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FOURTEENTH CONGRESS OF THE 
1 
First Regular Session 
) 
) 
i 
*.!I!. 
26 
;':::,<E:; 
REPUBLIC OF THE PHILIPPINES 
S E N A T E  
S.B. No. 13 7 
- 
Introduced by Senator LOREN LEGARDA 
EXPLANATORY NOTE 
This bill seeks to develop and strengthen the Philippine Maritime Industry in order to 
compete and prosper in the international maritime market. 
The Philippines is an archipelago made up of 7,107 islands. Because o f  its geographic 
make up, the maritime sector has become a vital industry not only locally but internationally as 
well. The Filipino seafarers are known for their hard work, discipline and dedication making the 
Philippines the prime source of the international merchant marine industry's crew members and 
officers. Inter-island ferries are used not only as commuter vessels but also as transport of raw 
materials and goods. These ferries are important means of transport because of their af~ordable 
rates and access to far flung areas, usually accessible only through sea. 
In order for the country to compctc in the global maritime market, the Philippines needs 
legislation that will improve, strengthen and transform the Philippine maritime sector into a 
forniidable international industry through the development of the shipbuilding, ship repair and 
ship recycling sectors. 
This measure seeks to address this necessity by creating a healthy and compefifive 
iiivestment and business climate in the maritime industry as well as provide the necessary 
assistance and incentives to sustain the growth of the Philippine merchant fleet and thc 
shipbuilding, ship repair arid ship recycling industries. 'Ibis Act shall provide for the 
establishment of a Maritime Equity and Investment Fund which shall serve as a source oT 
financing assistance to duly accredikd/license maritime entities for the acquisition and 
construction of ships and for the modernization and expansion of shipyard facilitics. 
Accredited domestic and overseas shipping orgctnizations that import vessels. spare parts, 
equipment and materials which will be used exclusively by Philippine-registered vessel shall be 
exempted from paying duties and taxes. Such incentives will encourage local and foreign 
organizations to invest in the country's maritime industry. 
Through the passage of this Act, a Maritime Industry Development Program, to be 
adopted and implemented by the Maritime Industry Authority (MARINA), will provide a 
framework for the integration of the maritime industry in the country's actions towards a 
developed socio economic situation. 
In view of the foregoing, the urgent passage of this bill is sought. 
Senator 


FOURTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES 
) 
First Regular Session 
) 
:,. ; 
S E N A T E  
“ I  
Introduced by Senator Loren Legarda 
AN ACT 
ESTABLISHING A PHILIPPINE MARITIME INDUSTRY LAW 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
CHAPTER 1 
GENERAL I’KOVISION 
SECTION 1. SHORT TITLE. This Act shall be known as the “Maritime lndustry 
Dcvelopment Act of 2007.” 
SECTION 2. DECLARATION OF POLICY. The State recognizes that the maritime 
industry is a vital component in the socio-economic development of thc country. 
The Philippines needs a strong and competitive maritime industry, which shall: 
a. our island by ensuring modern, sale, reliable, adequate, competilh and environmcnt- 
conscious passenger and cargo services: 
b. link our people and our good with the world with competitive and el‘licient shipping 
services: 
c. promote and facilitate trade and tourism; 
d. function as an employment support base for our maritime pourer; and 
e. enhance capability of shipbuilding, ship repair and ship recycling. 
‘l’o attain these objectives, it is hereby to be the policy o f  the State to: 
a. &ate a healthy and competitive investment and business cliinate in the maritime 
industry; 
b. provide necessary assistance and incentives lo sustain the growth of the J’hilippine 
merchant fleet and the shipbuilding, ship repair and ship recycling industries; 
e. provide a reservoir or competent and qualified maritime manpower: 
d. ensure the continued viability of Philippine ship operators; 
e. promote safety rules and regulations: and 
I: 
encourage modernization of ships. 
SECTION 3. DEFENITION OF TERMS. As uscd in and for purposes of this Act. the 
following terms, whether in singular or plural, shall mean: 
a. “Maritime Ikterprises” include any ship operator, ship o\vmcr, shipbuilder, 
shiprcpaircr, shiprecylcer, ship manager, ship agent, m,ulning/crewing/agcnt, freight forwardcr, 
marine surveyor, multimodal transport operator, non-vessel operating comnon carrier, 
classification societies and other similar enterprises which are duly accreditedilicensed by the 
Admini stration. 


b. "Administration" refers to the Maritime Industry Authority otherwise known 
as MARINA. 
c. "Domestic Shipping or Domestic Trade" refers to the transport of passengers 
or cargoes, or both, between ports in the Philippines including other 
operationsiservices within its territorial or internal waters. 
d. "Overseas Shipping or Overseas Trade" refers to the transport of passengers 
or cargoes, or both, between ports not otherwise falling within the routes 
covered by domestic shipping, including such activities as chartering and the 
acquisition and sale of ships to be operated in international voyages. 
e. "Bay and Riverine Trade" refers to the operation in protected water areas. 
Protected waters shall include bays, harbors, rivers, lalces or similar water 
areas'in which the ship is not more than three (3) nautical miles from land. 
"Domestic Ship Operator or Domestic Ship Owner" refers to a citizen of the 
Philippines, or a commercial partnership/corporation at least sixty per cent 
(60%) of the capital of which is owned by Filipinos, duly accreditedilicensed 
by the Administration to engage in the business of domestic shipping. 
g. "Shipbuilding" refers to the design, construction, outfitting and launching of 
any type of ship. 
h. "Ship Repair" refers to the overhaul, alteration, rehabilitation, modification, 
conversion or reconstruction of the hull, machinery, equipment, outfits and 
components of any type of ships. 
"Ship Recycling" refers to the dismantling of uneconomical or unserviceable 
ships for the purpose of recovering useful steel and other parts and the 
rehabilitation and repair of non-operational machinery, instruments and 
devices. 
j. "Ships" 
any craft or artificial contrivance capable of floating in water 
including tugboats, lighters, oil rigs, dredgers, floating hotelsicasinos, storage 
bargdankers, power barges, whether self-propelled or non-propelled, fishing 
crafts, scientific research and survey, pleasure yacht, mobile offshore drilling 
units (MODU). 
f. 
i. 
CHAPTER I1 
PHILIPPINE SHIP REGISTRY 
SECTION 4. The grant of Philippine nationality to a ship shall be governed by 
this Act. 
SECTION 5. The following may be permanently entered under the Register of 
Philippine Ships: 
1. ships that are wholly-owned by a Philippine national; 
2. ships jointly-owned by a Philippine national(s) and a foreign partner(s). 
SECTION 6. A foreign-owned ship bareboat chartered by a Philippine-national 
may be granted temporary registration under this Act, provided that it shall comply with 
the requirements of registration under this Act and such other requirements the 
Administration may impose. 
SECTION 7. In times of national emergency, when the public interests so 
requires, the State may, during the emergency and under reasonable tefms prescribed by 
it, temporarily take over or direct the operations of any ship engaged in domestic trade 
and commerce, or prescribe its rates or routes of operation. Immediately upon the 
cessation of the emergency, the State shall immediately reinstate to the domestic ship 
operator the operation of its ships under the terms and conditions existing prior to the 
occurence of the emergency. 
' 


SECTION 8. Ships granted the Philippine nationality under this Act shall be SO 
entered in the Register of Philippine Ships (RPS) to be maintained by the Administration 
subject to the conditions provided in the succeeding provisions; Provided that such ships 
shall comply with the administrative, technical and social regulations that lllay be 
imposed by the Administration. 
SECTION 9. The sovereignty of the Philippines shall extend to all Philippine- 
registered ships. 
SECTION 10. A Philippine-registered ship has the right to fly the Philippine 
flag, which shall be flown at all times. Such ship may not change its Philippine flag 
during a voyage or while in port of call save in the case of a transfer of ownership or 
change of registry and only after permission to do so had been issued by the 
Administration. 
SECTION 11. A ship, which is not registered under this Act shall not, for the 
puipose of making it appear to be a Philippine ship, fly the national colors, unless the 
assumption of Philippine nationality has been made for the purpose of escaping capture 
by the enemy or by a foreign ship of war in the exercise of belligerent right. The owner 
of a ship shall have the burden of proof in case of unathourized assumption of Philippine 
nationality. 
SECTION 12. 
Maritime enterprises as defined in this Act shall be duly 
established under Philippine laws and shall be accredited/licensed subject to the 
conditions as may be imposed by the Administration. 
SECTION 13. 
Maritime enterprises as defined in this Act shall be duly 
established under Philippine laws and shall be accredited/licensed subject to the 
conditions as may be imposed by the Administration. 
CHAPTER I11 
PUBLIC SERVICE OPERATIONS 
SECTION 14. .The term "public service" includes every person, natural or 
juridical, that now or hereafter may own, operate, manage, or control in the Philippine for 
hire or compensation, with general or limited clientele, whether permanent, occasional or 
accidental, and done for general business purposes, any ship, either for freight or 
passenger, or both, with or without fix route, and whatever maybe its classification. 
SECTION 15. The following ships are exempt from the preceding section: 
1. ships of war and troop ships; 
2. pleasure crafts not engaged in any activity with pecuniary benefits; 
3. wooden ships of primitive build; 
4. sailing ships; and 
5. government ships not engaged in commercial operation. 
SECTION 16. No shipowner/operator can operate a public service as defined in 
this Act without possessing a valid and subsisting Certificate of Public Convenience 
(CPC) or any authorization or permit issued by the Administration. 
SECTION 17. No CPC or authority to operate shall be issued unless the 
shipowner/operator and the ship have complied with the requirements on nationality, 


financial capability, public need, safety, service standards, and economicidevelopiiient 
considerations as embodied in rules and regulations to be issued by the Administration. 
SECTION 18. The Administration shall adopt a progressive liberalization and 
deregulation policy for the issuance of franchise and public service operation, 
SECTION 19. The exit from and entry into routes, including prescription of 
rates, shall be deregulated subject to the conditions that may be imposed by the 
Administration. 
SECTION 20. The Administration shall adopt and prescribe a reasonable rate of 
return for the domestic shipping industry. 
SECTION 21. The right to trade in bay and riverine operations shall not be 
limited to ships of local construction. 
SECTION 22. 
No foreign-registered ship shall be allowed to transport 
passengers or cargo between ports or places within Philippine territorial waters except 
when authorize by the Administration. 
SECTION 23. Every domestic ship ownerioperator shall have the obligation to 
carry mail on mutually agreed terms and conditions, and preferential, negotiated 
conditions shall be given for the carriage of other Government cargo. 
SECTION 24. The Administration shall have the power to impose, fix, collect 
and receive, in accordance with the schedules approved by its Board, such fees necessary 
for the supervision of domestic ship owners/operators or associations of such domestic 
ship owners/operators. 
CHAPTER IV 
MARITlME SAFETY 
SECTION 25. All maritime safety conventions, agreements, codes which have 
been ratified by the country shall form part of the laws of the land. 
IMOiILO 
Conventions, Rules and Regulations, Standards and Codes and any maritime related 
international conventions in force are adopted by reference regards the management and 
safe operations of ships. 
SECTION 26. It shall be the responsibility of shipownersinianagersi operators 
and Masters to ensure that Philippine-registered ships are in compliance with the 
requirements of all applicable International Maritime Conventions, Agreements, Codes, 
Regulations and Standards which the Philippines had ratified, adopted or acceded to. 
SECTION 27. Companies/entities/ships covered by this Act shall conform with 
regulations established by the Administration for the safe management and operation of 
ships. The Administration shall for this purpose adopt a statutory certification system lo 
inspect, evaluate and monitor level of compliance. The Administration may authorize 
other organizationsientities in carrying out this activity. 
SECTION 28. All foreign registered ships when in Philippine port shall be 
subject to control by officers of the Administration for the purpose of verifying 
compliance with existing international and national regulations. 


SECTION 29. A system of navigational aids shall be established and niaiiitaiiied 
throughout Philippine waters. A Vessel Traffic System shall be adopted in areas where 
the peculiarities of the area and/or volume of maritime traffic warrants. 
SECTION 30. Compulsory pilotage shall implemented in areas declared by 
appropriate government agencies based on the peculiarity and configuration of the area 
and the volume of maritime traffic. 
SECTION 31. A national action plan on preventing and' suppressing acts of 
piracy and armed robbery against ships shall be formulated and adopted by the 
Administration. 
SECTION 32. A system of search and rescue, emergemy response, distress and 
salvage management, typhoon doctrine be promulgated and formulated in coordination 
with appropriate government agencies. 
CHAPTER V 
CREWING OF PHILIPPINE-REGISTERED SHIPS 
SECTION 33. Philippine registered ships shall be manned by Filipino seafarers 
excepts in cases as may be determined by the Administration. 
SECTION 34. 
All Filipino seafarers including service providers while 
employed/on board ship shall possess a valid Seafarer's Identification and Record Book 
(SIRB) and a Seafarer's Registration Card (SRC). Service refer to those who are not part 
of the ship's regular crew complement. 
SECTION 35. 
A11 seafarers on board Philippine-registered ships shall be 
qualified and certified in accordance with the STCW Convention 1978, as amended save 
in cases where the Administration may accept an equivalent qualification and 
certification system. 
SECTION 36. A shipping article stating therein among others, the terms and 
conditions of employment shall be signed by the shipowner or the Master as his 
representative and the seafarer and shall be submitted to the Administration for 
endorsement. 
SECTION 37. Wages of seafarers onboard Philippine-registered ships engaged 
in international voyages shall be based as a minimum, on International Labor 
Organization (ILO) adopted rates. For those seafarers onboard ships engaged in domestic 
trade, their wages may be negotiated between the shipownedemployer and the seafarer 
but in no case lower than that set by the National Wage and Productivity Commission. 
SECTION 38. 
Except as provided in the immediately preceding section, 
shipowners operating Philippine-registered ships shall comply with the requireillents on 
labor standards, with respect to working conditions, social welfare benefits, settleinent of 
disputes and disciplinary measures. 
CHAPTER Vl 
MARITIME HUMAN RESOURCES 
SECTION 39. 
A human resource program to lift the qualifji of maritime 
professionals and skilled workers shall be formulated and implemented to fit the maritinie 


industry requirements by encouraging the pursuit of maritime profession, strengthening 
of the maritime education system and protecting the integrity of the qualification 
standards. 
SECTION 40. 
To spur the growth of maritime enterprises to expand 
employment opportunities, the Government shall pursue an aggressive campaign to 
promote the country the world's labor provider of choice. To the extent possible, 
maritime education shall adopt standards equivalent to internationally accepted levels of 
quality; corollary to this, apprenticeship training schemes shall become a priority thrust 
of government by, strengthening institutional linkages with foreign and local 
benefactordsponsors. 
SECTION 41. All Filipino maritime manpower shall be documented, qualified 
For this 
and certified in accordance with the minimum standards herein provided. 
purpose, a registry of maritime manpower shall be generated and maintained. 
SECTION 42. 
The Administration shall formulate and .conduct licensure 
examinations for all merchant marine officers, both for deck and engine department; to 
ensure that they are well-prepared professionally in discharging more critical ship duties 
and responsibilities as well as social obligations. 
SECTION 43. 
Skilled maritime workers' competence level shall be in 
accordance with the unified rules and standards set by certification bodies duly 
recognized by the Administration. 
SECTION 44. No Merchant Marine Officer shall act as Harbor Pilot unless he is 
licensed Master who has served as such on a sea-going vessel of at least 500 GT for a 
period of not less than five (5) years. 
SECTION 45. The protection and promotion of the welfare of maritime' labor 
employed overseas and their families shall be paramount. 
To this end, agencies 
concerned shall secure the best terms and conditions of their employment at par with 
prevailing international rates and standards as well as collective bargaining agreements 
and ensure compliance therewith. 
SECTION 46. The Administration shall adoptiundertake proper measures as 
embodiedhquired by pertinent international conventions to ensure decent working 
conditions and adequate rest periods to alleviate fatigue are provided to Filipino maritime 
manpower, especially seafarers on board ships, so that their physical well-being aid 
mental fitness, including operational preparedness/readiness are always maintained. 
Financial Security for speedy repatriation of said work for whatever reason or cause like 
completion of contract, injury or death and abandonment shall be utmost concern o f  the 
Administration. 
In coordination with concerned government agencies, the 
Administration shall endeavor that the immediately preceding section is accomplished. 
SECTION 47. This contracts of employment of other maritime labor shall be 
governed by the stipulations of the Labor Code. 
SECTION 48. Maritime manpower shall abide by a code of ethics governing the 
conduct and practices of each professiodskilled workers; breach of which shall be a 
ground for disciplinary action. 
CHAPTER VI1 
SHIP CONSTRUCTION 


SECTION 49. Ships shall be constructed in accordance with the requirements of 
SOLAS Convention, 1974, as amended, International Convention on the Preventiotl of 
Pollution from Ships, 197311 978 (MARPOL 73/78), Load Line Convention, International 
Tonnage Convention, Codes and Standards adopted by the International Maritime 
Organization (IMO), PMMR, 1997, as amended and all such rules and regulations that 
may be promulgated by the Administration. 
CHAPTER VI11 
ENVIRONMENT PROTECTION ' 
SECTION SO. The International Convention for the Prevention of Pollution fol 
Ships (MARPOL) 1973/78 shall form part of the environmental laws of the Philippines. 
SECTION 51. Companies/Entities/Ships covered by this Act shall conform with 
regulations established by the Administration pursuant to MARPOL 73/78 for the 
protection of the environment. The Administration shall for this purpose adopt a 
statutory certification system to inspect, evaluate and monitor level of compliance. The 
Administration may authorized other competent organizationdentities in carrying out 
these activities. 
SECTION 52. A system of compensation and compulsory insurance for any 
pollution damage consistent with the International Convention on Civil Liability for Oil 
Pollution Damage, 1992 (CLC) shall be enforced by the Administration. For this 
purpose, the Administration shall be the lead agency in the implementation of the CLC 
and the 1992 International Convention on the Establislvnent of an International Fund for 
Compensation for Oil Pollution Damage (FUND Convention). 
CHAPTER IX 
MARITIME LIENS AND MORTGAGES 
SECTION 53. The pertinent provisions of the Ship Mortgage Decree of 1978 are 
accordingly amended to foster confidence in investment and expand credit and financing 
facilities in shipping. 
SECTION 54. The following claims in relation to a ship shall be secured by 
maritime liens on the ship. 
1. Claims for wages and other sums to the master, officers and other members of 
the ship's complement in respect of their employment on the ship, including 
costs of repatriation and social insurance contributions payable 012 their 
behalf; 
2. Claims in respect of loss of life or personal injury occurring, whether on land 
or on water, in direct connection with the operation of the ship; 
3. Claims for reward for the salvage of the ship; and 
4. Claims for port, canal and other waterway dues and pilotage dues. 
Provided, that no maritime lien shall attach to the ship to secure any claim as set out 
under paragraphs (2) and (3), which arises out of or results from the radioactive 
properties or a combination of a radioactive properties with toxic, explosive or other 
hazardous properties of nuclear fuel or of radioactive product or waste. 
SECTION 55. The\maritime liens set out in Section 54 hereof shall raid< in the 
order listed therein subject, however, to prior claims which arose out of salvage of the 


ship which shall take priority over all other maritime liens which have attached to the 
ship prior to the time when the operations giving rise to the said liens were performed, 
Provided that, the maritime liens set out in each of suh-paragraphs .I), .2), and 4) of 
Section 54 shall rank pari passu as between themselves. 
SECTION 56. In case of default by the mortgagor, the Preferred Mortgagee is 
entitled to assume management of the ship as soon as his claim becomes due and payable. 
Likewise, the Preferred Mortgagee shall have ahsolute power to dispose the ship and to 
give account of the proceeds in the sale of the ship. The right of the mortgagee under this 
paragraph shall be subject to any prior encumbrances or maritime liens which shall attach 
in the amount and in accordance with their respective priorities, to the proceeds of the 
sale as provided under Section 16 of this Act, Provided, further, that the Preferred 
Mortgagee lien shall have priority over all claims against the ship except those liens 
mentioned in Section 54. 
SECTION 57. The ship subject of an arrest order may be discharged upon order 
of the court; Provided, that the party whose ships had been arrested shall have made a 
cash deposit or posted a counterbond with the court, and on behalf of the creditor, in an 
amount equivalent to the value of the claim. 
CHAPTER X 
FINANCING 
SECTION 58. A Maritime Equity and Investment Fund shall be established to 
serve as a source of financing.assistance to duly accredited/licensed maritime entities for 
the acquisition of ships of not more than fifteen (15) y,ears old classed by a government 
recognized/accredited classification society, construction of ships and for the 
modernizatiodexpansion of shipyard facilities. 
SECTION 59. The D e p k e n t  of Finance and the Department of Budget and 
Management shall earmark Two Billion Pesos (P2,000,000,000.00) 
a year for the next ten 
(IO) years as counterpart Philippine funding for concessional loans and official 
development assistance to be secured for the said fund. 
SECTION 60. The Fund shall he managed, and operated by the Development 
Bank of the Philippines, a Maritime Credit Committee (MCC) shall be established within 
the DBP composed of the following: 
Governor, Development Bank of the Philippines - Chairman 
Administrator, Maritime Industry Authority -Vice Chairman 
Private Sector Members: (To be appointed by the President from a list to he 
endorsed by the MARINA) 
General Manager, Phil. Ports Authority - Member 
I 
Overseas Shipping 
Domestic Shipping 
Shipbuilding, Ship Repair and Shipbreakers 
Seafaring 
SECTION 61. The MCC shall exercise supervision and control, as well as 
provide policy direction, in the management, administration and disposition of the Fund. 
The Maritime Industry Authority shall undertake technical and economic evaluation on 
loan applications filed, and endorse qualifying project proposals to the Development 
Bank of the Philippines. 


SECTION 62. The MCC is hereby authorized to promulgate necessary policies, 
programs, rules and regulations for the management, operation and implementation of the 
maritime equity and investment fund. 
SECTION 63. The MCC shall have the authority to execute agreements and 
other documents to evidence the indebtedness. 
SECTION 64. The basic functions of the MCC shall be as follows: 
(a) To promulgate necessary rules and regulations for the administration and 
(b) To contract loans either from local or foreign sources to augment the finiding 
(c) To execute agreements and other documents to evidence the indebtedness; 
(d) To grant loans to the ship owner/operator an amount equivalent to a maximum 
of eighty per cent (80%) of the total cost of the ship which shall be fully 
secured by a mortgage on the ship; and 
(e) To provide policy guidelines for the implementation of the Scrap and Build 
Program. 
implementation of the maritime equity and investment program; 
for the maritime equity and investment fund; 
SECTION 65. All sums lent from the Fund for the acquisition of ships shall be 
paid for in full by the ship owner/operator and shall bear interest at the rate of not more 
than ten per centum (10%) per annum. 
CHAPTER XI 
INCENTIVES 
SECTION 66. EXEMPTION FROM IMPORT DUTIES AND TAXES. 
66.1 Domestic/overseas shipping entities accredited and authorized by the 
Administration, who import ships, navigational, safety, communication and 
fixed shipboard cargo handling equipment or appliances, including hull 
material, marine engine, machinery, equipment, spare parts and 
accessories, which are to be used exclusively for Philippine-registered 
ships, shall be exempt from the payment of all import duties and taxes; 
Provided, however, That: 
(a) the imported ship shall not exceed fifteen (15) years, except oil and 
chemicdl tankers and gas carriers which shall not exceed ten (10) 
years, 
and 
classed 
by 
a 
government recognizediaccredited 
classification society; 
(b) the navigational, safety and communication equipment or appliances, 
including marine engine, machinery, equipment, spare pats and 
accessories are not produced locally in sufficient quantity and 
acceptable quality at reasonable prices. 
66.2 Shipbuilding and ship repair entities accredited and licensed by the 
Administration, who import machinery, equipment, materials and marine 
spare parts for construction, drydockingirepair, overhaul and/or alteration 
of ships and for modernization, expansion and/or upgrading of drydoclting 
facilities, shall be exempt from the payment of all import duties and taxes; 
Provided, however, That: 
(a) the item or items are not produced locally in sufficient quantity and 
that the importation is directly and actually needed in the construction, 
' 


drydockinghepair, overhaul and/or alteration of ships; or in the 
modernization, expansion and/or upgrading of drydocking facilities. 
Ship recyclers who import ships shall be exempt from the payment of 
import duties and taxes, Provided, that; 
(a) 
(b) 
66.3 
the ship shall be deliveredconsigned to an accredited ship recycling 
facility/yard; and 
a bond equivalent to the estimated taxes and duties is posted to 
safeguard that the ship will not be used for further operation and, 
provided further, that the said bond will only be released and/or 
cancelled after presentation of proof that the ship has already been 
dismantled. 
66.4 Maritime enterprises acquiring maritime training equipment or materials, 
such as but not limited to, simulators, Electronic Chart Display Information 
System (ECDIS), Automatic Radar Plotting Aids (ARPA), ROP, and other 
similar training equipment, shall be exempted from payment of import 
duties and taxes. 
Re-sale of any of the items for which exemption of tax had been secured 
shall make the maritime enterpriseliable for the tax otherwise paid. 
66.5 
SECTION 67. The sale of any Philippine-registered 'ship to a licensed ship 
recycle shall be exempt from all taxes and fees. 
SECTION 68. 
The transfer of maritime equipment or materials, boolis, 
publications, journals and similar items to a maritime education institution, training or 
research center, whether private or government-run shall be exempted from the payment 
of donor's tax. 
SECTION 69. Re-export bonds shall not be reqnired for bareboat All bareboat 
chartered ships. 
SECTION 70. 
Shipowner/operator shall be exempt from all taxes, duties, 
' charges, royalties, or fees due on local purchases by the grantee of fuel, bunker and oil, 
whether refined or in cure form, and whether such taxes, duties, charges, royalties, or fees 
are directly due from or imposable upon the purchaser or the seller, producer, 
manufacturer, or importer of said petrolum products but are billed or passed on the 
grantee either as part the price or cost thereof or by mutual agreement or other 
arrangement; provided, that all such purchases by, sales or deliveries of fuel, and oil to 
the grantee shall be for exclusive use in its transport and nontransport operations and 
other activities incidental thereto. 
SECTION 71. 
The amount exempted shall 
be reverted to the 
shipowner'doperator's paid idup capitalization, to be duly reported to, and 
supervised/monitored by the Administration. 
SECTION 72. The Administration, in coordination with the Department of 
Finance, shall: 
(a) 
(b) 
Issue implementing rules and regulations on the availment and conditions of 
the foregoing incentives; and 
Submit an annual report to the President of the Philippines and the Congress 
of the Philippines on the availment of the foregoing incentives. 
The foregoing incentives, except for Section 69, shall be valid for a period of ten (10) 
years. The President is empowered to extend for another fen (10) years any or all,of the 


foregoing incentives upon the recommendation by the Administration, and the 
Department of Finance. 
CHAPTER XU 
MARITIME: ADMINISTRATION 
SECTION 73. The Maritime Industry Authority is the Maritime Administration 
and is primarily responsible in the adoption and implementation of a practicable and 
coordinated Maritime Industry Development Program that will provide an effective 
framework for the integration of the maritime industry towards the country's accelerated 
socio economic development. 
SECTION 74. POWER AND FUNCTIONS OF THE BOARD. - The 
Maritime Industry Board shall, in addition to those provided under existing laws have the 
following powers, functions and duties: 
(a) 
Provide comprehensive policy guidance for the promotion, regulation, 
supervision and development of the maritime industry as provided for in 
this Act; 
Sustain the country's position as a responsible and active member of the 
international maritime community and foster support and confidence of 
multilateral and bilateral partners; 
(c) 
Adopt and coordinate the implementation of the developmental 
/promotional/institutional initiatives in furtherance of the Administration's 
mandate such as but not limited to the: 
(b) 
a. Establishment of maritime industrial zones 
b. Institutionalization of a shipping exchange 
c. Creation of a Maritime Technological Research and Development 
Center 
d. Promotion of quality assurance in the maritime industry 
e. Accelerated implementation of e-commerce 
f. Accreditation of shipping companies/operators as national and/or 
regional shipping line(s), with attendant benefits ad privileges, as well 
as mandates/responsibilities, to be provided by the Administration 
g. Establishment of a multinational transport system 
(d) 
Approve the grant of industry awarddrecognition as well as benefits and 
incentives for management and personnel, upon recommendation of the 
Agency head; 
(e) 
Determine, fix andor prescribe fees, charges, and/or rates pertinent to the 
supervision and operations of public water transport utilities; 
(fj 
Appoint members of the Panel of Examiners for the conduct of examination 
for harbor pilots, major and minor patrons and other ship officers and crew; 
(g) 
Issue Certificates of Public Convenience for the operation of domestic water 
carriers; and 
(11) 
Perform such acts as are proper and necessary to implement this Act. 
SECTION 75. 
BOARD OF DIRECTORS. - 
The composition of the 
MARMA Board as provided for in P.D. 474, as amended is hereby retained, Provided, 
that the Board shall be assisted by a Board Secretary, a Deputy Board Secretary and 
support staff who shall be permanent officialdemployees of MARINA. 


The Boar of Directors shall receive a monthly commutable allowance of five 
thousand pesos and per diem of one thousand for every Board or committee meeting 
actually attended, Provided, that the total amount of per diems which each may receive 
shall not exceed twenty thousand pesos a month. The MARINA Board Secretaries and 
the support staff shall be entitled to per diems equivalent to three thousand pesos and one 
thousand pesos, respectively. The commutable allowance and per diems of the MARINA 
Board of Directors are subject to automatic yearly increase of five percent. 
SECTION 76. GENERAL POWERS OF THE ADMINISTRATOR 
a. Develop and formulate plans, policies, programs, projects, standards, 
specifications and rules geared toward the promotion and development of the 
maritime industry and for the national security and economic objectives of the 
country; 
b. Direct and supervise the management, operation, and administration of the 
MARINA; 
c. Under continuing researches, studies, investigations and other activities 
related to the operations and future development requirements of the maritime 
industry, on his own initiative or upon instruction of the Board; 
d. Promote maritime safety and environmental protection; and 
e. Enforce laws, prescribe and enforce rules and regulations, including fines and 
penalties for violations thereof, governing water transportation and the 
Philippine merchant marine, and deputize law other government agencies to 
effectively discharge its functions. 
SECTION 77. SPECIFIC POWERS OF THE ADMINISTRATOR. - The 
Administrator shall have the following specific powers: 
a. Register ships, including fishing ships, and issue certificates, licenses or 
documents necessary or incident thereto. 
All motorized wooden-hulled 
shipdboats shall be registered by the Philippine Coast Guard. 
b. Accredit maritime entities to include marine surveyors, classification 
societies, certifying bodies, maritime training centers, maritime review centers 
and maritime enterprises engaged in domestic and overseas shipping, 
shipbuilding, shiprepair, shipbreaking, ship management, ship agency, lay up 
operations, and other maritime related activities. 
c. Establish, prescribe and regulate routes, zones andor areas of operation of 
public water services. 
d. Undertake safety regulatory functions pertaining to ship construction and 
operations to include, among others, approval of plans, admeasurement, load 
line assignment, conduction of inclining experiment/test, determination of 
manning levels, issuance of certificate of inspection. 
e. Ensure compliance of Philippine registered ships with international maritime 
safety and environment protection conventions such as SOLAS 1974, as 
amended, 1978 STCW Convention, as amended, MARPOL 73/78, ITC 1969, 
Loan Line 1966 and all subsequent amendments thereto, as well as all other 
maritime related conventions to which the Philippines may become a 
signatory thereof. 
f. Issue Certificate of Competency and endorsement to all marine and deck 
officers and ratings. 
Conduct examination and issue corresponding license to Harbor Pilots, Major 
and Minor Patrons, and other qualified ship officers and crew. 
h. Determine, fix and/or prescribe charges and/or rates pertinent to the regulation 
and operation of public water transport utilities and other maritime entities. 
i. Conduct marine inquiries and investigation. 
j. Issue the Seafarer's Identification and Record Book and maintain a Registry of 
Seafarers. 
g. 


k. Perform such other functions as may be assigned or delegated by the Board, 
those necessary to carry out the foregoing functions and those which may now 
or hereafter are provided by law. 
SECTION 78. REVOLVING FUND. - The MARINA, in addition to its 
annual appropriations, is hereby authorized to automatically retain as Revolving Fund 
fifty percent (50%) of its collection from all fees, charges and other receipts or revenues 
to 
defray 
deficiency 
in 
appropriations, 
to 
finance 
its 
special/promotional/institutional/developmental/projects/ programdactivities, and for 
Capital Outlay acquisition. 
SECTION 79. SEPARABILITY CLAUSE. - If, for any reason, any section, 
subsection, sentence, clause or term of this Act is held to be illegal, invalid or 
unconstitutional, such parts not affected by such declaration shall reniain in full force and 
effect. 
SECTION SO. REPEALING CLAUSE. - The provisions of Commonwealth 
Act No. 146, insofar as the same applies to the operation, management and control of a 
public service as defined herein, Sec. of the Tariff and Customs Code of the Philippines, 
the Provisions of Presidential Decree Nos. 474, 1059, the provisions of Executive Order 
No. 125/125-A, relevant MARINA memorandum circulars and such other laws, 
presidential decrees, letter of instructions, executive orders, issuances, ides and 
regulations or parts thereof, which are inconsistent with the provisions of this Act are 
hereby repealed, amended or modified accordingly. (SBSR Law, etc.) 
SECTION 81. PERIOD OF TRANSITION. - Upon approval of this Act, 
existing domestic liner and tramp operators shall continue to operate in their approved 
areah of operation. 
SECTION 82. EFFECTIVITY. - This Act shall take effect upon its approval. 
Approved,