EIGHTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
)
)
)
S E N A T E
s. No. 1261
NDEX
BILLS
Introduced by SENATOR RAMON BONG REVILLA, JR.
AN ACT
ESTABLISHING THE SCOPE AND PROCEDURE FOR PHILIPPINE SHIP 
REGISTRY, RECOGNITION AND ENFORCEMENT OF MARITIME CLAIMS, AND 
LIMITATION 
OF 
LIABILITY, 
AS WELL AS 
PROVIDING 
ESSENTIAL 
INCENTIVES, TO PROMOTE A COMPREHENSIVE AND ORDERLY PHILIPPINE 
SHIP REGISTRY SYSTEM FOR THE REGULATION OF VESSELS CARRYING 
THE FLAG STATE
EXPLANATORY NOTE
Philippines is widely known to be a major supplier of global maritime 
professionals on board vessels in different parts of the world. 
Records will show, 
however, that we have only about 200 vessels registered under the Philippine flag. 
Unfortunately, there is no legislation providing for uniform standards on ship/vessel 
registration.
This bill, therefore, aims to enhance and rationalize the Philippine maritime 
industry by establishing a ship registry and procedures in registration of ships in 
compliance with international maritime conventions, regulations and practices. This 
bill also aims to ensure that Filipino owned and manned maritime fleets or vessels 
comply the minimum global standards of reliability, safety, competitiveness and 
effectiveness. This will encourage the expansion in Philippine international trade and 
encourage Philippine vessel acquisition, development, modernization and expansion.
In view of this foregoing, immediate enactment of this bill is earnestly sought.
RAM^N/fiONG REVILLA JR.


EIGHTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
)
)
)
S E N A T E
s. No. 1261
BILLS i/IN D EX
Introduced by SENATOR RAMON BONG REVILLA, JR.
AN ACT
ESTABLISHING THE SCOPE AND PROCEDURE FOR PHILIPPINE SHIP 
REGISTRY, RECOGNITION AND ENFORCEMENT OF MARITIME CLAIMS, AND 
LIMITATION 
OF 
LIABILITY, AS WELL AS 
PROVIDING 
ESSENTIAL 
INCENTIVES, TO PROMOTE A COMPREHENSIVE AND ORDERLY PHILIPPINE 
SHIP REGISTRY SYSTEM FOR THE REGULATION OF VESSELS CARRYING 
THE FLAG STATE
Be it enacted by the Senate and House o f Representatives o f the Philippines in 
Congress assembled:
1 
Section 1. Short Title. -  This Act shall be known as the "Philippine Ship Registry
2 
System Act".
3 
Sec. 2. Declaration of Policy. — It is the policy of the State:
4 
a. To establish the Philippines as a leading maritime nation and
5 
respected flag State;
6 
b. To ensure that Filipino-owned-and-manned maritime fleets or vessels
7 
are strengthened and assisted to meet the minimum global standards
8 
for reliability, safety, competitiveness, and effectiveness;
9 
c. To provide protection to our merchant marine fleets, and help expand
10 
Philippine international trade;
11 
d. To 
encourage 
Philippine 
vessel 
acquisition, 
development,
12 
modernization and expansion through systemized and sustainable
13 
programs;


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e. To provide policies that will attract more ship owners to register under
2 
Philippine flag, thus ensuring the country's economic growth;
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f. To align the tax structure for its domestic and overseas shipping fleet
4 
to make it competitive; and
5 
g. To provide a mechanism for the early adoption and implementation
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of international maritime regulations and conventions.
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Sec. 3. Implementing Agency. — The Maritime Industry Authority (MARINA) shall
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be the implementing agency of this Act. The MARINA shall provide secretariat support
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in the enforcement of this Act.
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Sec. 4. Definition o f Terms. — As used in this Act:
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a. /Irresf refers to the attachment of a vessel by judicial process through
12 
an order of a competent court in order to secure the enforcement of
13 
a maritime claim, which attachment shall produce the effect of
14 
detaining or restricting the removal of a ship in execution or
15 
satisfaction of a judgment;
16 
b. Bareboat charter refers to a contract for the lease ofa ship, for a
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stipulated period of time, by virtue of which the bareboat charterer
18 
has complete possession and control of the ship, including the right
19 
to appoint the master and crew of the ship, for the duration of the
20 
lease;
21 
c. Bareboat charterer or charterer may be used interchangeably and
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refers to any person, commercial partnership or corporation which
23 
bareboat charters a Philippine flag vessel from another Philippine
24 
national, or a vessel of compatible foreign registry, for its own use;
25 
d. Certificate o f Philippine Registration refers to the document of
26 
registration of a vessel registered in accordance with Section 13 of
27 
this Act;
28 
e. Claimant refers to a person who asserts that a maritime claim exists
29 
in his favor;
30 
f. 
Court or Philippine court or competent court may be used
31 
interchangeably and refers to a court of appropriate jurisdiction
32 
within the territory of the Philippines;


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g. De-registration refers to the act of deleting a ship from the Registry 
of Ships of the Philippines and the cancellation of the Certificate of 
Philippine registry in accordance with Section 21 of this Act:
h. Foreign flag vesselrefers to a ship which is registered under the laws 
of a country other than the Philippines and which is authorized to fly 
the flag of that country,
i. 
Foreign registry refers to the registry of ships of a country other than 
the Philippines:
j. 
Maritime claim refers to any of the claims provided in this Act;
k. Maritime Hen refers to a charge that attaches to a ship which rises 
from a maritime claim against the ship, its owners, charterers, 
managers, or operators that results in a demand for indemnity or 
remuneration from the ship or its owners, charterers, managers or 
operators and is enforceable by judicial action;
l. 
Mortgages refers to the person, whether natural or juridical, in whose 
favor a ship mortgage is created in order to secure a principal 
obligation;
m. Mortgagor refers to a ship owner who constitutes a ship mortgage 
over a vessel or a vessel under construction registered in its name in 
order to secure the fulfillment of a principal obligation,
n. Philippine Flag Vessel refers to any vessel duly registered under 
Philippine Laws and authorized to fly the Philippine flag;
0. Philippine national refers to any individual who is a citizen of the 
Philippines, or a commercial partnership or corporation organized 
under the laws of the Philippines, at least 60% of the capital of which 
is owned by citizens of the Philippines,
p. Registration refers to the act of entering a ship in the Registry of 
Ships of the Philippines in accordance with this Act;
q. Register o f Ships o f the Philippines or Register or Registry may be 
used interchangeably and refers to the official public register 
maintained by the MARINA which shall hold the record of all vessels 
under Philippine laws;


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r. Record o f Ship Mortgages and Encumbrances refers to the public 
record maintained by the MARINA containing all details of the vessel's 
mortgage and encumbrances, as will be further described in details 
hereafter;
s. Seagoing k'esse/refers to any Philippine flag vessel of five hundred 
(500) gross tons or more, authorized to carry passengers or cargo, 
or both, in trade between a Philippine port and a foreign port, or 
between two foreign ports;
t. 
Ship manager refers to any person, commercial partnership or 
corporation to which the technical or commercial management, or 
both such technical and commercial management, of a ship has been 
entrusted by the ship owner and for that purpose is in charge of the 
operation of the ship which may include vessel maintenance and 
upkeep, crewing and passenger and cargo solicitations;
u. Ship mortgage refers to a contract executed by the owner of a ship 
creating a security interest over a particular vessel or a vessel under 
construction in order to secure the performance of a principal 
obligation;
V. Ship owner refers to any person, commercial partnership or 
corporation authorized to own, operate, manage, control, lease or 
charter out, or otherwise engage in the business of shipping;
w. Ship operator refers to any person, commercial partnership or 
corporation authorized to operate, manage or control a ship owned 
by another,
X. 
Tonnage or Gross tonnage may be used interchangeably unless 
otherwise indicated and refers to the ship's gross tonnage calculated 
in accordance with the tonnage measurement rules provided in the 
applicable international convention on the tonnage measurement of 
ships,
y. Unit o f Account vQf&rs to the Special Drawing Rights (SDR) as defined 
by the International Monetary Fund (IMF). The SDR is an


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international reserve asset, created by the IMF in 1969 to supplement 
its member countries' official reserves, 
z. 
Vessel or ship may be used interchangeably and refers to any boat, 
craft or artificial contrivance capable of floating in water, designed to 
be used, or capable of being used, as a means of water transport for 
the carriage of passengers or cargo, or both, utilizing its own motive 
power or that of another, and shall include a ship under construction 
and for purposes of this Act shall continue to be considered as 
personal property. It excludes fishing vessels defined and regulated 
under existing laws and bancas, sailboats, and other water-borne 
contrivance of less than three gross tons and not motorized: 
Provided, That this does not include those owned and/or operated 
by the Armed Forces of the Philippines and by foreign governments 
for military purposes: Provided further. That mobile offshore 
platforms used in petroleum exploration and development, such as 
mobile offshore drilling units and offshore production platforms, shall 
be considered as ships when they are mobile and not affixed to the 
seabed.
Sec. 5. 
The Philippine Ship Registry. —  The Philippine Ship Registry, 
hereinafter referred to as the "Registry", is hereby established, through which the 
State confers nationality, exercises its jurisdiction, protects and enforces private rights, 
and undertakes the national and international responsibilities of a flag State, over all 
ships flying the Philippine flag.
The Registry is comprised of the Register of Ships and the Record of Ship 
Mortgages and Encumbrances. It shall be maintained by the MARINA in accordance 
with the provisions of this Act, and the rules and regulations that may be issued 
pursuant thereto. There shall be one Registry for all domestic and international flag 
vessels.
Sec. 6. Register o f Ships. - A Register of Ships shall be kept and maintained by 
the MARINA, which shall record essential ship information, including the following:
a. Name of vessel;
b. Keel number;


1 
c. Hull material;
2 
d. Principal dimensions;
3 
e. Gross tonnage;
4 
f. Net tonnage;
5 
g. IMO number:
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h. Official number;
7 
i. Place of build;
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j. Year of build;
9 
k. Name and address of registered owner, ship operator, bareboat charterer,
10 
manager or other person responsible for the ship;
11 
I. 
Date of issuance of CPR;
12 
m. Class of vessel,
13 
n. A reference that encumbrances on the vessel appear in the primary registry.
14 
In the case of second-hand tonnage, the following additional data shall
15 
likewise be listed in the Registry of Ships:
16 
0. Place of previous registry;
17 
p. Name of previous owner. In the case of bareboat chartered vessels, the
18 
following additional data shall also be listed in the Registry of Ships:
19 
q. Place of primary registry;
20 
r. Name of registered owner appearing in 
the primary registry;
21 
s. Name of the vessel as it appears in the primary registry;
22 
t. A reference that encumbrances on the vessel appear in the primary registry;
23 
u. Any material change of condition with respect to any of the preceding items
24 
and any other fact required by regulation shall likewise be recorded in the
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Registry of Ships.
26 
The MARINA may add to the required information to be submitted in
27 
accordance with international standards.
28 
Sec. 7. Effect o f Registration. -  Any ship registered under the Philippine registry
29 
shall be entitled to the following:
30 
a. Conferment of the nationality and status of a Philippine ship;
31 
b. Entitlement to the protection of the Philippine flag;


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c. Entitlement to the right to invoke the diplomatic, consular and naval
2 
protection of Philippine authorities and the protection of the flag of the
3 
Philippines;
4 
d. Imposition of the duty to fly the Philippine flag;
5 
e. Obligation to abide by all applicable laws, decrees, orders, rules and
6 
regulations of the Philippines;
7 
f. 
Entitlement to the privilege to engage, consistently with the limitations
8 
provided by law, in Philippine coastwise trade in accordance with corollary
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permits, certificates and franchises that may be issued to the vessel; and
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g. Entitlement to the right to invoke the exercise of jurisdiction and control by
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Philippine government authorities over all persons found on board the
12 
vessel, or over any incident involving the penal or disciplinary responsibility
13 
of the master or any member of the crew whether the same arises from a
14 
crime or quasi-delict committed on board the vessel or from any collision or
15 
other incident of navigation concerning the ship.
16 
Sec. 8. One Ship, One Registry Ruie. — A ship may be registered with only one
17 
ship register at any one time. Before entering the ship in the Register, the MARINA
18 
shall ensure that any previous registration has been deleted, or that the ship has been
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de-registered from any foreign registry.
20 
In the case of a foreign flag ship under bareboat charter, the MARINA shall ensure
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that the right to fly the flag of the former flag State is suspended for the duration of
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its registration with the Philippine Registry. A Certificate of Registration shall be issued
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only upon the production of evidence indicating the suspension of its previous
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registration and nationality under the former flag State, and indicating the particulars
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of any registered encumbrances entered in the previous registry.
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It is the duty of the owner, master, or agent of every ship in the Register to inform
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the MARINA of any change in the facts pertaining to the ship and entered therein.
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Sec. 9. Who may Register. -
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a) All ships operating within the maritime territory and jurisdiction of the
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Philippines, except transient foreign flag ships subject to such regulations as
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the MARINA may prescribe, are mandated to be registered with the Philippine
32 
Registry: Provided, That they meet the conditions for the grant of registration


1 
imposed by this Act and the regulations pursuant hereto. This mandatory
2 
registration under the Philippine Flag is particularly required in the following
3 
cases:
4 
1. 
The ship is five hundred (500) gross tons or more, 2s 'The ship is
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owned by a qualified person, as may be determined by the MARINA;
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2. 
The ship meets the requirements for safety, security, marine
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environmental protection, crew nationality, training, certification
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and competency, and crew welfare.
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b) Any other ship, including a foreign-owned ship, may also be registered in
10 
accordance with this Act, provided the following conditions are present:
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1. 
It is used only in international voyages,
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It is managed by a qualified person residing in the Philippines, as
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may be determined by the MARINA;
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It complies with the applicable provisions that govern the safety and
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security of Philippine ships and persons on board;
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4. 
It complies with the applicable provisions that govern the terms and
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conditions of employment on board Philippine flag vessels; and
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5. 
The ship employs full Filipino crew, unless otherwise authorized by
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the MARINA, consistent with applicable treaties, conventions and
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internationally-accepted 
maritime 
and 
labor 
standards 
and
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practices: Provided, however. That any exemption granted by the
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MARINA must still require that at least majority of the crew of the
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seagoing vessel are Filipinos.
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6. 
Additional incentives for payment of tax tonnage, under Section 24
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hereof, shall be granted to the registered foreign-owned vessel
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where the ship owner, manager, operator, or bareboat charterer
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and all its crew officers, and employees have a valid, subsisting and
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duly implemented collective bargaining agreement that conforms to
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international labor standards, rules and conventions.
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c) Vessels of a foreign registry that are covered by a bareboat charter may be
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registered under the Philippine flag: Provided, That their registration under the


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foreign flag of primary registration shall not be abandoned, but shall be deemed
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suspended, for the duration of the ship's registration under the Philippine flag.
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Sec. 10. Licensure. — Every ship, regardless of size, intended to be used in the
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carriage of passengers or cargo, or both, between ports and places, in the coastal,
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internal, inland or sheltered waters of the Philippines, shall be covered by a license to
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operate: Provided, That such ship is owned by a citizen of the Philippines or a
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corporation or association organized under the jaws of the Philippines at least sixty
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percent (60%) of whose capital is owned by such citizens and the ship meets the other
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conditions for the grant of the license imposed by this Act and the regulations pursuant
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hereto;
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Sec. 11. Conditions for Registration. — No ship shall be registered unless the
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following conditions are present, as determined by the MARINA in accordance with
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this Act and regulations issued related hereto;
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a. Proof of Ownership. - There must be satisfactory proof of ownership and/or
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management by qualitied persons.
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b. Seaworthiness. - A ship must comply with the general requirements for age,
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safety, security, navigation, manning, and protection and preservation of
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the marine environment in accordance with national and international
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standards for ships.
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c. Manning. - A ship must be manned by a crew with such level of skills and
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competencies as may be necessary in accordance with applicable
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international maritime conventions, rules, and standards as well as national
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law and regulations.
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d. Labor and social conditions. - A ship must meet the labor and social
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standards required by applicable international labor conventions, rules and
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standards as implemented by the MARINA.
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e. Management. - A ship must be managed by a person or entity that is under
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the effective jurisdiction of the State.
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f. Payment of fees and dues. - The applicant for ship registration must pay
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the corresponding registration fees and tonnage dues as may be imposed
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by the State.


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Sec. 12. Documentary Requirements. -  Every ship owner, master or agent who
2 
opts to enroll a vessel for registry under the Philippine flag shall submit to the MARINA
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the following documents:
4 
a. A written application for registration;
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b. A documentary proof of ownership over the vessel;
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c. Proof of authority to enroll the ship for registry, if applicable:
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d. A copy of a certification issued by a classification society showing the ship
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is of a certain class, if existing and applicable; and
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e. Such other necessary documents that may be required by the MARINA in
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accordance with the best international shipping practices or standards.
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Sec. 13. Issuance o f Certificate o f Philippine Registration. No application for a
12 
Certificate of Philippine Registration shall be approved and issued until the MARINA
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has made the proper evaluation that all the conditions and documents required and
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mandated for registration under this Act or regulations issued hereto have been
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complied with. The MARINA or its deputized representative shall inspect the vessel
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and all its documents and ensure that it is qualified for registration under this Act.
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A certificate of Philippine registry shall be valid for a period of no more than
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three (3) years, and may be continuously renewed for a similar period: Provided, That
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all the requirements for registration or its renewal are met.
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In case of a bareboat chartered vessel, the Certificate of Philippine Registration
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shall be valid for a period of no more than three (3) years or the period of the bareboat
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charter, whichever is shorter.
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Sec. 14. Types o f Registration. — Registration of a ship may be permanent,
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provisional, or temporary in nature.
25 
a. Permanent Registration. - Except as provided in the succeeding sections,
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the registration of a ship and issuance of a Certificate of Philippine
27 
Registration is deemed to be permanent until the ship is actually de-
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registered or deleted from the Register.
29 
b. Provisional Registration. - Ships constructed and/or acquired abroad, before
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being brought to the Philippines, may be issued a Provisional Certificate of
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Philippine Registration and a provisional tonnage certificate for conduction
32 
purposes.
10


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c. Temporary Registration. - The following may be issued a Temporary
2 
Certificate of Philippine Registration:
3 
1. 
Any ship about to be built, or under construction in the Philippines;
4 
2. 
Any ship owned and/or operated by an entity duly registered with
5 
the Board of Investments (BOI) under pertinent investment laws,
6 
rules and regulations, to be used exclusively for the purpose of
7 
transporting 
raw 
materials 
and/or finished 
products 
within
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Philippine waters as an essential element and operation in the
9 
manufacturing, processing, or other business activity or project
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registered by such entity with the BOI: Provided, That such
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temporary registration applies only for the duration of such business
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activity or project, and shall not exceed one year, renewable for
13 
another year: Provided, further. That the type of ship used or
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service undertaken cannot be provided by a Philippine ship owner;
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3. 
Any ship that is operated and managed under a bareboat charter:
16 
Provided, That in case of a foreign flag vessel bareboat-chartered
17 
by a qualified person for operation in Philippine waters, the ship
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may be temporarily registered with the Registry for the duration of
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the charter: Provided, further, That for the duration of temporary
20 
registration with the Philippines, any registration with a foreign flag
21 
State is suspended: Provided, finally. That no ship under a bareboat
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charter shall be registered if, after the effectivity of its charter, it
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has undergone extensive structural modification in a manner that
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affects its safety and seaworthiness.
25 
Sec. 15. Markings, Name and Homeport. — All ships duly registered according
26 
to the provisions of this Act shall have their respective names plainly marked upon
27 
each side of the bow and the stern; and the homeport and International Maritime
28 
Organization (IMO) number upon the stern.
29 
Sec. 16. Change in Ownership o f Ships. — In case of a sale of a Philippine-
30 
flagged ship, the transferee shall present the bill of sale or other certificate evidencing
31 
the transfer of ownership to the MARINA within fifteen (15) days after its execution
32 
for appropriate recording in the Register.
11


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Sec. 17. Correction o f Errors in the Registry. — Errors in recording made in the
2 
Register shall be corrected in the following manner:
3 
a. Mere clerical errors without any effect on the meaning and substance of the
4 
document shall be corrected by the appropriate and designated officer of
5 
the MARINA who shall make the necessary correction,
6 
b. Any mistake or error that might affect the meaning and substance of the
7 
documents shall be corrected by order of the MARINA after notice to, and
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hearing of, the interested parties.
9 
Sec. 18. Reconstitution o f Lost Certificate. — If the Certificate of Philippine
10 
Registration of a ship is lost or damaged, the owner, master or agent thereof may file
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an application with the MARINA tor the issuance of a replacement certificate. The
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replacement certificate shall indicate that the original certificate is considered
13 
cancelled and revoked. If after the issuance of the replacement certificate, the lost
14 
original certificate of Philippine registry is found, it shall be the duty of the owner,
15 
master, agent or any person having possession of the original certificate to surrender
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it to the MARINA.
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Sec. 19. Suspension, Canceiiation or Revocation o f Ship Registration. — The
18 
registration of a Philippine flag vessel shall be cancelled and its corresponding
19 
Certificate of Philippine Registration shall be revoked in any of the following cases:
20 
a. The Certificate of Philippine Registration was illegally or fraudulently
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obtained;
22 
b. The ship is sold, transferred and/or assigned to a person not qualified to
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register ships in the Philippines under the provisions of this Title or as may
24 
be determined by the MARINA;
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c. In the case of a transfer of ownership over the ship, the new transferee 
or
26 
assignee has properly applied for change of ownership and/or registration;
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d. The ship is sold by the order of a competent court;
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e. The ship is sold for scrapping;
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f. The ship is determined by the MARINA to be unsafe and unserviceable
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beyond repair;
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g. The bareboat charter of the ship has expired, or has been cancelled or
32 
terminated for any reason, in which case the cancellation from the register
12


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of ships and revocation of the certificate of Philippine registry shall be
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automatic;
3 
h. The ship has been declared lost or missing pursuant to a written and
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notarized notice submitted by the owner, master, or agent of a Philippine
5 
flag vessel to the MARINA, containing advice of such loss and the probable
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cause thereof;
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i. 
Gross violations of the safety, security, environment and other standards or
8 
requirements set by the MARINA;
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j. The ship owner, manager, agent or bareboat charterer is proven to have
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given or submitted to the MARINA fabricated information or fraudulent
11 
documents relative to the registration or settlement of their fees or taxes;
12 
k. The ship has engaged in illegal activities;
13 
I. 
The ship owner, manager or bareboat charterer commits any act inimical to
14 
the national security or national interests of the Philippines;
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m. The ship is entered in a foreign registry without prior approval of the
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MARINA.
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Sec. 20. Inspection o f the Register. - The Register of Ships shall be open to
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public inspection during ordinary business hours, in the offices of the MARINA and
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online. All documents and information provided in connection with the registration of
20 
a ship are considered public documents. Upon request and payment of reasonable
21 
fees, authenticated copies of any document or instrument required to be filed under
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this Act and pertinent rules and regulations, or extracts thereof, shall be furnished to
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any person.
24 
Sec. 21. De-registration o f Ships. — A ship which is or has been registered in
25 
another State shall not be eligible for permanent registration in the Philippines, unless;
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a. A certificate has been issued by the former flag State to the effect that the
27 
ship has been de-registered; or
28 
b. A certificate has been issued by the former flag State to the effect that the
29 
ship will be de- registered on the day when such new registration is effected.
30 
Except in case of forced sales, a Philippine flagged vessel shall not be de-
31 
registered without the written consent of all holders of registered mortgages.
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If the de-registration of the vessel is obligatory in accordance with this section,
2 
all holders of registered mortgages shall be notified by the MARINA of the pending
3 
de-registration in order to enable such holders to take appropriate action to protect
4 
their respective interests.
5 
If the consent of the holders is not obtained, de-registration shall not be
6 
implemented earlier than three (3) months after notice to such holders of registered
7 
mortgages is given.
8 
Sec. 22. Processing Fee. — A processing fee shall be paid by the owner, master
9 
or agent of the ship sought to be registered when the application for registration or
10 
when a renewal thereof is filed. The processing fee shall be collected to cover
11 
administrative costs for handling and processing the application. The processing fee
12 
shall be in such reasonable amount as may be determined by the MARINA.
13 
Sec. 23. Registration Fee. — A registration fee shall be payable by the ship
14 
owner master or agent when the ship is first entered in the Registry and shall be paid
15 
when the Certificate of Philippine Registration is issued. The registration fee shall be
16 
fixed in such reasonable amount as determined by the MARINA.
17 
Sec. 24, Tonnage Tax Fees. —  An annual tonnage tax fee shall likewise be
18 
paid by the owner, manager or bareboat charterer of the vessel in order for the
19 
issuance and continued possession of a valid and subsisting certificate of Philippine
20 
registration. The annual tonnage tax fee shall be computed at the rate of US$0.10 per
21 
net register tonnage or its equivalent in Philippine Peso based on the present or latest
22 
exchange rate posted by the Bangko Sentrai ng Pilipinas (BSP) on the date of payment
23 
of the tonnage tax fees. The ship owner, master, or agent shall have the option
24 
whether to pay in US dollars or in Philippine Peso.
25 
For all vessels, if the owner, manager, or agent has satisfactorily established
26 
with the MARINA compliance with the conditions stated in Section 9 par. b Subsection
27 
6 hereof, they shall enjoy an additional incentive. In such case, the tonnage tax fees
28 
due from them shall be reduced to the rate of US$0.08 per net register tonnage or its
29 
equivalent in Philippine Peso based on the present or latest exchange rate posted by
30 
the BSP on the date of payment of the tonnage tax fees: Provided That if the MARINA
31 
determines that the conditions for the additional incentive is violated or proof shown
14


1 
for its existence is fabricated, the Certificate of Philippine Registration may be revoked
2 
in accordance with Section 19 paragraph (j) hereof.
3 
Sec. 25. Adjustments in Fees and Taxes. — The MARINA may review the rates
4 
for the processing fee, registration fee, and tonnage tax fees from time to time and
5 
with the approval of the Department of Transportation, may, by regulation, adjust or
6 
increase various fees, but for a reasonable amount.
7 
Sec. 26. Exemption from Duties and Taxes. — The importation by the owner,
8 
manager, agent or bareboat charterer of a vessel, and the spare parts, steel/metal
9 
plates and equipment needed for the refurbishing, repair and maintenance of such
10 
vessel shall be exempt from the payment of import duties and taxes, value added
11 
taxes and all other pertinent taxes.
12 
In the case of a registered vessel, the annual tonnage tax fees shall be in lieu
13 
of any income tax due from the ship owner, manager, agent or bareboat charterer
14 
and the withholding tax due on the lease or bareboat charter fees earned by the ship
15 
owner. Likewise, all crewing personnel of the registered foreign-owned vessel shall be
16 
exempt from income tax and all other taxes that may be imposed on their salaries and
17 
remunerations received by reason of or in connection with their employment with the
18 
ship owner, manager or bareboat charterer of the registered foreign-owned vessel.
19 
Sec. 27. Record o f Ship Mortgages and Encumbrances. - The MARINA shall
20 
maintain a Record of Ship Mortgages and Encumbrances containing the details and
21 
documents regarding all transfers, mortgages, encumbrances, or other documents
22 
proving or affecting the title to any ship registered in the Register of Ships. All
23 
documents, certificates, receipts, or acknowledgments canceling or satisfying any such
24 
obligation in whole or in part shall likewise be recorded. The date and time of recording
25 
shall be expressly stated.
26 
Sec. 28. Efffect o f Recording. — In order to be valid and enforceable, every
27 
mortgage, encumbrance, or other right over a Philippine flag vessel, whether
28 
permanent or temporary in nature, in favor of a person other than the registered ship-
29 
owner or his agent, must be entered into the Record. Priority in time of recording
30 
determines the priority in rights between different rights-holders.
15


1 
Sec. 29. Requirements o f Recording. — A ship mortgage, encumbrance, or
2 
other rights shall be entered into the Record upon submission to the MARINA of the
3 
following:
4 
a. A copy of the contract or other instrument evidencing such mortgage,
5 
encumbrance, or other rights, which contain all the essential details thereof;
6 
b. A copy of the Certificate of Philippine Registration;
7 
c. In case of a ship under construction, a copy of its Temporary Certificate of
8 
Philippine Registration, or if such has not yet been issued, a declaration
9 
stating the ship's name, the location of the shipyard, the yard number, and
10 
the dimensions and appropriate deadweight of the vessel upon completion.
11 
Sec. 30. Annotation o f Mortgages and Encumbrances. — Upon request of the
12 
mortgagee, holder of the right, or his agent, and submission of the necessary
13 
documents required in this Act for recording, the MARINA shall cause the annotation
14 
of a ship mortgage, encumbrance, or other right on the back of the corresponding
15 
Certificate of Philippine Registry of the vessel concerned, referring to the entry
16 
number, date and time of entry, and nature or subject matter of the document as
17 
contained in the Record.
18 
If a new or replacement certificate is issued, the annotations upon the previous
19 
certificate shall automatically be transferred and annotated upon the back of the new
20 
or replacement certificate.
21 
Sec. 31. Rights Over Vesseis Under Construction. — Any right in respect to a
22 
vessel under construction in the Philippines may be entered and recorded after the
23 
keel has been laid or equivalent construction work has been performed.
24 
Vessels under construction contracted by a Philippine national may be
25 
registered in accordance with the provisions of this Act. In order that the vessel may
26 
be the subject of registration under this Act, it is necessary that the keel of the vessel
27 
must have been laid and a keel number assigned by the shipyard at the time of
28 
application.
29 
Sec. 32. Inspection o f the Record. — The Record shall be open to public
30 
inspection during ordinary business hours in the offices of the MARINA and online.
31 
Upon request and payment of reasonable fees, extracts from the Record of Ship
32 
Mortgages and Other Rights, and/or authenticated copies of any document or
16


1 
instrument required to be filed under this Title and/or pertinent rules and regulations,
2 
or extracts thereof, shall be furnished to any person.
3 
Sec. 33. Nature o f Maritime Liens. — Maritime liens arise and are enforceable
4 
whether the claims secured by such liens are against the owner, or against the demise
5 
or other charterer, manager or operator of the ship. Except in case of forced sale of
6 
the ship, the maritime liens shall be attached to the ship notwithstanding any change
7 
of ownership, registration, or flag.
8 
Sec. 34. Ciaims Secured by Maritime Liens. — The following claims in relation
9 
to a ship shall be secured by maritime liens on the ship:
10 
a. Claims for wages and other sums due to the master, officers and other
11 
members of the ship's complement in respect of their employment on the
12 
ship;
13 
b. Claims in respect of loss of life or personal injury occurring, whether on land
14 
or on water, in direct connection with the operation of the ship;
15 
c. Claims based on tort and not capable of being based on contract, in respect
16 
of loss or damage to property caused by the operation of the ship other
17 
than loss of or damage to cargo, containers and passengers' effects carried
18 
on the ship;
19 
d. Claims for port, canal, and other waterway dues, tonnage dues, light dues,
20 
pilotage dues, other public taxes, dues and charges of the same character;
21 
and
22 
e. Claims relating to the salvage, wreck removal and contribution in general
23 
average.
24 
Sec. 35. Claims Not Secured by Maritime Liens. — No maritime lien shall attach
25 
to a ship to secure ciaims for damages in connection with the carriage of oil or other
26 
hazardous or noxious substances by sea for which compensation is payabie to the
27 
claimants pursuant to international conventions, local laws, or compulsory insurance,
28 
or those which arose out of or which resulted from the radioactive properties or a
29 
combination of radioactive properties with toxic, expiosive or other hazardous
30 
properties of nuclear fuel, or of radioactive produce or waste.
31 
Sec. 36. Priority o f Maritime Liens. - The maritime liens set out in Section 33
32 
hereof shall take priority over registered mortgages, hypotheques, and charges. No
17


1 
other claim shall take priority over such maritime liens or over such mortgages,
2 
hypotheques, or charges except as may be specifically provided under this Act. The
3 
maritime liens set forth in sub-sections (a) to (e) of Section 34 hereof shall rank equally
4 
as between themselves.
5 
Sec. 37. Maritime Liens in case ofSaivage, Wreck Removal, or General A verage
6 
Acts. — Maritime liens securing claims for salvage, wreck removal and contribution to
7 
general average shall take priority over all other maritime liens which have attached
8 
to the ship prior to the time when the operations giving rise to the said liens were
9 
performed.
10 
Such liens shall rank in the inverse order of the time when the claims secured
11 
thereby accrued. Claims for contribution to general average shall be deemed to have
12 
accrued on the date on which the general average act was performed, while claims
13 
for salvage shall be deemed to have accrued on the date on which the salvage
14 
operation was terminated.
15 
In the event of a forced sale of a wreck of a ship, following its removal by the
16 
MARINA, the costs of such removal shall be paid out of the proceeds of the sale before
17 
all other claims secured by maritime lien on the ship.
18 
If at the time of the forced sale, the vessel is in the possession of a ship-builder
19 
or a ship- repairer who enjoys a right of retention, such a ship-builder or ship-repairer
20 
shall surrender possession of the ship to the purchaser but is entitled to obtain
21 
satisfaction of a claim out of the proceeds of the sale after the satisfaction of the
22 
claims of holders of maritime liens mentioned in Section 34 hereof.
23 
Sec. 38. Extinguishment o f Maritime Liens. -  Maritime liens shall be
24 
extinguished after a - period of one (1) year from the time when the claims secured
25 
thereby arose unless, prior to the expiration of such period, the ship has been arrested
26 
and the ownership thereof transferred through a forced sale ordered by a competent
27 
court or tribunal.
28 
The period of one (1) year shall not be subject to suspension or interruption:
29 
Provided, That the time shall not run while the person enforcing the lien is prevented
30 
from arresting the ship legally or by circumstances beyond his control.
31 
Maritime liens which arose prior to the effectivity of this Act shall be
32 
extinguished one (1) year after the date of such effectivity.
18


1 
Sec. 39. Rights o f Retention. — The following persons, when in possession of
2 
ship or ship that is under construction, shall have the right to retain such ship or ship
3 
under construction, without need of a court order:
4 
a. a shipbuilder, to secure claims arising out of the construction of, or other
5 
work carried out in relation to the ship; and
6 
b. a ship repairer, to secure claims arising out of the repair of, including the
7 
modification, conversion or reconstruction of the ship, or other work carried
8 
out in relation to the ship, affected during such possession.
9 
Sec. 40. Extinguishment o f Rights o f Retention. — The rights of retention under
10 
the preceding section shall be extinguished when:
11 
a. the claim in respect of which said right has been exercised is met or is
12 
otherwise discharged;
13 
b. the ship ceases to be in the possession of the ship-builder or ship-repairer
14 
as the case may be; or
15 
c. The competent court orders the release of the ship.
16 
Sec. 41. Assignment or Subrogation. — The assignment of or subrogation to a
17 
claim secured by a maritime lien results in the simultaneous assignment of or
18 
subrogation to such maritime lien.
19 
Claimants holding maritime liens may not be subrogated to the compensation
20 
payable to the owner of the ship under an insurance contract.
21 
Sec. 42. Exclusions. — The provisions of this Title shall not apply to:
22 
a. a claim for the enforcement of a maritime lien that is already the subject of
23 
a pending case and which is sought to be enforced under the provisions of
24 
Presidential Decree No. 1521, or the Ship Mortgage Decree, at the time of
25 
the effectivity of this Act:
26 
b. A maritime lien which arose prior to the effectivity of this Act, unless such
27 
lien has already prescribed.
28 
Sec. 43. Application. -  The provisions of this Chapter shall apply to every
29 
mortgage wherever executed in respect of:
30 
a. A ship that is registered in the Philippines, or
31 
b. A ship that is under construction in the Philippines.
19


1 
Sec. 44. Subject o f a Ship Mortgage. — Unless otherwise stipulated, a ship
2 
mortgage shall include all the property of the mortgagor which is appropriated to the
3 
ship and on board at the time when the mortgage contract is entered into, or which
4 
is later substituted for such property.
5 
In case the ship is under construction, the ship mortgage shall include all
6 
materials, machinery and equipment owned by the mortgagor that are within the
7 
premises of the builder's yard and distinctly identified as intended to be incorporated
8 
into the ship under construction.
9 
Sec. 45. Format Validity. — A ship mortgage shall not be valid unless it is made
10 
by or with the consent of the owner of the ship or ship under construction, and in
11 
writing and signed by the mortgagor and mortgagee. However, the ship mortgage
12 
may be validly made in the form of an electronic document as defined by law. Except
13 
as otherwise expressly provided in this Act, no other document for formal validity shall
14 
be required in order for the ship mortgage to be binding and effective upon the
15 
mortgagor and mortgagee.
16 
Sec. 46. Registration o f Ship Mortgages. — Every mortgage of a ship that is
17 
registered or under construction in the Philippines shall, on proper application, be
18 
registered in the Record of Mortgages and Encumbrances established in Section 27
19 
hereof. If such a mortgage is not registered, it shall be unenforceable against the ship
20 
and third persons.
21 
All entries in the Register of Mortgages and Encumbrances pertaining to the
22 
mortgage of a ship shall be annotated on the back of the Certificate of Philippine
23 
Registration, stating the time and date of transfer and the nature and subject matter
24 
of the encumbrance. All ship mortgages shall be registered in the order in which they
25 
are filed, indicating the date and time of registration.
26 
The MARINA shall, upon the registration of a mortgage, issue two official copies
27 
of the relevant entry in the Registry to the mortgagor. Each official copy of the entry
28 
shall bear the official time and date of the registration of the mortgage.
29 
If a ship mortgage is transferred or materially amended or if one mortgage is
30 
substituted for another, the transfer, amendment or substitution shall likewise be
31 
entered into the Record. Any transfer, amendment or substitution that is not entered
32 
into the Record shall be unenforceable against the ship and third persons.
20


1 
Sec. 47. Disclosure by the Mortgagor. - Upon request of the mortgagee prior
2 
to the execution of the mortgage to which they are parties, the mortgagor shall
3 
provide in writing the details of any prior ship mortgage and any maritime lien that is
4 
known to the mortgagor, upon the ship which is the subject of the ship mortgage. |
5 
Sec. 48. Priority Between Ship Mortgages. — Ship mortgages shall rank in the
6 
order of their being recorded with the Registry.
7 
Sec. 49. Notification o f De-registration o f Subject o f Ship Mortgage. — Except
8 
in the case of a forced sale upon order of a competent court, the de-registration of a
9 
ship shall not be permitted unless all registered ship mortgages are first deleted, or
10 
the written consent of all holders of such mortgages is obtained.
11 
Where the de-registration of the ship is obligatory according to the provisions
12 
of this Act or its implementing regulations, the MARINA shall notify the holders of
13 
registered ship mortgages of the pending de-registration in order to enable such
14 
holders to take appropriate action to protect their interests. Unless the said holders
15 
consent to a shorter period, the de-registration shall not be implemented until after a
16 
lapse of a reasonable time from notification in writing, which shall not be less than
17 
three (3) months.
18 
There shall be no other requirements for formal validity except as stated in the
19 
preceding paragraphs.
20 
Sec. 50. Grounds to Enforce a Ship Mortgage. — A mortgagee shall be entitled
21 
to enforce the security represented by the ship under a mortgage in the following
22 
cases:
23 
a. The mortgagor defaults in the discharge of the indebtedness or other
24 
obligations secured by the ship mortgage:
25 
b. The mortgagor or any person in possession of the mortgaged property
26 
substantially prejudices the security of the mortgagee by any act or
27 
omission;
28 
c. The mortgagor commits any breach of the mortgage contract which, by the
29 
terms of the contract, entitles the mortgagee to enforce the security.
30 
Sec. 31. Remedies o f Mortgagees. -The enforcement of the security under the
31 
mortgage may be carried out by:
21


1 
a. Arresting the ship subject to the mortgage and applying for an order for its
2 
forced sale by competent court; or
3 
b. Foreclosing the mortgage; or
4 
c. Any other manner stipulated in the mortgage contract.
5 
Sec. 52. Arrest and Forced Sale o f a Ship. — A mortgagee entitled to enforce a
6 
mortgage, or a person exercising a maritime lien, may bring a proceeding in rem
7 
against the ship which is the subject of the mortgage or to which the maritime lien
8 
attaches, as the case may be, before a competent court having jurisdiction over the
9 
ship.
10 
The petitioner shall be entitled to apply to the court ex parte for an order for the arrest
11 
of said ship. The petitioner's claim shall be supported by an affidavit stating the
12 
circumstances which shall be the. bases to enforce the mortgage or lien. An affidavit
13 
executed abroad must be duly authenticated. If the affidavit satisfactorily establishes
14 
the petitioner's claim, the competent court shall order the arrest of the ship.
15 
The court may require the petitioner to post a bond or other security before
16 
issuing the order of arrest. If so required, the bond or security shall not exceed the
17 
amount of the mortgage debt or lien.
18 
The court shall, after judgment, order the forced sale of the ship to satisfy the
19 
claim, unless the ship has been released in accordance with the next succeeding
20 
section.
21 
The rules on preliminary attachment under the Rules of Court shall not apply
22 
in the arrest of ships.
23 
Sec. 53. Release o f Arrested Ship. — The court shall not release the arrested
24 
ship prior to rendition of judgment unless the mortgagor, the owner of the ship, or
25 
any person authorized to act on his behalf or of any other person interested in the
26 
ship:
27 
a. applies to the court for an order releasing the ship from arrest, by making
28 
a cash deposit, and if the same is not possible upon presentation of
29 
competent evidence, by filing a counter-bond or security in an amount
30 
double the value of the claim, to secure the payment of any judgment that
31 
the mortgagee may recover in the action, or
32 
b. Proves that the arrest was improperly or irregularly made.
22


1 
Sec. 54. Notice o f Forced Sale o f a Ship. — Prior to the forced sale of a ship,
2 
the court shall give, or cause to be given, at least thirty (30) days prior notice of the
3 
time and place of such sale, either in customary or electronic forni, to the following:
4 
a. all holders of registered mortgages;
5 
b. such holders of maritime liens whose claims have been notified to the court
6 
and have not expired;
7 
c. All other persons having an interest in the ship, whose interests have been
8 
notified to the court.
9 
Sec. 55. Effect o f Forced Sale o f a Ship. — in the event of the forced sale of a
10 
ship, all mortgages, except those assumed by the purchaser with the consent of the
11 
holders, and all liens and other encumbrances of whatsoever nature, shall cease to
12 
attach to the ship but shall attach to the proceeds of sale: Provided, That at the time
13 
of the sale, the ship is in the jurisdiction of the Philippines, and the sale has been
14 
effected in accordance with the laws of the Philippines.
15 
Any charter party or contract for the use of the ship in existence at the time of
16 
the forced sale shall be deemed to be terminated, without prejudice to any claim the
17 
charterer may have against the owner of the ship at the time of the sale.
18 
Sec. 56. Bankruptcy Does Not Affect Ship Mortgage. — The mortgage of a ship
19 
is not affected by the bankruptcy or rehabilitation of the mortgagor after the date of
20 
the registration of the mortgage.
21 
Sec. 57. Distribution o f the Proceeds. -  The costs awarded by the competent
22 
court and expenses arising out of the arrest and sale of the ship shall be paid first out
23 
of the proceeds of such sale. Thereafter, the following claims shall be satisfied out of
24 
the balance of the proceeds of the sale in the order herein enumerated, observing
25 
also the preference among each category of claims, established in Sections 34 and 36
26 
hereof on maritime liens and Section 46 hereof on ship mortgages:
27 
a. Maritime liens;
28 
b. Registered mortgages: and
29 
c. Rights of retention.
30 
In case of deficiency, the mortgagee shall be entitled to file a suit in personam
31 
against the mortgagor.
23


1 
Sec. 58. Certificate o f Release. -  When a ship registered in the Philippines has
2 
been the object of a forced sale in the Philippines, the competent court having
3 
jurisdiction shall, at the request of the purchaser, issue a certfiicate to the effect that
4 
the ship is sold free of all mortgages, maritime liens, and other encumbrances, except
5 
those assumed by the purchaser.
6 
Upon the production of the above-mentioned certificate, the MARINA shall
7 
delete all registered mortgages from the Registry, except those assumed by the
8 
purchaser, or issue a certificate of de-registration for the purpose of registration, as
9 
the case may be.
10 
Sec. 59. Effect o f the Forced Sale o f a Ship in Foreign States.— The forced sale
11 
in a foreign state of a ship registered in the Philippines shall be recognized and
12 
effective in the Philippines: Provided, That the procedure for such forced sale in that
13 
foreign state substantially corresponds to the appropriate procedure set out herein.
14 
Sec. 60. Foreign Maritime Liens. — A claim governed by the law of a State other
15 
than the Philippines and recognized by such law as giving rise to a maritime lien or
16 
right of a similar nature against the owner, or against the demise or other charterer,
17 
manager or operator of a ship, shall be recognized by and enforceable in the
18 
Philippines: Provided, That said claim constitutes or corresponds substantially to a
19 
claim set out in this Act. The provisions of this Act relating to maritime liens, including
20 
priority, ranking of liens between themselves, and enforcement, shall also apply to
21 
such claims.
22 
Sec. 61. Foreign Mortgages. — A foreign mortgage, or any mortgage or
23 
hypothee which relates to a ship of foreign registry, shall be recognized and
24 
enforceable in the Philippines: Provided, That:
25 
a. such mortgage has been effected and registered or otherwise recorded in
26 
accordance with the law of the State where the ship is registered;
27 
b. such register and any instrument or document which are required to be
28 
deposited are open to public inspection, and that extracts of the register
29 
and copies of such instruments are obtainable from the registrar, and
30 
c. either the register or the loan agreement specifies:
31 
1. 
the name and address of the person in whose favor the mortgage
32 
has been effected or that it has been issued to bearer:
24


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
2. 
the amount secured by the mortgage or the manner of calculating 
said amount;
3. 
the date of the mortgage; and A. such other particulars which, 
according to the law of the State where the ship is registered, 
determine the rank in regard to other registered mortgages.
All matters relating to the procedure for enforcement of foreign 
mortgages shall be governed by this Act.
Sec. 62. Priority and Ranking o f Foreign Mortgages. — Foreign mortgages shall 
be subordinate to maritime liens as set out in this Act. The ranking of foreign registered 
mortgages as between themselves, and their effect as regard to third parties, shall be 
governed by the law of the State where the ship is registered.
Sec. 63. Application. — The following may invoke the right to limit their liability 
in accordance with the rules provided for in this Title for the claims set out in the 
succeeding section:
a. Ship owners;
b. Ship operators;
c. Bareboat charterers;
d. Ship managers;
e. Salvors with respect to claims set forth in Section 65 hereof:
f. Any person whose act, neglect or default the ship owner, ship operator, 
bareboat charterer, ship manager or salvor is responsible for; and
g. Insurers who assume the liability of any ship owner, ship operator, 
bareboat charterer, ship manager, or salvor.
They may invoke their right to limit liability against any claimant ina judicial 
action who has sought the arrest of their vessels in order to enforce a claim which is 
subject to limitation.
Sec. 64. Claims which are Subject to Limitation. — The following claims made 
against the persons set forth in the preceding section or against the ship, whatever 
the basis of liability may be, shall be subject to the limitation of liability:
a. Claims in respect of loss of life or personal injury, or loss of or damage 
to property, including damage to harbor works, basins, waterways and 
aids to navigation, occurring on board or in direct connection with the
25


2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
1
operation of the ship or with salvage operations and consequential loss 
resulting therefrom;
b. Claims in respect of loss resulting from delay in the carriage by sea of 
cargo, passengers or their luggage;
c. Claims in respect of other loss resulting from the infringement of rights, 
other than contractual rights, occurring in direct connection with the 
operation of the ship or of salvage operations;
d. Claims in respect of loss or damage arising from the raising, removal, 
destruction or the rendering harmless of a ship which is sunk, wrecked 
or abandoned, including anything that is or has been on board such ship;
e. Claims in respect of loss or damage resulting from the removal, 
destruction or the rendering harmless of the cargo of the ship;
f. Claims in respect of measures taken in order to avert or minimize loss 
for which the person liable may limit his liability in accordance with this 
Title, and any further loss caused by such measures.
Sec. 65. Claims Not Subject to Limitation. — The following claims shall not be 
subject to any limitation of liability in accordance with this Title:
a. Claims arising from the contract of salvage or from any salvage operation 
rendered in accordance with relevant Philippine law on salvage or any 
applicable international salvage convention, including any claim for 
special compensation payable under a contract of salvage, or any 
contribution in general average;
b. Claims for oil pollution damage within the meaning of the applicable 
convention covering the civil liability for oil pollution damage or any 
amendment thereto which is in force;
c. Claims subject to any international convention governing or prohibiting 
the limitation of liability for nuclear damage;
d. Claims against the ship owner of a nuclear ship for nuclear damage:
e. Claims brought by employees against the shipowner, ship operator, 
bareboat charterer, ship manager, or salvor, where the duties of such 
employees are connected with the ship or with the salvage operations, 
as the case may be, or their heirs, successors, or assigns, if under the
26


1 
law governing the contract of employment, the ship owner, ship
2 
operator, bareboat charterer, ship manager, or salvor is not entitled to
3 
limit his liability in respect of such claims, or if the law governing the
4 
contract of employment permits a limit of liability greater than that
5 
provided for in this Act.
6 
Sec. 66. Conduct Barring Limitation. -  Any shipowner, ship operator, bareboat
7 
charterer, ship manager or salvor, or any person acting on their behalf, shall not be
8 
entitled to limit liability if it is proven that the loss resulted from the personal act or
9 
omission of such ship owner, ship operator, bareboat charterer, ship manager, or
10 
salvor, or any person acting on their behalf, and such actor omission was committed
11 
with the intent to cause such loss, or it was done recklessly and with the knowledge
12 
that such loss would probably result.
13 
Sec. 67. Counterciaims; Right to Set Off. - When a ship owner, ship operator,
14 
bareboat charterer, ship manager, or salvor, who is entitled to limit his liability, has a
15 
counterclaim against the claimant arising out of the same occurrence, their respective
16 
claims shall be set off against each other and the limits of liability shall only apply to
17 
the balance of the claim, if any. The right of set off can be invoked only if both parties
18 
are entitled to limit their respective liabilities and their respective claims do not fall
19 
within the provisions of sections 65 and 66 of this Act.
20 
Sec. 68. General Limits. — The general limits of liability for claims other than
21 
for passenger
22 
claims, arising from any distinct occasion shall be calculated as follows:
23 
a. in respect of claims for loss of life or personal injury:
24 
1. 
2,000,000 units of account for a ship with a tonnage not
25 
exceeding 2,000 tons;
26 
2. 
For a ship with a tonnage in excess thereof, the following
27 
amount in addition to that mentioned in a.l:
28 
I. 
For each additional ton from 2001 to 30,000 tons,
29 
800 units of account:
30 
II. 
For each additional ton from 30,001 to 70,000 tons,
31 
600 units of account;
27


1 
III. 
For each additional ton in excess of 70,000 tons,
2 
400 units of account
3 
b. In respect of any other claims:
4 
1. 
1,000,000 units of account for a ship with a tonnage not
5 
exceeding 2,000 tons:
6 
2. 
For a ship with a tonnage in excess thereof the following
7 
amount in addition to that mentioned in b .l:
8 
I. 
For each additional ton from 2001 to 30,000 tons,
9 
400 units of account:
10 
II. 
For each additional ton from 30,001 to 70,000 tons,
11 
300 units of account;
12 
III. 
For each additional ton in excess of 70,000 tons,
13 
200 units of account.
14 
The MARINA, with the approval of the Secretary of the Transportation may by
15 
regulation revise the limits of liability provided for in this section to align such limits
16 
with applicable international maritime conventions.
17 
Sec. 69. Claims for Loss o f Life in Excess o f the Stipuiated Lim it — If the
18 
amount calculated in accordance with subsection (a) of the preceding section is
19 
insufficient to pay in full all the claims tor loss of lite or personal injury, the amount
20 
calculated in accordance with subsection (b) shall be available for the payment of the
21 
unpaid balance of the claims under subsection (a).
22 
In this case, the unpaid balance for claims for loss of life and personal injury
23 
shall rank ratably with all other claims falling under subsection (b): Provided, however,
24 
That if there should be any claim arising trom damage to harbor works, basins and
25 
waterways, and aids to navigation, these shall be satisfied first before any other claim
26 
falling under subsection (b) are satisfied, including any unsatisfied claims for loss of
27 
life or personal injury.
28 
Sec. 70. Saivor's Limit o f Liability when Not Operating from a Ship. — The limit
29 
of liability for any salvor who is not operating from any ship or salvage tug, or who is
30 
operating solely on the ship to, or in respect of, which he is rendering salvage services,
31 
shall be calculated in accordance with the provisions of Section 69 of this Act applying
32 
a tonnage of 1,500 tons.
28


1 
Sec. 71. Limit o f Liability for Passenger Claims. ~ The limit of liability of a ship
2 
owner, ship operator, bareboat charterer, or ship manager, for passenger claims
3 
relating to loss of life or personal injury arising out of any distinct occasion, shall be
4 
an amount equivalent to 175,000 units of account multiplied by the number of
5 
passengers which the ship is authorized to carry according to the ship's certificate.
6 
Claims for loss of life or personal injury to passengers of a ship shall mean any such
7 
claims brought by or on behalf of:
8 
a. Any person carried on the ship under a contract of passenger carriage;
9 
or
10 
b. Any person carried on the ship who, with the consent of the master, is
11 
accompanying a vehicle, or a shipment of live animals, or other cargo
12 
which is covered by a contract for the carriage of goods.
13 
Sec. 72. Formula for Converting the Unit o f Account to Philippine Peso. — The
14 
unit of account mentioned in this Chapter shall be converted to Philippine Pesos
15 
according to the value of the Philippine Peso on the date the limitation fund is
16 
constituted, or payment is made, or security is given. The equivalent value of the
17 
Philippine Peso shall be calculated in accordance with the method of valuation applied
18 
by the International Monetary Fund for its operations and transactions in effect on the
19 
applicable date.
20 
Sec. 73. Aggregation ofCiaims for Loss o f Life and Persona! Injury and for other
21 
Claims. -T h e  limits of liability for loss of life and personal injury and for other claims
22 
determined in accordance with Section 68 hereof shall apply to the aggregate of all
23 
claims which arise on any distinct occasion against:
24 
a. The ship owner, ship operator, bareboat charterer, or ship manager and
25 
any person whose act, neglect or default such ship owner, ship operator,
26 
bareboat charterer or ship manager is responsible for, or
27 
b. The ship owner, ship operator, bareboat charterer, or ship manager of
28 
a ship rendering salvage services from a ship or the salvor or salvors
29 
operating from a salvage tug, and any person whose act, neglect or
30 
default the ship owner, ship operator, bareboat charterer, ship manager
31 
or salvor is responsible for; or | c. The salvor who is not operating from
32 
a ship or salvage tug or who is operating solely on the ship to, or in
29


1 
respect of, which the salvage services are rendered and any person
2 
whose act, neglect or default the salvor is responsible for.
3 
Sec. 74. Creation o f a Limitation Fund. — Any person entitled to limit his liability
4 
in accordance with Section 63 hereof and who is alleged to be liable for a claim provide
5 
in Section 64 hereof may, at any time during the hearing of the case or after the arrest
6 
of his vessel, constitute a fund with the court in which legal proceedings have been
7 
instituted for the satisfaction of the claim subject to limitation.
8 
The fund shall be in an amount equivalent to the limits of liability set forth in
9 
Sections 68, 70 and 71 hereof, as the case may be, together with any interest due
10 
thereon from the date of the occurrence giving rise to the liability until the date of the
11 
creation of the fund. The total amount of the fund shall be subject to the rules on
12 
aggregation of claims set forth in section 73 of this Act.
13 
Any fund created shall be available only for the payment of claims in respect of
14 
which limitation of liability can be invoked.
15 
Sec. 75. Insurance Indemnity Cover. — Every ship owner or bareboat charterer
16 
shall be required to maintain adequate insurance coverage or protection and indemnity
17 
coverage to meet the financial responsibility for any liability which such ship owner or
18 
bareboat charterer may incur for loss of or injury to human life, damage to property
19 
and to the marine environment. In determining the limits for mandatory insurance
20 
coverage for seagoing ships, the MARINA shall take into account and be guided by
21 
the applicable limits of liability provided in relevant international conventions. In
22 
setting the limits for mandatory insurance coverage for coastwise vessels the MARINA
23 
shall consider the prevailing local social, economic and other conditions in the
24 
Philippines.
25 
Sec. 76. Form o f the Fund. — The fund may be created, either by depositing
26 
the sum with a bank or other financial institution designated by the court, or by
27 
providing a bond, or other security acceptable to the court.
28 
The fund constituted by any of the persons mentioned in Section 63,
29 
subsections (a), (b), (c), (d) or (e) shall likewise be deemed constituted in favor of
30 
the persons mentioned in subsection (f) and (g) of that section.
30


1 
Sec. 77. Distribution o f the Fund. — Subject to the provisions of Sections 68
2 
and 69 hereof, the limitation fund shall be distributed among the claimants in
3 
proportion to their claims against the fund as determined by the court.
4 
Sec. 78. Subrogation o f Rights. — If at any time before the fund is distributed,
5 
the ship owner, ship operator, bareboat charterer, ship manager or salvor, or their
6 
respective insurers, settles a claim made against and payable by the fund, such person
7 
shall, up to the amount paid, acquire by subrogation the rights which the claimant
8 
would have enjoyed under this Title.
9 
Sec. 79. Contingency Fund for Expected Claim. — Where the ship owner, ship
10 
operator, bareboat charterer, ship manager, or salvor, or their respective insurers,
11 
establishes that it may be compelled to pay a claim, at a later date, whether in whole
12 
or in part, and because of such payment, the ship owner, ship operator, bareboat
13 
charterer, ship manager or salvor, or their respective insurers, would have enjoyed a
14 
right of subrogation if the claim had been paid before the fund was distributed, the
15 
court having jurisdiction over the claim and in which the fund has been constituted
16 
may order that a sufficient sum from the fund be provisionally set aside to enable the
17 
person who has been subrogated to the rights of the claimant to enforce his claim
18 
against the fund at such later date.
19 
Sec. 80. Bar to other Actions. — Where a limitation fund has been constituted
20 
in accordance with Section 74 hereof, any person having made a claim against the
21 
fund shall be barred from enforcing such claim against any other assets of the persons
22 
mentioned in Section 63 hereof and on whose behalf the fund has been constituted.
23 
Sec. 81. Release from Arrest after the Constitution o f the Limitation Fund. —
24 
After a limitation fund has been constituted in accordance with Section 74 of this Act,
25 
any ship or other property, belonging to a shipowner, ship operator, bareboat
26 
charterer, ship manager or salvor on whose behalf the fund has been constituted,
27 
which has been arrested or attached in accordance with Title {11 of this Act in order
28 
to satisfy a claim which is enforceable against the fund or any other bond or security
29 
given, may be released from arrest at the discretion of the court.
30 
Such release shall however be mandatory if the limitation fund has been
31 
constituted:
32 
a. At the port where the occurrence took place;
31


1 
b. If the occurrence took place out of port, at the first port of call of the
2 
ship after such occurrence;
3 
c. At the port of disembarkation in respect of claims for loss of life or
4 
personal injury;
5 
d. At the port of discharge in respect of damage to cargo: or
6 
e. At the port where the arrest is made.
7 
The provisions of this section and of the immediately preceding section shall
8 
apply only if the claimant may bring a claim against the limitation fund before the
9 
court administering that fund and the fund is actually available and freely transferable
10 
to the claimant in respect of the claim.
11 
Sec. 82. Report o f any Incident Involving a Philippine Registered Ship. — When
12 
any Philippine flag vessel sustains an accident or causes any incident involving the loss
13 
of life, material loss of property, or serious injury to any person, or receives any
14 
damage affecting her seaworthiness or her efficiency, or if it should cause any
15 
pollution or damage to the marine environment, regardless of where such accident or
16 
incident may occur, the ship owner, ship operator, bareboat charterer, ship manager,
17 
agent or master of such vessel shall immediately, after the occurrence of the accident
18 
or incident, send a report of the accident or incident to the regional office of the
19 
MAFQNA nearest the place of the accident or incident or, in the case of seagoing
20 
vessels, to the head office of the MARINA in the port of Manila, stating:
21 
a. The name of the vessel;
22 
b. The port to which the vessel belongs;
23 
c. The place where the incident occurred;
24 
d. The nature and probable cause of the incident;
25 
e. The number and names of those who perished; and
26 
f. The estimated amount of loss or damage to the vessel, the cargo or the
27 
marine environment.
28 
The ship owner, ship operator, charterer, ship manager, agent or master may
29 
be required to furnish such other information as shall be called for.
30 
Sec. 83. Marine Safety Investigation. — Following the occurrence of an accident
31 
or incident involving a Philippine flag coastwise or seagoing vessel resulting in the loss
32 
of life, material loss of property, or serious injury to any person, or receives any
32


1 
damage affecting her seaworthiness or her efficiency, or if tt should cause any
2 
pollution or damage to the marine environment, regardless of where such accident or
3 
incident may occur, the MARINA on its own or through a duly constituted independent
4 
group of suitably qualified safety inspectors, shall immediately undertake a marine
5 
safety investigation. This investigation shall be separate from any other form of
6 
investigation that may be undertaken by any other government agency.
7 
Sec. 84. Nature o f the Investigation. — The investigation undertaken in
8 
accordance with this Chapter shall not apportion blame or determine liability but shall
9 
be conducted to determine the cause of the accident and the identification of
10 
measures to prevent the occurrence of similar marine casualties, accidents or incidents
11 
in the future.
12 
Sec. 85. Power o f Safety Investigators to Investigate. — Maritime safety
13 
investigators appointed by the MARINA shall have full powers to board the Philippine
14 
flag ship regardless of where it may be found, and interview the master and the crew
15 
and any other person involved, and acquire such evidentiary material for purposes of
16 
undertaking and completing the marine safety investigation.
17 
Sec. 86. Amendment o f Safety Regulations. — Following completion of the
18 
safety investigation and upon a complete study of the safety investigation report, the
19 
MARINA shall take measures to amend its safety regulations to implement the
20 
recommendations made in the report.
21 
Sec. 87. Providing Reports to the International Maritime Organization. -The
22 
MARINA as competent authority shall provide a copy of the report to the International
23 
Maritime Organization to enable a wide dissemination of information and to assist the
24 
international maritime community to address safety issues.
25 
Sec. 88. Ship Construction. — Every new building registered under Philippine
26 
laws shall be constructed in accordance with standards for ship construction set forth
27 
in 
international maritime conventions and 
implemented through government
28 
regulations.
29 
Ship construction shall be under the supervision of the MARINA or a recognized
30 
organization appointed for the purpose. The recognized organization shall oversee the
31 
construction of the ship and ensure that the construction regulations provided in
32 
international maritime conventions and those issued by the MARINA covering the
33


1 
structural strength and integrity of all parts of the ship's hull and its appendages as
2 
well as the safety and reliability of the main propulsion, steering systems and auxiliary
3 
systems of the ship are followed.
4 
Sec. 89. Navigation and Communications Equipment — Every Philippine flag
5 
vessel shall have on board such navigation and communication equipment and
6 
apparatus required by international maritime convention for the safe navigation of
7 
ships. Every equipment and apparatus that shall be required to be installed on board
8 
shall be suited for the type, tonnage, power, means of propulsion and trading
9 
limitations of the particular ship.
10 
Sec. 90. Equipment to Prevent Marine Pollution. — Every Philippine flag vessel
11 
shall have on board equipment and apparatus to prevent, reduce, or control pollution
12 
to the marine environment emanating from ships. Every equipment and apparatus
13 
required to be installed on board shall be suited for the type, tonnage, power, means
14 
of propulsion and trading limitations of the particular ship.
15 
Sec. 91. Inspections and Surveys. — To ensure the proper maintenance of the
16 
ship's hull, machinery and equipment, its through-life compliance with international
17 
conventions and government regulations, and its safe operation, every Philippine flag
18 
vessel shall be subject to periodic inspections and surveys.
19 
Sec. 92. Scope o f Inspections and Surveys. — The inspections and surveys
20 
shall! be conducted in accordance with international maritime conventions and
21 
government regulations, and shall include an inspection and survey of the ship's:
22 
a. Hull structure;
23 
b. Machinery and equipment;
24 
c. Life-saving equipment;
25 
d. Fire-fighting equipment; and
26 
e. Radio and communications installations.
27 
Sec. 93. Extent o f authority o f recognized organization. - The MARINA, in
28 
appointing a recognized organization or classification society to conduct the inspection
29 
and survey of ships, shall inform the recognized organization of the specific
30 
responsibilities and conditions of the authority delegated to it.
31 
Sec. 94. Issuance o f Certificates. - The recognized organization, pursuant to
32 
the functions delegated to it by the MARINA, shall have the authority to issue vessel
34


1 
certificates to every Philippine flag vessel and for this purpose, the vessel certificates
2 
issued by such recognized organization shall be deemed to have met the requirements
3 
of this Act.
4 
Copies of the vessel certificates shall be submitted to the MARINA which shall,
5 
upon verification of compliance, issue a certificate of inspection in favor of the
6 
complying vessel confirming the findings of the recognized organization.
7 
Sec. 95. Availability o f Vessel Certificates. - The vessel certificates mentioned
8 
in the immediately preceding section shall be readily available on board the vessel for
9 
examination at all times.
10 
Sec. 96. Citizenship o f Crew. —Vessels engaged in coastwise trade as well as
11 
sea going vessels shall employ full Filipino crew: Provided, however. That seagoing
12 
vessels shall be subject to the exemption mentioned in Section 9b(5) hereof.
13 
An exemption from this citizenship requirement on such terms and conditions
14 
and for a limited period as may be determined by the MARINA may be obtained from
15 
the MARINA upon written application from the ship owner or operator. This exemption
16 
however shall not be granted to coastwise vessels.
17 
Sec. 97. Crew Competence. — Every member of the crew of a Philippine flag
18 
vessel shall possess the appropriate certificate of competency setting forth his
19 
competence to serve in the capacity and perform the functions involved at the level
20 
of responsibility, for the position held, for the type, tonnage, power, means of
21 
propulsion, and trading limitations of the ship concerned.
22 
The certificate of competency, as well as any endorsements thereto and any
23 
renewals thereof, shall be issued by the MARINA. The certificate of competency shall
24 
attest to the fact that the seafarer to whom it is issued meets the requirements for
25 
service, age, medical fitness training, qualification, and examinations for the position
26 
held.
27 
Sec. 98. Crew Deployment — Crew deployment to Philippine flagged seagoing
28 
vessels engaged in international or regional trade shall continue to be undertaken by
29 
the Philippine Overseas Employment Administration (POEA) in accordance with the
30 
appropriate provisions of the Maritime Labor Convention (MLC).
31 
Sec. 99. Requisition o f Vessels. — The President of the Philippines may, in times
32 
of war and other national emergency, when the public interest so requires, order the
35


1 
requisition of any and all vessels of Philippine registry, absolutely or temporarily, for
2 
any naval or military purpose. The Government shall pay the owner or operator of the
3 
vessel, based on normal conditions at the time of requisition:
4 
a. The fair market value, if the vessel is taken absolutely; or
5 
b. The fair charter value, if the vessel is taken temporarily, for the period
6 
commencing from the takeover by the Government to the date the
7 
vessel is returned to its owner or operator.
8 
Sec. 100. Streamlined and Rationalized Procedures. — To ensure the effective
9 
implementation of this Act and the further streamlining of processes to support the
10 
country's competitiveness and promote trade facilitation, the MARINA shall coordinate
11 
with the Department of Foreign Affairs, Department of Finance, Department of Labor
12 
and Employment, Department of Health, Department of Interior and Local
13 
Government, Securities and Exchange Commission, Philippine Overseas Employment
14 
Administration, Bureau of Immigration, Board of Investments, Bureau of Customs,
15 
Bureau of Internal Revenue, Philippine Ports Authority, Philippine Coast Guard, Bureau
16 
of Fisheries and Aquatic Resources, Bureau of Quarantine and other relevant offices
17 
and agencies to further streamline policies, requirements, processes, procedures, and
18 
national and local government fees, dues, charges, tariffs, assessments, rates and
19 
other levies, on the acquisition, registration and operation of vessels; the hiring,
20 
deployment, change and repatriation of crew; the construction, repairs, maintenance
21 
and recycling of ships; and other government and business processes concerning
22 
vessels in the Philippine Registry.
23 
Sec. 101. Implementing Rules and Regulations. — Within sixty (60) days after
24 
the effectivity of this Act, the MARINA shall issue the implementing rules and
25 
regulations as may be necessary to implement the provisions of this Act.
26 
Sec. 102. Administrative Offenses and Penalties. — To ensure faithful
27 
compliance with the rules and regulations issued in accordance with the preceding
28 
section, the MARINA, through summary administrative proceedings, may identify,
29 
prohibit, and penalize such acts and activities that may reduce the efficiency and
30 
reliability of the Philippine Ship Registry, impede the effectiveness of the exercise of
31 
Philippine jurisdiction and control over Philippine flay vessels, or otherwise interfere
32 
with its duties and responsibilities as a flag State and the implementation of this Title.
36


1 
For this purpose, the MARINA is authorized to impose an administrative fine of
2 
not less than Ten Thousand Pesos (PhP10,000.00) but not more than Five Hundred
3 
Thousand Pesos (PhPSOO,000.00), as well as the penalty of suspension, cancellation,
4 
or revocation of the relevant certificates, for violations of this Act and such rules and
5 
regulations that it may issue pursuant to this Act.
6 
The range of fines shall be subject to review and revision every five (5) years
7 
from the date of effectivity of this Act, but in no case shall any increase exceed an
8 
amount equivalent to twenty percent (20°) of that previously imposed.
9 
Sec. 103. Transitory Provisions. — Every ship currently registered under the
10 
Jaws of the Philippines and granted the privilege to fly its flag shall be deemed to be
11 
registered under this Act in so far as its registration is not inconsistent with the
12 
provisions of this Act and such registration shall continue to be valid until its expiration
13 
unless sooner revoked by the MARINA.
14 
Any ship mortgage entered into in accordance with the provisions of the Ship
15 
Mortgage Decree or the Chattel Mortgage Law shall continue to be valid and effective
16 
and its registration shall be transferred to the MARINA in accordance with the
17 
provisions of this Act. Nothing in the transfer shall change or in any way alter or affect
18 
any preference a registered mortgage may enjoy or the original date on which such
19 
mortgage was entered in the registry.
20 
Sec. 104. Separabiiity Cause. — If, for any reason, any section, subsection,
21 
clause or term of this Act is held to be illegal, invalid, or unconstitutional, such parts
22 
not affected by such declaration shall remain in full force and effect.
23 
Sec. 105. Repeating Cause. — The following laws are hereby repealed:
24 
a. Articles 573 to 585 of the Code of Commerce of 1888;
25 
b. Sections 801 to 821 of Republic Act No. 1937;
26 
c. Republic Act No. 913;
27 
d. Republic Act No. 1407:
28 
e. Republic Act No. 6106;
29 
f. Republic Act No. 7471, as amended;
30 
g. Republic Act No. 9301;
31 
h. Presidential Decree No. 214;
32 
i. Presidential Decree No. 760, as amended.
37


1 
The provisions of the following laws covering the powers and functions
2 
of the MARINA are hereby amended insofar as they are inconsistent with
3 
Section 6 of this Act:
4 
j. 
Presidential Decree No. 474, as amended,
5 
k. 
Executive Order No. 125 and 125-A, as amended;
6 
I. 
Section 10 of Republic Act No. 9295.
7 
m. Section 14 of Republic Act No. 9295 is hereby amended insofar as it is
8 
inconsistent with Section 51 of this Act.
9 
Such other laws, presidential decrees, executive orders, issuances, rules
10 
and regulations or parts thereof, which are otherwise inconsistent with the
11 
provisions of this Act are hereby repealed, amended or modified accordingly.
12 
Sec. 106. Effectivity. — This Act shall take effect fifteen (15) days after its
13 
publication in the Official Gazette or in a newspaper of general circulation.
14
15 
Approved,
38