC. 49. Citizenship of crew. - Every member of the crew of a coastwise or seagoing 
7 
vessel shall be a citizen of the Philippines. An exemption from this requirement may be obtained 
8 
from the Philippine Coast Guard upon written application from the ship owner or operator and 
9 
proof that no Philippine citizen is qualified for the position or is willing to serve on board the 
10 
vessel, This exemption shall not be granted to ships engaged purely in coastwise trade. 
11 
SEC. 50. Crew Competence. - Every member of the crew of a Philippine flag vessel shall 
12 
possess the 'appropriate certificate of competency setting forth his competence to serve in the 
13 
capacity ·and perform the functions involved at the level of responsibility, for the position held, 
14 
for the type, tonnage, power, means of propulsion, and trading limitations of the ship concerned. 
15 
The certificate of competency, as well as any endorsements thereto and any renewals thereof, 
16 
shall be issued by the Professional Regulations Commission. The certificate of competency shall 
17 
attest to the fact that the seafarer to whom it is issued meets the requirements for service, age, 
18 
medical fitness training, qualification, and examinations for the position held. 
19 
Chapter 8 
20 
Insurance and Other Indemnity Cover 
21 
SEC. 51. Insurance and Indemnity Cover. - Every ship owner or bareboat charterer shall 
22 
be required to maintain adequate insurance coverage or protection and indemnity coverage to 
26 


1 
meet the financial responsibility for any liability which such ship owner or bareboat charterer 
2 
may incur for loss of or injury to human life and/or damage to environment. 
3 
Chapter 9 
Enforcement 
4 
5 
SEC. 52. Report of any Incident Involving a Philippine Registered Ship. - When any 
6 
Philippine flag vessel sustains an accident or causes any incident involving the loss of life, 
7 
material loss of property, or serious injury to any person, or receives any damage affecting her 
8 
seaworthiness or her efficiency, or if it should cause any pollution or damage to the marine 
9 
environment, regardless of where such accident or incident may occur, the ship owner, ship 
10 
operator, bareboat charterer, ship manager, agent or master of such vessel shall immediately, 
11 
after the occurrence of the accident or incident, send a report of the accident or incident to the 
12 
Philippine Coast Guard detachment nearest the place of the accident or incident or, in the case of 
13 
seagoing vessels, to the Philippine Coast Guard Headquarters in the port of Manila, stating: 
14 
a. The mine of the vessel; 
15 
b. The port from which the vessel belongs; 
16 
c. The place where the incident occurred; 
17 
d. The nature and probable cause ofthe incident; 
18 
e. The number and names of those who perished; and 
19 
f. The estimated amount of loss or damage to the vessel, the cargo or the marine environment. 
20 
The ship owner, ship operator, charterer, ship manager, agent or master may be required to 
21 
furnish such,other information as shall be called for. 
22 
SEC. 53. Investigation of the Accident or Incident. - Immediately upon receipt of the 
23 
report, the Philippine Coast Guard shall convene the Board of Marine Inquiry so that an 
24 
investigation into the accident or incident can be conducted. The investigation of the accident or 
25 
incident shall follow the rules of procedure of the Board of Marine Inquiry: 
27 


1 
SEC. 54. Investigation Report. - Upon completion of the investigation, the Board of 
2 
Marine Inquiry shall prepare an investigation report setting forth the findings of fact gathered 
3 
from the investigation and recommend the filing of appropriate administrative, civil or criminal 
4 
charges against the offender. If it should be determined by the Board of Marine Inquiry that the 
5 
offender is a now Philippine national, it may request, through proper diplomatic channels, the 
6 
assistance of any other State to clarify the circumstances surrounding the accident or incident so 
7 
that corresponding charges may be brought against the offender. 
8 
SEC. 55. Filing of Charges. - Upon completion of the investigation and the preparation 
9 
of the report, the Board of Marine Inquiry shall take steps to initiate administrative, civil or 
10 
criminal action, as may be proper in the circumstances, against the offending parties; Provided, 
11 
That should'the investigation and report indicate that there are government officials who had 
12 
been negligent in the performance of their functions, the Board of Marine Inquiry shall 
13 
immediately transmit its findings to the Office ofthe Ombudsman for proper action. 
14 
Title III 
15 
Ship Mortgages 
16 
Chapter 1 
17 
Creation of the Ship Mortgage 
18 
SEC. 56. Application. - The provisions of this Title shall be applicable to: 
19 
a. Vessels entered in the Registry; 
20 
b. Vessels under construction that are provisionally entered in the Registry; 
21 
c. Mortgaged vessels belonging to a foreign flag whose mortgage is sought to be enforced under 
22 
Philippine law. 
23 
SEC. 57. Requisites for a Valid Mortgage Constituted under Philippine Law. - The 
24 
following requisites are essential for a ship mortgage to be validly created under Philippine law: 
25 
a. It is executed to secure the fulfillment of a valid principal obligation; 
26 
b. The mortgagor is the registered owner ofthe vessel to be mortgaged; 
28 


1 
c. The vessel sought to be mortgaged is registered under Philippine law; 
2 
d. The mortgagor has free disposal of the ship being mortgaged, or is legally authorized for the 
3 
purpose. 
4 
A mortgagor may execute a ship mortgage in order to secure the fulfillment of the 
5 
principal obligation of another. 
6 
SEC. 58. Subject Matter of a Mortgage. - The following property may be the subject 
7 
matter of a ship mortgage under Philippine law: 
8 
a. A vessel entered in the Registry; and 
9 
b. A vessel under construction provisionally entered in the Registry. 
10 
Subject to die terms of the contract, a mortgage of a vessel shall include all property of 
11 
the mortgagor which is appropriated to the vessel and on board at the time the ship mortgage 
12 
contract is entered into, or that which is later substituted for such property, 
13 
In the case of a mortgage with respect to a vessel under construction, the mortgage shall include 
14 
all materials, machinery and equipment which the mortgagor has provided and are within the 
15 
premises of the shipbuilder's yard and are distinctly identified in the mortgage contract as 
16 
intended to be incorporated into the ship under construction. 
17 
Chapter 2 
18 
Formal Validity 
19 
SEC. 59. Formal Validity of Ship Mortgages. - A ship mortgage created under Philippine 
20 
law shall not be valid and enforceable except as between the parties to the contract unless: 
21 
a. It is executed in a public instrument; 
22 
b. It is recorded in the office of the Maritime Industry Authority where the vessel is registered; 
23 
and 
24 
c. The mortgage is annotated on the certificate of Philippine registry of the vessel. 
29 


1 
SEC. 60. Registration of Mortgages. - Every ship mortgage created under Philippine law 
2 
shall be registered with, and tlie application for registration of the ship mortgage shall be 
3 
submitted to, the Maritime Industry Authority together with: 
4 
a. A notarized copy or authenticated copy of the mortgage contract showing: 
5 
(i) The name and description of the vessel being mortgaged; 
6 
(ii) The name, and place of residence of the owner ofthe vessel; 
7 
(iii) The name of the principal obligor whose obligation is being secured; 
8 
(iv) The name and address of the mortgagee; 
9 
(v) The dat~ of the mortgage contract; 
10 
(vi) The amount secured by the mortgage or the maximum amount for which the mortgage is 
11 
constituted; and 
12 
(vii) The maturity date of the principal obligation. 
13 
b. The power of attorney, partnership resolution or board resolution authorizing the execution 
14 
and registration of the mortgage; and 
15 
c. The certificate of Philippine registry or the provisional certificate of Philippine registry of the 
16 
vessel. 
17 
The Maritime Industry Authority may require the submission of such other documents needed to 
18 
support the application for registration. If the ship is outside Philippine territory, the application 
19 
for the registration of the mortgage and its supporting documents may he submitted by the ship 
20 
owner to the nearest Philippine consular office which shall then have the duty to forward the 
21 
documents to the offices of the Maritime Industry Authority in the port of Manila. 
22 
SEC. 61. Annotation of Mortgages. - Upon receipt of the application for the registration 
23 
of the mortgage together with all supporting documents, the Maritime Industry Authority shall 
24 
enter the mortgage in the Registry and annotate the same on the vessel's certificate of Philippine 
25 
registry or provisional certificate of Philippine registry. Ifthe ship is outside Philippine territory, 
26 
the Philippine consular officer concerned, upon the direction of the Maritime Industry Authority, 
30 


1 
shall cause the annotation of the mortgage on the vessel's certificate of Philippine registiy or 
2 
provisional certificate of registry, as the case may be. 
3 
SEC. 62. Posting of the Notice of Mortgage. - Upon entry of the mortgage in the 
4 
Registry, the Maritime Industry Authority shall issue to the mortgagor two (2) official copies 
5 
of the notices evidencing the entry of the mortgage in the Registry, The mortgagor, upon of the 
6 
copies of the notices shall take steps to exhibit one (I) original copy of the notice in a prominent 
7 
place on board the ship together with an authenticated copy of the certificate of Philippine 
8 
registry. Failure to exhibit the notice as required in this section shall not affect the validity of 
9 
the mortgage but the Maritime Industry Authority shall penalize the mortgagor for its omission. 
10 
Chapter 3 
11 
Ranking of Mortgages 
12 
SEC. 63. Ranking of Mortgages. - The ranking of mortgages as between themselves shall 
13 
be determined by the order in time in which-the successive mortgages are entered in the Registry. 
14 
A mortgage registered prior in time shall have preference over those registered later in time. 
15 
Chapter 4 
16 
Release of Mortgages 
17 
SEC. 64. Extinguishment of Mortgages. - The mortgage shall be. extinguished through 
18 
any of the following reasons: 
19 
a. Fulfillment or other discharge of the principal obligation; 
20 
b. Loss or destruction of the ship mortgaged; 
21 
c. Deletion of the vessel from the Registry; 
22 
d. Enforcement of the mortgage through the judicial or extra-judicial sale of the vessel; 
31 


1 
e. Other causes that may give rise to the extinction of either the principal or the mortgage 
2 
obligation. 
3 
SEC. 65. Enforcement of the Mortgage through the Sale or Foreclosure of the Vessel. - A 
4 
mortgagee shall be entitled to foreclose the ship mortgage if: 
5 
a. The principal obligor has failed to fully discharge its obligation; 
6 
b. The mortgagor or any person in possession of the vessel has substantially prejudiced the 
7 
security; 
8 
c. The mortgagor is in material breach of its obligations under the mortgage contract and, by the 
9 
terms of such contract, the mortgagee would be entitled to foreclose the security. 
10 
SEC. 66. Sale of Mortgaged Vessels at Public Auction. - A vessel subject of a mortgage 
11 
which is entered in the Registry may be sold extra-judicially through a public auction in 
12 
accordance with the provisions of the Chattel Mortgage Law, Act No. 1508 as amended, 
13 
provided that: 
14 
a. The mortgagor is a Philippine national; 
15 
b. Philippine law is made applicable to the mortgage; and 
16 
c. The mortgage is sought to be enforced in accordance with Philippine law. 
17 
Upon the vessel's sale at public auction and a record of such sale is entered in the 
18 
Registry of Ships, the mortgagee shall immediately be entitled to take actual or constructive 
19 
possession of the vessel. The right to proceed against the vessel extra-judicially provided in this 
20 
section does not preclude the mortgagee from proceeding against the ship directly through a 
21 
judicial attachment leading to a sale at public auction in accordance with the provisions set forth 
22 
the Rules of Court. 
23 
SEC: 67. Sale of Mortgaged Vessels through Judicial Proceedings. - Any mortgage 
24 
constituted under Philippine law or under any foreign law covering any vessel found within the 
25 
territory of the Philippines regardless of registry, which is not covered by the provisions of the 
32 


1 
immediately preceding section, shall be recovered only by proceeding against the ship directly 
2 
through an arrest by judicial attachment leading to a sale at public auction filed with the court of 
3 
appropriate jurisdiction in any port of the Philippines where the vessel may be found. Judicial 
4 
proceedings and the service of process shall be in accordance with the procedure set forth in the 
5 
Rules of Court. Upon issuance of the order of arrest against the vessel, the mortgagee shall 
6 
immediately be entitled to take actual or constructive possession of the vessel. This provision 
7 
shall be applicable to all vessels found within the territorial jurisdiction of the Philippines 
8 
regardless of its registry, the nationality of the mortgagor, mortgagee or principal obligor, and 
9 
the law under which the mortgage contract has been created. 
10 
SEC. 68. Effect of sale. - The enforcement of a mortgage through the sale of the vessel 
11 
whether judicially or extra-judicially shall release the mortgage and cause the transfer of 
12 
ownership of the vessel from the mortgagor to the purchaser of the vessel at foreclosure, If 
13 
the. vesse 1 sold is entered in the Registry and the purchaser is not qualified to maintain the 
, 
14 
vessel's registration, the Maritime Industry Authority shall cause the deletion of such registration 
15 
and require the purchaser to transfer the vessel's registration to another registry. 
16 
SEC. 69. Collection of the Deficiency or Return of the Excess. - If the value of the 
17 
secured obligation exceeds the foreclosure price of the vessel, the mortgagee shall be entitled to 
18 
collect the deficiency from the principal obligor by filing an action in a court of appropriate 
19 
jurisdiction for the recovery of such deficiency. 
20 
If the foreclosure price of the vessel exceeds the value of the secured obligation, the 
21 
mortgagee shall hold the excess in trust for the mortgagor and shall return the same to the 
22 
mortgagor. 
23 
An appraisal of the vessel by a qualified marine appraiser shall be conducted by the 
24 
mortgagee prior LO the extra-judicial foreclosure of the vessel. The appraisal made shall be the 
25 
basis for determining the foreclosure price of the vessel. 
33 


1 
SEC. 70. Distribution of the Proceeds of the Sale of a Mortgaged Vessel. -- Proceeds of 
2 
the sale of a mortgaged vessel whether sold extra-judicially in accordance with section 66 
3 
judicially in accordance with section 67 shall be distributed to first satisfy the maritime claims 
4 
stated in sections 72, 74 and 76 of this Act before the satisfaction of any obligation arising from 
5 
any registered mortgage. 
6 
Title IV 
7 
Maritime Claims and Liens 
8 
Chapter I 
9 
Maritime Claims and the Creation of Liens 
10 
SEC. 71. Application. - The provisions of this Title shall apply to all Philippine flag 
11 
vessels or foreign flag vessels against which a maritime claim shall be enforced. 
12 
SEC. 72. Creation of Maritime Liens. - Each of the following claims against the ship 
13 
owner, bareboat charterer, manager or operator of a vessel shall be secured by a maritime lien 
14 
against the vessel: 
15 
a. Claims for wages and other sums due to the Master, officers and other members of the vessel's 
16 
complement in respect of their employment on the vessel including the cost of repatriation and 
17 
social insurance contributions payable on their behalf; 
18 
b. Claims for loss of life or personal injury occurring whether on land or on water in direct 
19 
cOlmection with the operation of the vessel. 
20 
c. Claims for reward for the salvage of the vessel; 
21 
d. Claims for port, canal, and other waterway dues, and pilotage dues; 
22 
Claims based on tort arising out of physical loss or damage caused by the operation of the 
23 
vessel other than loss of or damage to cargo, containers, and passengers 
24 
e. effects carried on the vessel. 
34 


1 
Chapter 2 
2 
Priority of Liens 
3 
SEC. 73. Priority of Maritime Liens. - Maritime liens set forth in section 72 shall have 
4 
priority over all registered mortgages and no other claim shall take priority over such maritime 
5 
liens or registered mortgages except the following: 
6 
a. Judicial costs and expenses arising out of the arrest and subsequent judicial sale of the vessel, 
7 
including the costs for the upkeep of the vessel and the crew, their wages, cost of repatriation and 
8 
social insurance contributions payable on their behalf incurred during the period of arrest or 
9 
attachment; 
10 
b. The cost of removal incurred by the government in the interest of safe navigation or the 
11 
protection o'f the marine environment when the judicial sale pertains to a stranded or sunken 
12 
vessel.. 
13 
SEC. 74. Shipbuilder's or Ship Repairer's Right of Retention. - A shipbuilder or ship 
14 
repairer shall have the right to retain a vessel until it obtains full satisfaction of all obligations 
15 
due to it. This right of retention shall be extinguished when the vessel ceases to be in the 
16 
possession of the shipbuilder or ship repairer. The right of retention shall not be extinguished if: 
17 
a. An order has been issued for the arrest or seizure of, and the same has been served on, such 
18 
vessel: 
19 
b. The surrender of possession is required pursuant to the provisions of the next succeeding 
20 
section. 
21 
SEC. 75. Sale of Vessel which is Subject to a Shipbuilder's or Shop Repairer's Right of 
22 
Retention. - If a shipbuilder or ship repairer is in the possession of the vessel at the time of its 
23 
judicial sale, the shipbuilder or ship repairer shall be required to surrender the vessel to the 
24 
purchaser at public auction. The shipbuilder or repairer shall, however, enjoy a preference and be 
35 


1 
entitled to the settlement of its claim after the satisfaction of all claims listed in Sections 72 and 
2 
73. 
3 
SEC. 76. Other Rules Affecting the Prioriv of Maritime Liens. - The provisions of section 
4 
73 setting forth the priority of maritime liens shall be subject to the following additional rules: 
5 
a. Maritime liens securing a claim for reward for the salvage of a vessel shall take priority over 
6 
all other maritime liens provided in section 72 where such maritime liens have arisen and 
7 
attached to the vessel prior in time to the salvage operations performed; 
8 
b. Maritime liens securing claims for reward for the most recent salvage of the vessel shall rank 
9 
take priority among other salvage operations that occurred on earlier dates; 
10 
c. Maritime claims for reward for the salvage of the vessel shall be deemed to have accrued on 
11 
the date when each salvage operation was terminated; 
12 
d. Maritime liens set forth in subsections (a), (b), (d) and (e) of section 72 shall rank equally as 
13 
amongst themselves. 
14 
e. The action in personam against the ship owner, ship operator, bareboat charterer or ship 
15 
manager for the satisfaction of the maritime claim shall survive if the proceeds of the sale are 
16 
insufficient to satisfy all claims. 
17 
SEC. 77. Effect of Any Voluntary Sale or Transfer of Ownership of the Vessel. - The 
18 
voluntary sale or transfer of a ship which is subject to a maritime lien shall not extinguish the 
19 
maritime lien, ownership, registry, or flag. Maritime liens shall follow the ship, notwithstanding 
20 
any change of 
21 
Chapter 3 
22 
Extinguishment 'of Liens 
23 
SEC. 78. Extinguishment of Maritime Liens. - Maritime liens shall be extinguished after 
24 
one year unless the vessel to which it attaches has been subject to an arrest which leads to its 
25 
judicial sale. 
36 


1 
The one-year period shall be counted as follows: 
2 
a. In the case of crew wages, from the time of the claimant's discharge from the vessel; 
3 
b. In the case of other maritime liens, from the time when the claims arise. 
4 
The one-year period shall not be subject to suspension or interruption except when the 
5 
arrest or attachment of the vessel is not permitted by law. 
6 
SEC. 79. Assignment of or Subrogation to a Maritime Claim. - The assignment of a 
7 
maritime claim by a claimant, or the subrogation of a third party to the rights of a claimant to a 
8 
maritime cl!\im, shall entail the simultaneous assignment of, or subrogation to, the maritime lien 
9 
securing stich claim. However, any claimant holding a maritime lien may not be subrogated to 
10 
compensation payable to the owner of a vessel arising from an insurance contract. 
11 
Chapter 4 
12 
Enforcement cifLiens 
13 
SEC. 80. Enforcement of Maritime Liens. - The maritime liens provided in section 72 
14 
which attach to any vessel found within the territory of the Philippines shall be enforced by 
15 
proceeding against the ship directly through a judicial action leading to a sale at public auction 
16 
filed with the court of appropriate jurisdiction in any port of the Philippines where the vessel 
17 
may be found. Judicial proceedings and the service of process shall be in accordance with the 
18 
procedure set forth in the Rules of Court. This provision shall be applicable to all vessels found 
19 
within the territorial jurisdiction of the Philippines regardless of its registry, the nationality of the 
20 
claimant and the law under which the maritime lien has been created. 
21 
SEC. 81. Effect of the judicial Sale of a Vessel. -Any judicial sale of the vessel shall 
22 
extinguish all maritime liens and encumbrances attaching to the vessel as well as all registered 
23 
mortgages; Provided, that the vessel is within the territorial jurisdiction of the Philippines at the 
24 
time of the judicial sale and the sale has been made in accordance with the provisions of this Act. 
37 


1 
SEC. 82. Disposition of the Proceeds of the Sale of the Vessel Subject to a Maritime Lien. 
2 
- The proceeds of the judicial sale of a vessel shall be distributed to first satisfy the liens listed in 
3 
Sections 72, 73 and 75 of this Act before the sati~faction of any obligation arising from any 
4 
registered mortgage created in accordance with Section 59, or any maritime claim provided in 
5 
Section 87 hereof. Any amount left over from the proceeds of sale of the vessel shall be held in 
6 
trust for the ship owner, ship operator, bareboat charterer, or ship manager. 
7 
SEC. 83. Rights of a Purchaser at Judicial Sale. - The purchaser at the judicial sale of the 
8 
vessel shall have the right to request the officer of the court conducting the sale to issue a 
9 
certificate to the effect that the vessel is sold free from all registered mortgages, or charges, 
10 
except those assumed by the purchasers, and all other liens and encumbrances that may have 
11 
attached to the vessel as of the date of the judicial sale. 
12 
The Maritime Industry Authority, with respect to Philippine flag vessels, shall be obliged 
13 
to: 
14 
a. Delete all registered mortgages and charges on the basis of the certificate issued by the officer 
15 
of the court conducting the sale except those assumed by the purchaser; and 
16 
b. Issue a new certificate of registration to the purchaser or to de-register the vessel for purposes 
17 
of new registration in another State. If the vessel belongs to a foreign registry, the officer of the 
18 
court conducting the sale of the vessel shall issue the certificate stipulated in the first paragraph 
19 
of this section in such form and substance as may be required by the foreign registry to: 
20 
a. Delete all registered mortgages in that registry; and 
21 
b. Issue a new celiificate of registration to the purchaser or to de-register the vessel for purposes 
22 
of a new registration in another State. 
23 
Title V 
24 
Arrest of Vessels 
25 
Chapter I 
26 
General Provisions 
38 


1 
SEC. 84. Application. - The provisions of this Chapter shall apply to all Philippine flag 
2 
vessels and to foreign flag vessels found within the territory of the Philippines, for which an 
3 
order of arrest has been issued by a Philippine court. 
4 
SEC. 85. Exceptions. - The provisions of this Chapter shall not prejudice the right of any 
5 
person, whether natural or juridical, to proceed against the ship owner, ship operator, bareboat 
6 
charterer or ship manager for any of the claims set forth in section 88 of this Act through an 
7 
action in personam. 
8 
SEC. 86. Right to Detain a Ship. - The provisions for the arrest of ships under this 
9 
Chapter shall not affect the powers vested in the Philippine Coast Guard, Philippine Navy, 
10 
Philippine Ports Authority, Bureau of Customs or other government agency to detaill any ship 
11 
under any Philippine law or international convention or any regulation issued pursuant to such 
12 
law or international convention. 
13 
Chapter 2 
14 
Right of Arrest 
15 
SEC. 87. Maritime Claims Giving Rise to the Right of Arrest. - A claimant asserting any 
16 
of the following maritime claims may enforce his claim directly against a vessel by seeking its 
17 
arrest through an attachment by judicial action and asking the court of appropriate jurisdiction 
18 
for its sale in order to secure the satisfaction of such claim: 
19 
a. Loss OL damage caused by the operation of the ship; 
20 
b. Loss of life or personal injury occurring whether on land or on water in direct connection with 
21 
the operation of the ship; 
, 
22 
c. Salvage operation or any salvage agreement, including, if applicable, special compensation 
23 
relating tb salvage operations in respect of a ship which by itself or its cargo threatened damage 
24 
to the environment; 
39 


1 
d. Damage or threat of damage caused by the ship to the environment, coastline or related 
2 
interest; or measures taken to prevent, minimize, or remove such damage; or compensation for 
3 
such damage; costs of reasonable measures of reinstatement of the environment actually 
4 
undertaken or to be undertaken; loss incurred or likely to be incurred by third parties III 
5 
connection with such damage; and damage, costs, or loss of a similar nature to the foregoing: 
6 
e. Costs or expenses relating to the raising, removal, recovery, destruction or the rendering 
7 
harmless of a ship which is sunk, wrecked, stranded or abandoned, including anything that is or 
8 
has been on board such ship, and costs or expenses relating to the preservation of an abandoned 
9 
ship and maintenance of its crew; 
10 
f. Any agreement relating to the use or hire of the ship, whether contained in a charter party or 
11 
otherwise; 
12 
g. Any agreement relating to the carriage of goods or passengers on board the ship, whether 
13 
contained in a charter party or otherwise; 
14 
h. Loss of, or damage to, or in connection with goods, including luggage, carried on board the 
15 
ship; 
16 
i. Genenil average; 
17 
j. Towage; 
18 
k. Pilotage; 
19 
1. Goods, materials, provisions, bunkers, equipment, including containers, supplied or services 
20 
rendered to the ship for its operation, management, preservation or maintenance; 
21 
m. Construction, reconstruction, repair, conversion, or equipment of the ship; 
22 
n. Port, canal, dock, harbor and other waterway dues and charges; 
23 
o. Wages and other sums due to the master, officers and other members of the ship's complement 
24 
in respect of their employment on the ship, including costs of repatriation and social insurance 
25 
contributions payable on their behalf; 
26 
p. Disbursements incurred on behalf of the ship or its owners; 
27 
q. Insurance premiums, including mutual insurance calls, in respect of the ship, payable by or on 
28 
behalf of the ship owner, ship operator, bareboat charterer, or ship manager; 
40 


1 
r. Any commissions, brokerages or agency fees payable in respect of the ship by or on behalf of 
2 
the ship owner, ship operator, bareboat charterer, or ship manager; 
3 
S. Any dispute as to ownership or possession of the ship; 
4 
t. Any dispute between co-owners of the ship as to the employment or earnings of the ship; 
5 
u. Any m'ortgage or charge of the same nature on the ship; and 
6 
v. Any dispute arising out 0 fa contract for the sale of the ship. 
7 
The procedure for the issuance of the order of arrest and the service of process upon the vessel, 
8 
its owner, bareboat charterer, manager, operator, or any person acting on its behalf, shall be 
9 
made in accordance with the provisions of the Rules of Court. The distribution of the proceeds of 
10 
any judicial sale undertaken to satisfy the maritime claims set forth in this section shall be made 
11 
subject to the provisions of section 83. 
12 
SEC. 88. Reason for the Arrest. - The court may order the arrest of a vessel for the 
13 
purpose of obtaining security for the enforcement of a maritime claim set forth in the preceding 
14 
section regardless of where such maritime claim may have arisen and what the nationality of the 
15 
ship is against which the maritime claim is being enforced. The arrest shall be made 
16 
notwithstanding the existence of a jurisdiction clause or arbitration clause in the contract giving 
17 
rise to the claim providing that the maritime claim for which the arrest has been made is to be 
18 
adjudicated or arbitrated in a State other than the Philippines, or adjudicated in accordance with 
19 
the law of that State. 
20 
SEC. 89. Exercise of the Right of Arrest. - The court may order the arrest of any 
21 
Philippine flag vessel or foreign flag vessel against which a maritime claim is asserted if: 
22 
a. The person who owned the ship at the time the maritime claim arose is liable for the claim, 
23 
and is still the owner of the ship at the time when the arrest is effected; or 
24 
b. The bareboat charterer of the ship at the time when the maritime claim arose is liable for the 
25 
claim, and is still the bareboat charterer or owner of the ship when the arrest is effected; or 
26 
c. The maritime claim on the ship is based upon a mortgage or charge of a similar nature; or 
41 


1 
d. The maritime claim relates to the ownership or possession of the ship; or 
2 
e. The maritime claim is made against the ship owner, ship operator, bareboat charterer, or ship 
3 
manager and is secured by a maritime lien under Section 72 hereof. 
4 
SEC. 90. Arrest of a Related Vessel -The court may also order the arrest of any other ship 
5 
which when the arrest is effected, is found within the territory of the Philippines and is owned by 
6 
the same person liable for the maritime claim and who, at the time the claim arose, was the ship 
7 
owner, ship operator, bareboat charterer, or ship manager of the vessel in respect of which the 
8 
claim has arisen. The arrest of a related vessel will not be allowed when the maritime claim 
9 
sought to be enforced relates to the ownership or possession of the ship. 
10 
SEC 91. Arrest ofa Vessel that has been Transferred to Another Parry. -The arrest ofa 
11 
ship which is not owned by the person liable for the claim shall be permissible only if a final 
12 
judgment on the maritime claim has been issued by a Philippine court and such judgment can be 
13 
enforced against that ship through its judicial sale. 
14 
Chapter 3 
15 
Release from Arrest 
16 
SEC. 92. Release from Arrest: Posting of a Bond or other Security. - A ship which has 
17 
been arrested shall be released from arrest when a bond or ocher sufficient security, which the 
18 
court has determined to be necessary for the preservation of the rights of the parties, has been 
19 
provided by the ship owner, ship operator, bareboat charterer, ship manager or any other person 
20 
acting on its behalf. In cases involving any dispute between co-owners of the ship as to the 
21 
employment or earnings of the ship, or arising from the ownership or possession of the ship, the 
22 
court may in its discretion determine whether to require a bond or other security before 
23 
permitting the person in possession of the ship to continue trading with the ship or to otherwise 
24 
deal with the operation of the ship during the period of the arrest. 
42 


1 
SEC: 93. Amount of Bond or other Security. - The parties may agree to the form and 
2 
amount of the bond or other security for the release of the ship and submit their agreement to the 
3 
court. In the absence of any agreement between the parties as to the sufficiency and form of the 
4 
bond or other security, the court shall determine its nature and the amount thereof. For purposes 
5 
of determining the amount of the bond or other security, the same shall not exceed the amount of 
6 
the claim for which the ship has been arrested, or the value of the ship, or the applicable limit of 
7 
liability determined in accordance with Title VI, Chapter 2 of this Act, whichever is least. 
8 
SEC. 94. Place of Posting of the Bond or other Security. - The bond or other security for 
9 
the release of the vessel against which the claim is sought to be enforced shall be posted with the 
10 
court which issues the order for the arrest of the vessel. 
11 
SEC. 95. Release of the Bond or other Security Posted in a Philippine Court. - If a ship is 
12 
arrested by a foreign court for the same claim for which a bond or other security has already been 
13 
provided in a Philippine Court and against which its release has been obtained, the bond or other 
14 
security so provided in the Philippine court shall, at the discretion of such court, be released upon 
15 
application of the ship owner, ship operator, bareboat charterer or ship manager. 
16 
SEC. 96. Release of Excess Security. - If a ship has been released by a Philippine court on 
17 
the basis of a bond or other security posted with that court and the same ship is later arrested by a 
18 
foreign court for the same claim and is likewise subsequently released upon the provision of a 
19 
bond or other security posted, the bond or other security posted with the Philippine court shall, at 
20 
the court's discretion, be released to the extent that the total amount of the bond or other security 
21 
provided in the Philippine court and that provided in the foreign court combined exceeds the 
22 
claim for which the ship has been arrested., or the vaJue the ship, whichever is lower. 
23 
SEC. 97. Condition for the Release of Excess Security - The release of the bond or other 
24 
security provided in the immediately preceding section shall not he ordered by the Philippine 
43 


1 
court unless it is satisfied that the bond or other security posted in the foreign court shall actually 
2 
be available and be freely transferable to satisfy any judgment or order that may be issued in 
3 
favor of the claimant. 
4 
SEC. 98. Reduction, Modification or Cancellation of the Bond. - If a bond or other 
5 
security has been provided for the release of the ship, the person providing the bond or security 
6 
may, at any time, apply to the court to have that security reduced, modified or cancelled. The 
7 
court, in its discretion and upon a determination of the veracity of the claim filed, shall issue the 
8 
appropriate order retaining, reducing, modifying or canceling such bond or other security. 
9 
SEC. 99. No Presumption of Fault. - Any request for the ship to be released upon a bond 
10 
or other security being provided, or any application to limit liability made by the ship owner, 
11 
ship operator, bareboat charterer or ship manager shall not be construed as an acknowledgment 
12 
of liability or a waiver of any defense which may he pleaded against the claimant or a waiver of 
13 
any right to limit the liability of such ship owner, ship operator, bareboat charterer or ship 
14 
manager in accordance with the provisions of Title VI, Chapter 2 of this Act or of any other law 
15 
or international convention. 
16 
Chapter 4 
17 
Re-arrest, Multiple Arrest and 
18 
Arrest of Additional Vessel 
19 
SEC. 100. Rearrest or Multiple Arrest of a Ship. - If a ship has already been arrested and 
20 
released, or a bond or other security for its release has been provided in order to secure the 
21 
maritime claim sought to be enforced against that ship, the same ship shall not be rearrested 
22 
for the same maritime claim unless: 
23 
a. The nature or amount of the bond or other security already provided IS inadequate or 
24 
insufficient or has otherwise been prejudiced; or 
44 


1 
b. The person who has already provided the security will not, or is unlikely to, be able to fulfill 
2 
some or all of the obligations required; or 
3 
c. The ship arrested or the bond or other security previously provided was released upon 
4 
application or with the consent of the claimant acting on reasonable grounds and the maritime 
5 
claim sought to be enforced against the ship was not subsequently satisfied; 
6 
d. The claimant could not, despite taking reasonable steps, prevent the release of the ship, or the 
7 
bond or other security provided. 
8 
SEC. 101. Arrest oj Additional Vessel. - Any other ship owned by the ship owner, ship 
9 
operator, bareboat charterer or ship manager which would otherwise be subject to arrest in 
10 
respect of the same maritime claim shall not be arrested unless any of the conditions enumerated 
11 
in the immediately preceding section exists with respect to the vessel originally arrested. 
12 
Chapter 5 
13 
Security Against Arbitrary Arrest 
14 
For purposes of this section and that of the immediately preceding section, "release" shall 
, 
15 
not include the unlawful release or the escape from arrest of an arrested vessel. 
16 
SEC. 102. Claimant's Bond. - In order to protect the rights of the ship owner, ship 
17 
operator, bareboat charterer or ship manager from any unjustified, arbitrary, wrong or unlawful 
18 
arrest of its vessel or for permitting the continued arrest of its vessel, the .court may require the 
19 
claimant who seeks the arrest, or who has procured the arrest, of a vessel to provide a bond or 
20 
other security of a kind, for an amount, and upOll such terms, as may be determined by the 
21 
court. The bond or other security provided shall be used to cover any loss which may be incurred 
22 
by the ship owner, ship operator, bareboat charterer or ship manager as a result of any 
23 
unjustified, arbitrary, wrongful or unlawful arrest of its ship and for which the claimant may be 
24 
found liable. Such loss or damage shall include but shall not be limited to any loss or damage 
45 


1 
incurred by the ship owner, ship operator, bareboat charterer or ship manager arising from such 
2 
arrest, or from any excessive security which may have been demanded by the claimant, and 
3 
provided for by such ship owner, ship operator, bareboat charterer or ship manager. 
4 
SEC. 103. Determination of the Amount of the Claimant's Bond. - The court issuing the 
5 
order of arrest shall have jurisdiction to determine the extent of the liability of the claimant 
6 
which may arise from any loss or damage caused by the arrest of the ship and the amount of the 
7 
bond to be required shall depend upon such determination of liability. If a bond or other security 
8 
has been provided in accordance with this section, the claimant may ask at any time to have the 
9 
bond or other security reduced, modified or cancelled upon proof of the validity of the claim. 
10 
SEC. 104. Determination of Claimant Bond Pending Proceedings in a Foreign Court. - If 
11 
the disposition of the case on the merits for which the arrest has been effected lies with a foreign 
12 
court or with an arbitral tribunal, the Philippine court ordering the arrest of the vessel may delay 
13 
the determination of the extent of the claimant's liability which may arise from any loss or 
14 
damage that may be occasioned to the ship owner, ship operator, bareboat charterer or ship 
15 
manager because of the unjustified, arbitrary, wrongful or tribunal. 
16 
Chapter 6 
17 
Jurisdiction 
18 
SEC. 105. Jurisdiction of the Philippine Court on the Merits of the Case. - The 
19 
Philippine court, which has ordered the arrest of a vessel or has required the provision of a bond 
20 
or other security for the release of the ship, shall have jurisdiction to determine the case on its 
21 
merits. 
22 
SEC: 106. Transfer of Venue. - The parties may appear and adjudicate the claim before 
23 
the Philippine court exercising jurisdiction over the claim or, with leave of court, may mutually 
24 
agree to submit the dispute within an agreed period of time to the jurisdiction of a foreign court 
46 


1 
or to an arbitral tribunal which has jurisdiction over the claim. Such agreement of the parties on 
2 
the transfer of venue to a foreign court or arbitral tribunal shall be submitted to the Philippine 
3 
court to allow for the suspension of the proceedings. 
4 
SEC. 107. Right of the Court Not to Exercise Jurisdiction. - Upon receipt of the order, in 
5 
proper forum and substance, that a foreign court or arbitral tribunal has accepted jurisdiction 
6 
over the case, the Philippine court which has issued the order for the arrest of the vessel, or has 
7 
required the provision of a bond or other security to obtain the release of 19 the ship, may, in its 
8 
discretion, suspend the exercise of jurisdiction over the claim in favor of 20 the foreign court or 
9 
arbitral tribunal. 
10 
SEC. lOS. Transfer of the Case to a Foreign Court or Arbitral Tribunal. - If the 
11 
Philippine court, which has ordered the arrest of the vessel 01- has required the provision of a 
12 
bond or other security to obtain the release of the ship, refuses to exercise jurisdiction over the 
13 
claim in accordance with the provisions of section 106, the court shall, upon application of the 
14 
claimant; grant a period of time within which the claimant shall bring proceedings before a 
15 
competent foreign court or arbitral tribunal. If proceedings are not brought within the period of 
16 
time stipulated in the order, the ship arrested or the bond or other security provided, upon request 
17 
of the ship owner, ship operator, bareboat, charterer or ship manager, shall be ordered released 
18 
by the court. 
19 
Chapter 7 
20 
Recognition and Enforcement of Judgments 
21 
SEC. 109. Recognition of Foreign Judgments. - If proceedings are brought before a 
22 
foreign court of competent jurisdiction or an arbitral tribunal, any filial judgment or arbitral 
23 
award resulting from such proceedings shall be recognized and given full force and effect by the 
24 
Philippine court having custody of the arrested ship or the bond or other security provided for its 
47 


1 
release. The parties shall be required to submit to the Philippine court a copy of the final 
2 
judgment or arbitral award in such form and substance sufficient for its recognition and 
3 
enforcement under Philippine law. 
4 
SBC. 110. Conditions/or the Recognition o/the Foreign judgment. -The recognition of 
5 
such Final judgment or arbitral award shall be made on the condition that the ship owner, ship 
6 
operator, bareboat charterer or ship manager has been given reasonable notice of the proceedings 
7 
filed with the foreign court or arbitral tribunal, has had reasonable opportunity to defend itself in 
8 
such proceedings, and the filial judgment or arbitral award resulting from such proceedings is not 
9 
contrary to Philippine law, morals, public order or public policy, No further restriction shall be 
10 
imposed on the recognition and enforcement of such foreign judgment or arbitral award by the 
11 
Philippine court which ordered the arrest of the ship or for which the bond or other security has 
12 
been provided to obtain its release. 
13 
SEC. 111. Enforcement a/judgments. - A judgment rendered in favor of the claimant 
14 
whether by a Philippine Court or a foreign court or arbitral tribunal shall be enforced against 
15 
the vessel through its judicial sale, or against the bond or other security given as security for 
16 
the claim. 
17 
Title VI 
18 
Limitation of Liability for Maritime Claims 
19 
Chapter 1 
20 
Right to Limit Liability 
21 
SEC. 112. Application. - The following may invoke the right to limit their liability in 
22 
accordance with the rules provided for in this Title for the claims set out in the next succeeding 
23 
section: 
24 
a. Ship owners; 
48 


1 
b. Ship operators; 
2 
c. Bareboat charterers; 
3 
d. Ship managers; 
4 
e. Salvors with respect to claims set forth in subsections (d), ( e) and (f) of Section 
5 
113; 
6 
f. Any person whose act, neglect or default the ship owner, ship operator, bareboat charterer, 
7 
ship manager or salvor is responsible for; and 
8 
g. Insurers who assume the liability of any ship owner, ship operator, bareboat, charterer, ship 
9 
manager, or salvor. 
10 
SEC. 113. Claims which are Subject to Limitation. - The following claims made against 
11 
the persons set forth in the preceding section or against the ship, whatever the basis of liability 
12 
may be, shall be subject to the limitation of liability: 
13 
(a) Claims in respect of loss of life or personal injury, or loss of or damage to property, 
14 
including damage to harbor works, basins, waterways and aids to navigation, occurring on board 
15 
or in direct connection with the operation of the ship or with salvage operations and 
16 
consequential loss resulting therefrom; 
17 
(b) Claims in respect of loss resulting from delay in the carriage by sea of cargo, passengers or 
18 
their luggage; 
19 
(c) Claims in respect of other loss resulting from the infringement of rights, other than 
20 
contractual rights, occurring in direct connection with the operation of the ship or of salvage 
21 
operations; 
22 
(d) Claims in respect of loss or damage arising from the raising, removal, destruction .or the 
23 
rendering harmless of a ship which is sunk, wrecked or abandoned, including anything that is on 
24 
has been on board such ship; 
25 
( e) Claims in respect of loss or damage resulting from the removal, destruction or the rendering 
26 
harmless of the cargo of the ship; 
49 


1 
( f) Claims in respect of measures taken in order to avert or minimize loss for which the person 
2 
liable may limit his liability in accordance with this Title, and any further loss caused by such 
3 
measures. 
4 
SEC, 114. Right to Invoke Limit of liability. - The right to limit liability may be invoked 
5 
by the ship owner, ship operator, bareboat charterer, ship manager or salvor, against any claimant 
6 
in a judicial action who has sought the arrest of its vessel in order to enforce a claim which is 
7 
subject to limitation. 
8 
9 
SEC. 115. Claims Not Subject to Limitation. - The following claims shall not be subject 
10 
to any limitation of liability in accordance with this Title: 
11 
(a) Claims arising from the contract of salvage or from any salvage operation rendered in 
12 
accordance with relevant Philippine law on salvage or any applicable international salvage 
13 
convention, including any claim or special compensation payable under a contract of salvage, or 
14 
any contribution in general average; 
15 
(b) Claims for oil pollution damage and/or other environmental damage; 
16 
(c) Claims subject to any international convention governing or prohibiting the limitation of 
17 
liability for nuclear damage; 
18 
(d) Claims against the ship owner of a nuclear-ship for nuclear damage; 
19 
(e) Claims brought by employees against the ship owner, ship operator, bareboat charterer, ship 
20 
manager, or salvor, where the duties of such employees are connected with the ship or with the 
21 
salvage operations, as the case may be, or their heirs, successors, or assigns, if under the law 
22 
governing the contract of employment, the ship owner, ship operator, bareboat charterer, ship 
23 
manager, or salvor is not entitled to limit his liability in respect of such claims, if the law 
24 
governing the contract of employment permits a limit of liability greater than that provided for in 
25 
this Title. 
50 


1 
SEC. 116. Conduct Barring Limitation . . - Any ship owner, ship operator, bareboat 
2 
charterer, ship manager or salvor, or any person acting on their behalf, shall not be entitled to 
3 
limit liability if it is proven that the loss resulted from the personal act or omission of such ship 
4 
owner, ship operator, bareboat charterer, ship manager, or salvor, or any person acting on their 
5 
behalf, and such act or omission was committed with the intent to cause such loss, or it was done 
6 
negligently and with the lmowledge that such loss would probably result. 
7 
SEC. 117. Counterclaims; Right to Set off: - When a ship owner, ship operator, bareboat 
8 
charterer, ship manager, or salvor, who is entitled to limit his liability, has a counterclaim against 
9 
the claimant arising out of the same occurrence, their respective claims shall be set off against 
10 
each other and the limits of liability shall only apply to the balance of the claim, if any. The right 
11 
of set off can be invoked only if both parties are entitled to limit their respective liabilities and 
12 
their respective claims do not fall within the provisions of section 115 or 116 of this Act. 
13 
Chapter 2 
14 
Limits of Liability 
15 
SEC. 118. General Limits. - The general limits of liability for claims other than for 
16 
passenger claims, arising from any distinct occasion shall be calculated as follows: 
17 
(a) In respect of claims for loss of life or personal injury: 
18 
(i) 2,000,000 units of account for a ship with a tonnage not exceeding 2,000 tons; 
19 
(ii) For a ship with a tonnage in excess thereof, the following amount in addition 
20 
to that mentioned in (i); 
21 
For each additional ton from 2001 to 30,000 tons, 800 units of account; 
22 
For each additional ton from 30,001 to 70,000 tons, 600 units of account; 
23 
For each additional ton in excess of70,000 tons, 400 units of account 
24 
(b) In respect of any other claims: 
25 
(i) 1,000,000 units of account for a ship with a tonnage not exceeding 2,000 tons; 
51 


1 
(ii) For a ship with a tonnage m excess thereof the following amount m addition to that 
2 
mentioned in (i): 
3 
For each additional ton from 2001 to 30,000 tons, 400 units of account; 
4 
For each additional ton from 30,001 to 70,000 tons, 300 units of account; 
5 
For each additional ton in excess of 70,000 tons, 200 units of account. 
6 
The Maritime Industry Authority, with the approval of the Secretary of the Department of 
7 
Transportation and Communication, may by regulation revise the limits of liability provided for 
8 
in this section to align such limits with applicable international maritime conventions. 
9 
SEC. 119. Claims for LOSS of Life in Excess of the Stipulated Limit. - If the amount 
10 
calculated in accordance with subsection (a) of the preceding section is insufficient to pay in full 
11 
all the claims fur loss of life or personal injury, the amount calculated in accordance with 
12 
subsection (b) shall be available for the payment of the unpaid balance of the claims under 
13 
subsection (a). 
14 
In this case, the unpaid balance for claims for loss of life and personal injury shall rank 
15 
ratably with all other claims falling under subsection (b); Provided, however, That if there should 
16 
be any claim arising from damage to harbor works, basins and waterways, and aids to navigation, 
17 
these shall· be satisfied first before any other claim falling under subsection (b) are satisfied, 
18 
including any unsatisfied claims for loss oflife or personal injury 
19 
SEC. 120. Salvor's Limit of Liability when Not Operating of a Ship. - The limit of 
20 
liability for any salvor who is not operating from any ship or salvage tug, or who is operating 
21 
solely on the ship to, or in respect of, which he is rendering salvage services, shall be calculated 
22 
in accordance with the provisions of Section 118 of this Act applying a tonnage of 1,500 tons. 
23 
SEC. 121. Limit of Liability for Passenger Claims. - The limit of liability of a ship owner, 
24 
ship operator, bareboat charterer, or ship manager, for passenger claims relating to loss of life or 
25 
personal injury arising out of any distinct occasion, shall be an amount equivalent to 175,000 
52 


• 
1 
units of account multiplied by the number of passengers which the ship is authorized to carry 
2 
according to the ship's certificate. Claims for loss of life or personal injury to passengers of a 
3 
ship shall mean any such claims brought by or on behalf of: 
4 
a. Any person carried on the ship under a contract of passenger carriage; or 
5 
b. Any person carried on the ship who, with the consent of the master, is accompanying a 
6 
vehicle, or a shipment of live animals, or other cargo which is covered by a contract for the 
, 
7 
carriage of goods. 
8 
SEC. 122. Formulafor Converting the Unit of Account to Philippine Pesos. - The unit or 
9 
account mentioned in this Chapter shall be converted to Philippine pesos according to the value 
10 
of the Philippine peso 011 the date the limitation find is constituted, or payment is made, or 
11 
security is given. 'The equivalent value of the Philippine peso shall be calculated in accordance 
12 
with the method of valuation ap13Jied by the International Monetary Fund for its operations and 
13 
transactions in effect on the applicable date. 
14 
Sec. 123. Aggregation of Claims for Loss of Life and Personal Injury and for other 
15 
Claims. - The limits of liability for loss of life and personal injury and for other claims 
16 
determined in accordance with section 118 hereof shall apply to the aggregate of all claims 
17 
which arise 0 II any distinct occasion against: 
18 
a. The ship owner, ship operator, bareboat charterer, or ship manager and any person whose act, 
19 
neglect or default such ship owner, ship operator, bareboat charterer or ship manager is 
20 
responsible for; or 
21 
b. The ship owner, ship operator. bareboat charterer, or ship manager of a ship rendering salvage 
22 
services from a ship or the salvor or salvors operating from a salvage tug, and any person whose 
23 
act, neglect or default the ship owner, ship operator, bareboat charterer, ship manager or salvor is 
24 
responsible for; or 
53 


1 
c. The salvor who is not operating from a ship or salvage tug or who is operating solely on the 
2 
ship to, or in respect of, which the salvage services are rendered and any person whose act, 
3 
neglect or default the salvor is responsible for. 
4 
Chapter 3 
5 
Limitation Fund 
6 
SEC. 124. Creation of a Limitation Fund - Any person entitled to limit his Iiabity in 
7 
accordance with Section 112 and who is alleged to be liable for a claim provided in Section 113 
8 
hereof may, at any time during the hearing of the case or after the arrest of his vessel, constitute a 
9 
fund with the court in which legal proceedings have been instituted for the satisfaction of the 
10 
claim subject to limitation. The fund shall be in an amount equivalent to the limits of liability set 
11 
forth in Sections 118, 120, or 121 hereof, as the case may be, together with any interest due 
12 
thereon from the date of the occurrence giving rise to the liability until the date of the creation of 
13 
the fund. The total amount of the fund shall be subject to the rules on aggregation of claims set 
14 
forth in Section 123 of this Act. Any fund created shall be available only for the payment of 
15 
claims in respect of which limitation of liability can be invoked. 
16 
SEC. 125. Form of the Fund - The fund may be created, either by depositing the sum 
17 
with a universal bank designated by the court, or by providing a bond, or other security 
18 
acceptable to the court. 
19 
The fund constituted by any ofthe persons mentioned in Section 112, subsections (a), (b), 
20 
(c), (d) or ( e) shall likewise be deemed constituted in favor of the persons mentioned in 
21 
subsection (f) and (g) of that section. 
22 
SEC. 126. Distribution of the Fund - Subject to the provisions of Sections 118 and 119 
23 
hereof, the limitation fund shall be distributed among the claimants in proportion to their claims 
24 
against the fund as determined by the court. 
54 


1 
SEC. 127. Subrogation of Rights. - If at any time before the fund is distributed the ship 
2 
owner, ship operator, bareboat charterer, ship manager or salvor, or their respective insurers, 
3 
settles a claim made against and payable by the fund, such person shall, up to the amount paid, 
4 
acquire by subrogation the rights which the claimant would have enjoyed under this Title. 
5 
6 
SEC. 128. Contingency Fundfor Expected Claim. - Where the ship owner, ship operator, 
7 
bareboat charterer, ship manager, or salvor, or their respective insurers, establishes that it may be 
8 
compelled to pay a claim, at a later date, whether. in whole or in part, and because of such 
9 
payment, the ship owner, ship operator, bareboat charterer, ship manager or salvor, or their 
10 
respective insurers, would have enjoyed a right of subrogation if the claim had been paid before 
11 
the fund was distributed, the court having jurisdiction over the claim and in which the fund has 
12 
been constituted may order that a sufficient sum from the fund be provisionally set aside to 
13 
enable the person who has been subrogated to the rights of the claimant to enforce his claim 
14 
against the fund at such later date. 
15 
SEC. 129. Bar to Other Actions. - Where a limitation fund has been constituted in 
16 
accordance with Section 124 hereof, any person having made a claim against the fund shall be 
17 
barred from enforcing such claim against any other assets of the persons mentioned in Section 
18 
112 thereof and on whose behalf the fund has been constituted. 
19 
SEC. 130. Release from Arrest After the Constitution of the Limitation Fund. - After a 
20 
limitation fund has been constituted in accordance with Section 124 of this Act, any ship or other 
21 
property, belonging to a ship owner, ship operator, bareboat charterer, ship manager or salvor 
22 
whose behalf the fund has been constituted, which has been arrested or attached in accordance 
23 
with Title V of this Act in order to satisfy a claim which is enforceable against the fund or any 
24 
other bond or security given, may be released from arrest at the discretion of the oourt. Such 
25 
release shall, however, be mandatory ifthe limitation fund has been constituted: 
26 
a. At the port where the occurrence took place; 
55 


1 
b. If the occurrence took place out of port, at the first port of call of the ship after such 
2 
occurrence; 
3 
c. At the port of disembarkation in respect of claims for loss of life or personal ilDury: 
4 
d. At the port of discharge in respect of damage to cargo; or 
5 
e. At the port where the arrest is made. 
6 
The provisions of this section and of the immediately preceding section shall apply only 
7 
if the claimant may bring a claim against the limitation fund before the court administering that 
8 
fund and the fund is actually available and freely transferable to the claimant in respect of the 
9 
claim. 
10 
SEC. 131. Coverage. - The provisions of this Title shall apply to all Philippine flagships 
11 
whether seagoing or coastwise and to all foreign flagships the claims against which are sought to 
12 
be enforced in any Philippine court of appropriate jurisdiction. 
13 
Title VII 
14 
Final Provisions 
15 
SEC. 132. Requisition of Vessels. -The President of the Philippines may, in times of war 
16 
and other national emergency, when the public interest so requires, requisition, absolutely or 
17 
temporarily, for any naval or military purpose, any and all vessels of Philippine registry. The 
18 
Government shall pay the owner or operator of the vessel, based on normal conditions at the time 
19 
of requisition: 
20 
a. The fair market value, if the vessel is taken absolutely; or 
21 
b. The fair charter value, if the vessel is taken temporarily, for the period commencing 
22 
from the takeover by the Government to the date the vessel is returned to its owner or operator. 
23 
SEC. 133. Repealing Clause -The following laws are hereby repealed: 
24 
a. Articles 573 to 585 and 719 to 736 of the Code of Commerce of 1888; 
56 


.. 
,. 
1 
b. Se~tions 801 to 821 and 829 of Republic Act No. 1937 or the "Tariff and Customs 
2 
Code"; 
3 
c. Republic Act No. 913 or "An Act to Amend Section One of Commonwealth Act No. 
4 
606 by Defining the Term "Lease" or "Charter" and for Other Purposes"; 
5 
d. Republic Act No. 1407 or the "Philippine Overseas Shipping Act"; 
6 
e. Republic Act No. 6106 or "An Act Amending Republic Act No. 1407, As Amended, to 
7 
Prescribe the Rules for Financing the Acquisition or Construction of Vessels to be Used for 
8 
Overseas Shipping, to Allow the Creation of a Maritime Lien Thereon, and For Other Purposes"; 
9 
f. Presidential Decree No. 214 or an act "Further Amending the Philippine Overseas 
10 
Shipping Act of 1955'; 
11 
g. Presidential Decree No. 1521 of "The Ship Mortgage Decree of 1978"; 
12 
The provisions of the following laws covering the powers and functions ofMARlNA and 
13 
the Philippine Coast Guard are hereby amended insofar as they are inconsistent with sections 6 
14 
and 7 of this Act: 
15 
a. Republic Act No. 5173, as amended of "An Act Creating a Philippine Coast Guard, 
16 
Prescribing its Powers and Functions, Appropriating the Necessary Funds Therefor, and for 
17 
Other Purposes"; 
18 
b. Presidential Decree No. 601 or the "Revised Coast Guard Law of 1974"; 
19 
c. Presidential Decree No. 474 or the "Maritime Industry Decree of 1974", as 
20 
amended; 
21 
d. Executive Order No. 125 or the order "Reorganizing the Ministry of Transportation 
22 
and Communications, Defining its Powers and Functions and for Other Purpose" and 12S-A, as 
23 
amended, which amended E.O.N o. 125; 
24 
e. Section 10 of Republic Act No. 9295 or the "Domestic Shipping Development Act". 
25 
Further, Section 14 of Republic Act No. 9295 is hereby amended insofar as' it is inconsistent with 
26 
Section 51 of this Act. 
57 


1 
Such other laws, presidential decrees, executive orders, issuances, rules and regulations 
2 
or parts thereof, which are otherwise inconsistent with the provisions of this Act are hereby 
3 
repealed, amended or modified accordingly. 
4 
SEC. 134. Separability Clause. - If, for any reason, any section, subsection, clause or 
5 
term of this Act is held to be illegal, invalid, or unconstitutional, such parts not affected by such 
6 
declaration shall remain in full force and effect. 
7 
SEC., 135. Transitory Provision. - Every ship currently registered under the laws or the 
8 
Philippines and granted the privilege to fly its flag shall be deemed to be registered under this 
9 
Act in so far as its registration is not inconsistent with the provisions of this Act and such 
10 
registration shall continue to be valid until its expiration unless sooner revoked by the Maritime 
11 
Industry Authority. Any ship mortgage entered into in accordance with the provisions of the Ship 
12 
Mortgage Decree or the Chattel Mortgage Law shall continue to be valid and effective and its 
13 
registration shall be transferred to the Maritime Industry Authority in accordance with the 
14 
provisions of this Act. Nothing in the transfer shall change or in any way alter or affect any 
15 
preference a registered mortgage may enj oy or the original date on which such mortgage was 
16 
entered in the registry. 
17 
SEC. 136. Effectivity. - This Act shall take effect after fifteen (15) days following its 
18 
publication in a newspaper of general circulation 
Approved, 
58