.'t ." 
SIXTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
) 
) 
) 
SENATE 
13'1':'9 
s. No. 
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AUG 28 P 1 :57 
Introduced by Senator Antonio "Sonny" F. Trillanes IV 
EXPLANATORY NOTE 
During his 2013 State of the Nation Address (SONA), President Benigno S. Aquino III called oli 
Congress to amend the country's policy OIi Cabotage which means "navigation or trade along the 
coast". 
To heed the call of the President, and in response to the long-standing clamor of stakeholders, 
this measure seeks to repeal the pertinent provisions of the Tariff and Customs Code of the 
Philippines and the Domestic Shipping Development Act of 2004 which embody the Cabotage 
principle. 
The present Cabotage policy of the country as provided for by the aforementioned laws, which is 
a renmant of the Jones Law of 1920 when the country was still a colony of the United States of 
America, prohibits foreign carriers from engaging, in domestic trade. Albeit said policy was 
initially adopted to protect and boost the lo,cal shipping industry, "like many other industries that 
are controlled by a few, the industry remains inefficient"l and has yet to sigrrifiqantiy grow and 
improve. The high cost of operating and maintaining fleets of mostly old vessels is shifted to 
consumers which include our farmers, fisherfolks, traders, buyers, and tourism operators, among 
others, in the form of exorbitant inter-island transport fees. In fact, our domestic shipping carriers 
charge almost three times more than what international shipping lines charge and for a 
ludicrously shorter distance. 
It is hoped that with the President at the forefront of championing this cause which is envisioned 
to ''foster greater competition and to lower the cost of transportation for our agriCUltural sector 
and other industries,,2, this Congress will finally usher the passage of this measure. 
In view of the foregoing, immediate enactment of this bill is earnestly sought. 
M\r\'-
ANTONIO "SONNY" F. TRILLANES IV 
Senator 
1 Fidel O. Abalos. Cabotage Law: "Exclusive growth" for local ship-owners. Information retrieved from http://wwwphilstar.comlcehu-
husj ness (2 0 13 107/29/1 026861 lea botage-law-exclusive-growth -local-shin-owners on 8/8/2013. 
2State of the Nation Address of His Excellency Benigno S. Aquino III President of the Philippines to the Con9ress of the Philippines. Session 
Han of the House of Representatives, Batasang Pambansa Complex, Quezon City, on July 22, 2013. 
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SIXTEENTH CONGRESS OF THE. 
) 
REPUBLIC OF THE PHILIPPINES 
) 
First Regular Session 
) 
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<01f,;, ,,( l!j. "",!ott 
'13 
AUG 28 P 1 :57 
SENATE 
S.B.No. 1359 
RECEIVEIW Hy:-F ( 
Introduced By Sen. Antonio "Sonny" F. TriDanes IV 
AN ACT 
ALLOWING FOREIGN VESSELS TO ENGAGE IN COASTWISE TRADE IN THE 
COUNTRY AND FOR OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the Philippines in Congress 
assembled: 
SECTION 1. Short Title. - This act shall be known as the "Coastwise TradeAct of 
2013". 
SEC. 2. Declaration of Policy. - It is the policy of the state to: 
1. Allow the entry of foreign vessels to assist importers and exporters in enhancing their 
competitiveness in the light of intensifYiJ;lg international trade; 
2. Lower the cost of shipping export cargoes from Philippine ports to the international ports and 
vice versa; and 
3. Ensure the continued viability of d()lJIesti\1 and foreign shipping operations. . 
SEC. 3. Definition of Terms. - For purposes of this Act, the following terms are hereby 
defined as follows: 
a) "Clearance" refers to the compliance with the requirements of the Bureau of 
Customs for the release of import cargoes which include but not limited to the filing 
of import entry and payment of duties and taxes unless otherwise exempt therefrom; 
b) "Coastwise Trade" refers to the sale or exchange of goods, articles, commodities or 
merchandise which are neither designated nor classified as export cargo nor import 
cargo; 
c) "Container" refers to a ship's to cargo that is of the Philippine origin intended for 
local consumption, or those which have not been duty declared for exportation to the 
Bureau of Customs at the port of origin, or those of foreign origin but which have 
been entered and cleared by the Bureau of Customs; 
d) "Export Cargo" refers to the goods, articles, commodities, or merchandise duly 
declared to the Bureau of Customs at the port of origin as cargoes for foreign 
shipment to a foreign country; 
e) "Foreign Cargo" refers to export or import cargo; 
f) "Foreign Port" refers to 11: porwt place outside the jurisdiction of the Philippines; 
g) "Foreign Trade" refers to the sale or exchange of goods, articles, commodities or 
merchandise which are either designated or classified as export or import cargo; 
h) "Foreign Vessels" refers to vessels registered and documented in registries other 
than that of the Philippines; 
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i) "Import Cargo" refers to the goods, articles, commodities or merchandise offoreign 
origin which are intended to be cleared at the final port of destination in the 
Philippines; 
j) "Port of Entry" refers to a place where foreign goods may be cleared through a 
customhouse or a place where an alien may be permitted to enter a country; 
k) "Principal Port of Entry" refers to the chief port of entry of the collection district 
wherein it is situated and is the l'ermanent station of the collector of such port; 
1) "Philippine Vessels" refers to vessel duly registered and documented in the 
Philippine registry; and 
m) "Sub-ports of Entry" refers to those ports granted by the Bureau of Customs 
allowing a foreign vessel engaged in foreign trade to load and unload, or accept and 
process export or import cargoes. 
Sec. 4. Coastwise Trade. - The right to engage in the Philippine coast,wise trade shall no 
longer be limited to vessels carrying a certificate of Philippine registry. 
For this purpose, foreign vessels may be allowed to transport passengers or cargoes 
between ports or places within the Philippine territorial waters even when a domestic vessel is 
available or suitable to provide the needed shipping service and whenever public interest 
warrants. 
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I, I. 
Passengers or articles arriving from abroad on a foreign vessel may be carried by the 
same vessel through any port of entry to the port of destination in the Philippines. Passengers 
departing from the Philippines or articles intended for export may likewise be carried in a foreign 
vessel through a Philippine port; Provided, That the country where the foreign vessel is 
registered affords the same privileges to Philippine registered vessels. 
SEC. 5. Certificate of Public Convenience. - All domestic and foreign ship owners or 
operators shall, upon approval of the application with the Maritime Industry Authority 
compliance of all requirements, be given the certificate of public convenience or any form of 
authorization for the carriage of cargoes or passengers, or both, in the domestic trade. 
SEC. 6. Clearance. - Upon compliance with such reasonable conditions as he may 
impose, the Commissioner of Customs may clear foreign vessels for any port and authorize and 
conveyance therein of either articles or' passengers brought from abroad upon such vessels. He 
may likewise, upon such conditions as he may impose, allow a foreign vessel to take cargo and 
passengers at any port and convey the same upon such vessel to a foreign port. 
The clearance permitting vessels to engage in foreign trade to load or unload foreign 
cargoes to and from principal ports of entry or sub-ports in the country shall include the 
following instances: 
a) Allowing an international cargo vessel to shift empty containers of any foreign lines 
if said vessel regularly calls at Manila and proceeds to Philippine outports; and 
b) Allowing transhipment by an international vessel of cargo coming from or headed for 
a foreign port to and from any Philippine outport. 
SEC. 7. Regulatory Body. - The Maritime Industry Authority (MARINA) shall have the 
power and authority to issue certificate of public conveuience to qualified foreign and domestic 
ship operators, taking into consideration the economic and beneficial effect which the propose 
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service shall have to the port, province or region which it proposes to serve, and the financial 
capacity of the domestic ship operator to provide and sustain safe, reliable, adequate, efficient 
and economic service in accordance with the standards set by the government regulation. 
SEC. 8. Implementing Rules and Regulations. - Within sixty (60) Days from the 
approval of this Act, the Secretary of Finance shall, in consultation with the Bureau of Customs 
(BOC), Maritime Industry Authority (MARINA), Philippine Shipper's Bureau and Philippine 
Coast Guard, promulgate such rules and regulations necessary for effective implementation of 
this Act. 
SEC. 9. Repealing Clause. - Sections 902 and 1099 of Republic Act No. 1937, otherwise 
known as the "Tariff and Customs Law of the Philippines," Section 5, 6, and 7 of Republic Act 
No. 9295, otherwise known as "Domestic Shipping Development Act of 2004," and all laws, 
decrees, executive orders, rules and regulations or other issuances, or parts thereof, inconsistent 
with this Act are hereby repealed or modified accordingly. 
SEC. 10. EffectiVity Clause. - This Act shall take effect fifteen (15) days after its 
publication in two (2) national newspapers of general circulation. 
Adopted, 
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