Republic of the Philippines

Department of Transportation and Communications

MARITIME INDUSTRY AUTHORITY
PPL Bldg., 1000 United ations !"enue, #rmita, $anila
RULES AND REGULATIONS IMPLEMENTING REPUBLIC ACT NO.
9295, ENTITLED AN ACT PROMOTING THE DEVELOPMENT OF
PHILIPPINE DOMESTIC SHIPPING, SHIPBUILDING, AND SHIP
REPAIR AND SHIP BREAKING, ORDAINING REFORMS IN
GOVERNMENT POLICIES TOWARDS SHIPPING IN THE
PHILIPPINES, AND FOR OTHER PURPOSES.
Pursuant to Paragraph 1%, &ection 10 of R! o. '('), this *mplementing Rules and
Regulations +*RR, of Republic !ct o. '('), other-ise .no-n as the Domestic
&hipping De"elopment !ct of (00/, is hereb0 promulgated1
RULE I
GENERAL PROVISIONS
Sect!" #. Objectives of the Act - This *RR is hereb0 prescribed to carr0 out the
ob2ecti"e to de"elop a strong, modern, safe and competiti"e domestic merchant fleet
o-ned and controlled b0 3ilipinos or b0 corporations at least si4t0 percent +506, of
the capital of -hich is o-ned b0 3ilipinos and manned b0 7ualified 3ilipino officers
and cre-, -hich shall1
1.1 Bridge our islands b0 ensuring safe, reliable, efficient, ade7uate and
economical passenger and cargo ser"ice8
1.( #ncourage the dispersal of industr0 and the economic de"elopment of
our regional communities b0 ensuring the a"ailabilit0 of regular, reliable
and efficient shipping ser"ices8
1.9 #nsure the gro-th of e4ports b0 pro"iding necessar0, competiti"e and
economical domestic sea lin.ages8
1./ &er"e as na"al and militar0 au4iliar0 in times of -ar and other national
emergencies8 and,
1.) 3unction as an emplo0ment support base for our 3ilipino seafarers.
Sect!" 2. Policy of the Act - The follo-ing policies are hereb0 declared1
(.1. Promote deregulation in the domestic shipping industr0, encourage
effecti"e competition, free enterprise and mar.et dri"en rates that are
sensiti"e to the demands of the public8
(.(. Promote 3ilipino o-nership of "essels operated under the Philippine
flag8
1
(.9. !ttract pri"ate capital to in"est in the shipping industr0 b0 creating a
health0 and competiti"e in"estment and operating en"ironment8
(./. Pro"ide necessar0 assistance and incenti"es for the continued gro-th
of the Philippine domestic marine fleet8
(.). #ncourage the impro"ement and upgrading of the e4isting domestic
merchant marine fleet and 3ilipino cre- to meet international standards8
(.5. #nsure the continued "iabilit0 of domestic shipping operations8 and,
(.%. #ncourage the de"elopment of a "iable shipbuilding and ship repair
industr0 to support the e4pansion and moderni:ation of the Philippine
domestic merchant marine fleet and its strict adherence to safet0
standards -hich -ill ensure the sea-orthiness of all sea;borne
structures.
Sect!" $. Definition of Terms < !s used in and for purposes of this *RR, the
follo-ing terms, -hether in singular or plural, are hereb0 defined as follo-s1
%Act& refers to Republic !ct o. '('), entitled1 =!n !ct Promoting the
De"elopment of Philippine Domestic &hipping, &hipbuilding, &hip Repair, and &hip
Brea.ing, >rdaining Reforms in ?o"ernment Policies To-ards &hipping in the
Philippines, and 3or >ther Purposes@, other-ise .no-n as the =Domestic &hipping
De"elopment !ct of (00/@8
%Administration& refers to the $aritime *ndustr0 !uthorit0 or $!R*!8
%Capital Equipment& refers to the ship0ard e7uipment and machiner0,
including ma2or components thereof, and other mechanical or electrical apparatus,
-hether fi4ed or mo"able, needed for the construction, repair, or brea.ing of ships8
%Cargo Handling Equipment& refers to an0 machiner0, gear or e7uipment
used b0 the ship operator or a dul0 authori:ed and licensed port operator to ser"ice
or handle cargo, on board the "essel, at the pier, or in the terminal or container 0ard
such as, but not limited to, cranes, for.lifts, top lifts, stac.ers, tractor heads,
containers, pallet boards, and the li.e, including all spare parts, replacement parts,
appurtenances, accessories, articles, supplies and materials thereof8
%Classed hips& refer to ships that are designed, constructed andAor
maintained in accordance -ith the rules and standards of a $!R*!;recogni:ed or
accredited classification societ08
%Classification ociety& refers to a non;profit organi:ation recogni:ed or
accredited b0 the $!R*!, -hich has the capabilit0 and competence to determine
the fitness for continued ser"ice of a shipBs hull structure, mechanical and electrical
e7uipment, pro"ide classification and construction design as -ell as periodic through;
life compliance "erification of ships -ith the rules and standards set b0 the
organi:ation, issue necessar0 certifications re7uired b0 the regulations of the
!uthorit0 and b0 international con"entions and codes of the *nternational $aritime
>rgani:ation +*$>,, as -ell as pro"ide such ser"ices comprising technical support,
research and de"elopment on ship design and maintenance8
%Commissioning of the hip& refers to the ceremon0 mandating the
beginning of acti"e ser"ice of the ship or beginning of the shipBs acti"e ser"ice, -hich
ma0 refer to the date of launching, if a"ailable, or 0ear built8
2
!Certificate of Public Convenience "CPC#$ refers to an authorit0 granted to
a sole proprietor, partnership, cooperati"e, corporation, association to pro"ide
shipping ser"ice o"er a specified area or route, and lea"ing to it the fle4ibilit0 to
deplo0 ships to perform such ser"ice8
%Domestic hipping% refers to the transport of passengers or cargo, or both,
b0 ships dul0 registered and licensed under Philippine la- to engage in trade and
commerce bet-een Philippine ports and -ithin Philippine territorial or internal -aters,
for hire or compensation, -ith general or limited clientele, -hether permanent,
occasional or incidental, -ith or -ithout fi4ed routes, and done for contractual or
commercial purposes.
%Domestic hip Operator' or 'Domestic hip O&nerC -hich ma0 be used
interchangeabl0 shall refer to a citi:en of the Philippines, or a commercial partnership
-holl0 o-ned b0 3ilipinos, or a corporation at least si4t0 percent +506, of the capital
of -hich is o-ned b0 3ilipinos, -hich is dul0 accredited b0 the $!R*! under
$emorandum Circular o. %'A%';! or their subse7uent amendments to engage in
the business of domestic shipping, -hich ma0 include cooperati"e or association dul0
registered -ith rele"ant go"ernment agenc08
%Domestic Trade' refers to the sale, barter or e4change of goods, materials
or products -ithin the Philippines8
!Effective Competition$ refers to the state -here the mar.et is able to
function effecti"el0 and bring about economic efficienc0 -ith the concurrence of all of
the follo-ing conditions1
a, $ar.et forces operate freel0 as -hen mar.et is able to perform its price
allocation function properl08
b, o barriers to entr0Ae4it8 and,
c, Le"el pla0ing field is -hen operators are on the same plane and no
operator can -ield po-er to abuse the mar.et b0 ha"ing the abilit0 to
manipulate or dictate rates or carr0ing capacit0 of ships.
%Engine& refers to the main propulsion engine andAor the au4iliar0 engine of a
ship8
%High peed Passenger Craft& refers to a craft capable of ma4imum speed
in meters per second +mAs, e7ual to or e4ceeding1
$.()
).#**(
-here1 D displacement corresponding to the design
-aterline in $
9
8
e4cluding craft the hull of -hich is supported completel0 clear abo"e the -ater
surface in non;displacement mode b0 aerod0namic forces generated b0 ground
effect.
%'mportation& refers to the direct purchase, lease or charter of ne-l0
constructed or pre"iousl0 o-ned ships, or the purchase of a shipBs spare parts, from
foreign sources or from registered enterprises operating in special economic :ones
as this term is defined in Republic !ct o. %'15 entitled =The &pecial #conomic Eone
!ct of 1'')@. *mportation also includes the purchase of na"igational, communication,
3
safet0, rescue and life sa"ing e7uipment, ship0ardsB capital e7uipment, machiner0
and its spare parts8
%'nsurance Company& refers to an0 corporation or entit0 dul0
authori:edAlicensed under Philippine la-s to engage in the business of marine
insurance and dul0 registered -ith the *nsurance Commission8
!afety Appliances and Equipment$ refers to those appliancesAe7uipment
+i.e. na"igational, communication, fire fighting, life;sa"ing, referred to in &>L!& 1'%/,
Chapter ***, &ections ! and B, and the P$$RR 1''% Chapters F**, *G, G and G* or
their amendments, and other rele"ant safet0 rules, regulations and codes8
%(A)'*A+registered Domestic hipo&ner,Operator& refers to accredited
Domestic &hipo-nerA>perator under $!R*! $C %'A%';! or their subse7uent
amendments.
%(A)'*A+registered hipyards- hipbuilders and,or hip )epairers&
refers to licensed ship0ards, shipbuilders andAor ship repairers under $!R*! $C ')
or its subse7uent amendments8
%(etal Plates& refers to the steel plates, marine;grade aluminum plates or
other metal plates, used for the construction, repair, reno"ation, con"ersion or
alteration of the ship8
%(issionary )oute& refers to a route in"ol"ing one or more areas that ha"e
either an e4isting non;regular shipping ser"ice or no e4isting shipping ser"ices due to
geographic limitations and absence of economic and mar.et "iabilit08
!(onopoly$ refers to a form of mar.et structure in -hich one or onl0 a fe-
entitiesAcompanies dominate the total shipping ser"ice in a particular routeAlin.8
%hip% or %.essel% -hich ma0 be used interchangeabl0 shall refer to an0
.ind, class or t0pe of craft or artificial contri"ance capable of floating in -ater,
designed to be used, or capable of being used, as a means of -ater transport in the
domestic trade for the carriage of passengers or cargo, or both, utili:ing its o-n
moti"e po-er or that of another8
'hipbuilding' refers to the design, construction, launching and outfitting of
all t0pes of ships and -atercraft8
%hipper& an0 person, partnership or corporation, or third part0 -ho are doing
business of for-arding or consolidation, -ho shall procure for itself the ser"ices of a
domestic shipo-nerAoperator for the carriage of its cargo in the domestic trade upon
pa0ment of proper compensation8
'hip repair' refers to the o"erhaul, refurbishment, reno"ation, impro"ement,
or alteration of the hull, machineries, e7uipment, outfits and components of all t0pes
of ships8
%hipyard& refers to the shipbuilding or repair facilities -hich ha"e the
capabilit0 to put "essels out of -ater in a dr0doc. or to put "essels abo"e the -ater
surface in order to effect ship -or. on "essels, appendages, structure, machiner0
and e7uipment8
'hipbuilder' or 'hip repairer' refers to a citi:en of the Philippines, or a
commercial partnership o-ned b0 ma2orit0 of 3ilipinos, or a corporation incorporated
4
under the la-s of the Philippines, the capital of -hich is o-ned or controlled in an0
proportion b0 3ilipinos or b0 foreign nationals, or b0 corporation -hether 3ilipino or
foreign;o-ned, -hich is dul0 authori:ed b0 the $!R*! to engage in the business of
shipbuilding or ship repair or to other-ise operate a ship0ard, gra"ing doc. or marine
repair 0ard8 and
%pare Parts& refers to the replacement parts or components of a "essel,
including but not limited to its hull, engines, machineries, e7uipment, appurtenances,
necessaries, accessories, articles, supplies, materials, steel plates, aluminum plates,
other metal plates, communications e7uipment, and other parts or components
thereof, installed aboard the ship necessar0 for its safe and efficient na"igation and
operation.
RULE II
+URISDICTION, POWERS, AND DUTIES OF MARINA
Sect!" #. /urisdiction0 Po&ers0 and Duties of (A)'*A. < The $!R*! shall
ha"e the po-er and authorit0 to1
1.1 Register "essels8
1.( *ssue certificates of public con"enience, or an0 e4tensions or
amendments thereto, authori:ing the operation of all .inds, classes
and t0pes of "essels in domestic shipping1 Pro"ided, That no such
certificate shall be "alid for a period of more than t-ent0;fi"e +(),
0ears8
1.9 $odif0, suspend or re"o.e at an0 time, upon notice and hearing,
an0 certificate, license or accreditation it ma0 ha"e issued to an0
domestic shipo-nerAoperator8
1./ #stablish and prescribe routes, :ones of areas of operations of
domestic shipo-nersAoperators8
1.) Re7uire an0 domestic shipo-nerAoperator to pro"ide shipping
ser"ices to an0 coastal area, island or region in the countr0 -here
such ser"ices are necessar0 for the de"elopment of the area, to
meet emergenc0 sealift re7uirements, or -hen public interest so
re7uires8
1.5 &et safet0 standards for "essels in accordance -ith applicable
con"entions and regulations8
1.% Re7uire all domestic shipo-nersAoperators to compl0 -ith
operational and safet0 standards for "essels set b0 applicable
con"entions and regulations, maintain its "essels in safe and
ser"iceable condition, meet the standards of safet0 of life at sea and
safe manning re7uirements, and furnish safe, ade7uate, efficient,
reliable and proper ser"ice at all times8
1.H *nspect all "essels to ensure and enforce compliance -ith safet0
standards and other regulations8
5
1.' #nsure that all domestic shipo-nersAoperators shall ha"e the
financial capacit0 to pro"ide and sustain safe, reliable, efficient and
economical passenger or cargo ser"ice, or both8
1.10 Determine the impact -hich an0 ne- ser"ice shall ha"e to the
localit0 it -ill ser"e8
1.11 !dopt and enforce such rules and regulations -hich -ill ensure
compliance b0 e"er0 domestic shipo-nerAoperator -ith re7uired
safet0 standards and other rules and regulations on "essels safet08
1.1( !dopt such rules and regulations -hich ensure the reasonable
stabilit0 of passengers and freight rates and, if necessar0, to
inter"ene in order to protect public interest8
1.19 Iear and ad2udicate an0 complaint made in -riting in"ol"ing an0
"iolation of the la- or the rules and regulations of the !uthorit08
1.1/ *mpose such fines and penalties on, including the re"ocation of
licenses of, an0 domestic shipo-nerAoperator -ho shall fail to
maintain its "essels in safe and ser"iceable condition, or -ho shall
"iolate or fail to compl0 -ith safet0 regulations8
1.1) *n"estigate an0 complaint made in -riting against an0 domestic
shipo-nerAoperator, or an0 shipper, or an0 group of shippers
regarding an0 matters in"ol"ing "iolations of the pro"isions of the
!ct and this *RR8
1.15 Upon notice and hearing, impose such fines, suspend or re"o.e
certificates of public con"enience or other license issued, or
other-ise penali:e an0 shipo-nerAoperator, shipper or group of
shippers found "iolating the pro"isions of the !ct and this *RR8 and,
1.1% *ssue rules and regulations necessar0 to implement the pro"isions
of the !ct and this *RR1 Pro"ided, that the rules and regulations
cannot change or in an0 -a0 amend or be contrar0 to the intent and
purposes of the !ct and this *RR.
RULE III
INVESTMENT INCENTIVES
FOR DOMESTIC SHIPOWNERS-OPERATORS

Sect!" #. 'nvestment 'ncentives < To ensure the continued "iabilit0, and, to
encourage in"estments in the domestic shipping industr0, the follo-ing incenti"es
shall be granted to 7ualified domestic shipo-nersAoperators1
.11 V./0e1A22e2 T.3 4VAT5 E3e67t!" ; !ll $!R*!;registered domestic
shipo-nersAoperators shall be e4empt from pa0ment of F!T for the
follo-ing1
1..1.1 *mportation of passenger andAor cargo ships 1)0 ?T and abo"e,
including engine and spare parts of the particular ship+s,
6
imported8 pro"ided, that the ships to be imported shall compl0
-ith the follo-ing re7uirements1

T0pe $a4imum !ge from original
date of commissioning
Passenger andAor Cargo &hips 1) 0ears old
Tan.ers 10 0ears old
Iigh &peed Passenger Crafts ) 0ears old
1..1.( *mportation of life;sa"ing e7uipment, fire fighting s0stems, safet0
and rescue e7uipment, communication and na"igational safet0
e7uipment, steel plates, and other metal plates including marine;
grade aluminum plates, used for transport operations.
1..1.9 *mportation of Cargo Iandling #7uipment that are reasonabl0
needed and be used e4clusi"el0 b0 the registered domestic
shipo-nerAoperator in its transport operations.
1..1./ &ale, Transfer or Disposition of articles co"ered under 1.1.1 to
1.1.9 hereof.
1.(Net O7e8.t"9 L!:: C.88; O<e8 ; ! net operating loss in an0 ta4able 0ear
immediatel0 preceding the current ta4able 0ear, -hich had not been
pre"iousl0 offset as a deduction from gross income shall be carried o"er
for the ne4t three +9, consecuti"e ta4able 0ears immediatel0 follo-ing
the 0ear of such loss sub2ect to the pertinent pro"isions of the ational
*nternal Re"enue Code of 1''%, as amended.
The $!R*!;registered domestic shipo-nerAoperator a"ailing of this
incenti"e shall furnish the $!R*! in -riting on or before the end of
$a0 each 0ear and e"er0 0ear thereafter a cop0 of the !udited !nnual
>perating +3inancial, Report stamped recei"ed b0 the B*R.
1.9Acce/e8.te2 De78ec.t!" ; 3i4ed assets ma0 be depreciated as follo-s1
1.9.1 To the e4tent of not more than t-ice as fast as the normal rate of
depreciation or depreciated at normal rate of depreciation if the
e4pected life is ten +10, 0ears or less8 or
1.9.( Depreciation o"er an0 number of 0ears bet-een fi"e +), 0ears
and the e4pected life if the latter is more than ten +10, 0ears, and
the depreciation thereon allo-ed as deduction from ta4able
income.
The $!R*!;registered domestic shipo-nerAoperator a"ailing of this
incenti"e can depreciate their fi4ed assets in t-o +(, methods, abo"e;
cited, -ho shall notif0 the B*R at the beginning of the depreciation
period -hich depreciation method -ill be used. Cop0 of such notice to
the B*R shall be submitted to the $!R*!.
Sect!" 2. 1ho may qualify - >nl0 $!R*!;registered domestic
shipo-nersAoperators ma0 a"ail of the incenti"es under the !ct.
7
Sect!" $. Conditions for the Availment of .AT E2emption - The importation of
the articles under &ection 1 hereof shall be granted e4emption from F!T
sub2ect to the follo-ing conditions1
9.1 &aid articles are not manufactured domesticall0 in sufficient 7uantit0, of
comparable 7ualit0 and at reasonable prices, to be determined b0 the
$!R*!8
9.( &aid articles are directl0 imported b0 a $!R*!;registered domestic
shipo-nerAoperator8
9.9 &aid articles are reasonabl0;needed and -ill be used e4clusi"el0 b0 the
registered domestic shipo-nerAoperator in its transport operations8
9./ The appro"al of $!R*! -as obtained prior to the importation of said
articles8
9.) The applicantAimporter shall compl0 -ith rele"ant rules and regulations
of the Bureau of Customs8 and,
9.5 #4emption from F!T on the importation of said articles shall be granted
to all $!R*! registered domestic shipo-nersAoperators -ithin a period
of ten +10, 0ears from the effecti"it0 of the !ct.
Sect!" =. 3imitations,)estrictions on ale- Transfer or Disposition of
'mported Articles < !n0 sale, transfer or disposition of articles enumerated under
&ection 1 hereof shall be sub2ect to the follo-ing limitationsArestrictions1
/.1!n0 sale, transfer or disposition of articles -ithin ten +10, 0ears from the
effecti"it0 of the !ct to another $!R*!;registered domestic
shipo-nersAoperators en2o0ing similar incenti"e shall re7uire prior
appro"al of $!R*!8
/.(!n0 sale, transfer or disposition made to non;e4empt entit0 or to a part0
other than a $!R*!;registered domestic shipo-nerAoperator, -ithin
ten +10, 0ears from the effecti"it0 of the !ct, both the "endor and the
transferee or assignee shall be solidaril0 liable to pa0 t-ice the amount
of F!T -ai"ed8
/.9!n0 sale, transfer or disposition made after ten +10, 0ears from the
effecti"it0 of the !ct shall be made b0 informing $!R*! in -riting.
Purchasers, transferees or recipients shall be considered the importers
thereof, -ho shall be liable for an0 internal re"enue ta4 on such
importation. Ta4 due on such importation shall constitute a lien on the
goods superior to all charges or liens on the goods, irrespecti"e of the
possessor thereof8
/./3ailure to secure an !uthorit0 to &ell, Transfer or Dispose from $!R*!
prior to sale, transfer or disposition, both the "endor and the transferee
or assignee shall be liable to pa0 t-ice the amount of F!T e4emption
gi"en him.
Sect!" 5. A77/c.t!" >!8 Authority to 'mport or ell- Transfer or Dispose
'mported Articles
8
).1 !ll applications for !uthorit0 to *mport shall be filed under oath -ith the
$!R*! together -ith the submission of a &-orn Certification that the
conditions under &ections 9.1 to 9.9 hereof are present and the
re7uired documents co"ering applications for +a, *mportation of &hips
and +b, *mportation of #ngine, &pare Parts, #7uipment, Cargo Iandling
#7uipment, andAor Plates prescribed under $!R*! $C 15' entitled,
&treamlined Chec.list of Documentar0 Re7uirements and Rationali:ed
&tandard Processing Time, or its subse7uent amendments and proof of
pa0ment of processing fee per $!R*! $C 1H9 or its subse7uent
amendments.
The authorit0 to import shall be "alid -ithin ninet0 +'0, da0s from the
date of opening of the Letter of Credit or submission of proof of
pa0ment of ac7uired articles8
).(!ll applications to sell, transfer or dispose of articles imported under 1.1.1
to 1.1.9 hereof shall be filed -ith $!R*! together -ith the submission
of the follo-ing documents1
).(.1 &ale, Transfer or Disposition of *mported &hips
a. Letter of !pplication8
b. Dul0 notari:ed $emorandum of !greement +$>!,ADeed
of &ale +D>&, or Bill of &ale +B>&,8
c. Dul0 notari:ed resolution of the compan0Bs Board of
Directors, certified b0 the Board &ecretar0, authori:ing the
filing of application and authori:ing the signator0 to the
$>!AD>& or B>& to act for and in behalf of the
"endorAseller, if applicable8
d. Cop0 of Certificates of >-nership and Fessel Registr0
+C>ACFR,8 and,J
e. Proof of pa0ment of processing fee per $!R*! $C 1H9
or its subse7uent amendments.
).(.( &ale, Transfer or Disposition of *mported #ngine, &pare Parts,
#7uipment, Cargo Iandling #7uipment, andAor Plates
a. Letter of !pplication8
b. Dul0 notari:ed $emorandum of !greement +$>!,ADeed of
&ale +D>&, or Bill of &ale +B>&,8 and,
c. Proof of pa0ment of processing fee per $!R*! $C 1H9 or
its subse7uent amendments.
Sect!" *. Application for Availment of E2emption from .AT !ll applications
for F!T;#4emption on $!R*!;appro"ed importation and sale, transfer or disposition
of imported ships, engines, spare parts, cargo handling e7uipment andAor plates shall
be filed under oath -ith the $!R*!, and shall be issued a Kualification Certificate
attesting that the applicant possesses the 7ualifications for a"ailment of F!T
#4emption, upon compliance -ith the follo-ing documentar0 re7uirements1
9
5.1. Dul0 accomplished $!R*!;prescribed !pplication 3orm for !"ailment
of F!T;#4emption8 and,
5.(. Proof of pa0ment of processing fee in the amount of Php900.00.
Sect!" (. )eportorial )equirement ? !ll $!R*! registered domestic
shipo-nersAoperators -ho a"ailed of the F!T;#4emption shall compl0 -ith the
follo-ing1
%.1&ubmission of a Kuarterl0 Report on the utili:ation, sale, transfer or
disposition of articles imported or sold, transferred or disposed under
the !ct and this *RR on or before the 1)
th
of the month after the end of
each 7uarter.
%.(&ubmission on or before 1)
th
of Lanuar0 each 0ear a &ummari:ed Report
on the utili:ation, sale, transfer or disposition of articles imported or
sold, transferred or disposed under the !ct and this *RR.

RULE IV
DEREGULATION OF THE DOMESTIC
SHIPPING INDUSTRY 1 AUTHORITY OF
THE MARITIME INDUSTRY AUTHORITY
Sect!" #. Authority to Operate ; o franchise, certificate or an0 other form of
authori:ation for the carriage of cargo or passenger, or both, in the domestic trade,
shall be granted e4cept to domestic shipo-nersAoperators.
Sect!" 2. 'ssuance of CPC < The $!R*!, in the e4ercise of its 7uasi;2udicial
function, shall ha"e the po-er and authorit0 to issue Certificate of Public
Con"enience +CPC, or an0 amendmentsAe4tensionsA rene-als thereto, to a sole
proprietorApartnershipAcooperati"eAcorporationAassociation, ta.ing into consideration
the economic and beneficial effect -hich the proposed ser"ice shall ha"e to the port,
pro"ince or region -hich it proposes to ser"e, and the financial capacit0 of the
domestic shipo-nerAoperator to pro"ide and sustain safe, reliable, ade7uate, efficient
and economical ser"ice in accordance -ith the standards set b0 go"ernment
regulations.
#"er0 domestic shipo-nerAoperator shall state in its application the route+s, it
proposes to ser"e, and the ser"ice+s, it proposes to offer. Domestic
shipo-nersAoperators -ho do not intend to operate in a fi4ed route+s, shall
ne"ertheless state in its application the ser"ice+s, it proposes to offer.
Sect!" $. CPC Amendment < !n application for amendment to the CPC shall be
re7uired under an0 of, but not limited to, the follo-ing instances1
9.1 Permanent !ddition or Deletion of a routeAportAlin.8 or,
9.( Permanent !dditionAReductionAReplacement of &hipA3leet or Change in
&hipBs ame8 or,
10
9.9 Change in the legal personalit0 of the grantee of the CPC, merger,
consolidation of the entit0Acompan0, including sale, transfer or
disposition to e4isting CPC grantees8 or,
9./ Change in name of the entit0AcorporationApartnershipAcooperati"e.
Sect!" =. Other Types of Operations )equired to ecure CPC <
>-nersAoperators of ships engaged in other t0pes of operations, for hire or
compensation, such as, tug and barge operations, ferr0 operationsAser"ices, either
offered b0 resortAhotel o-ners andAor catering to tourism and leisureAsports;related
acti"ities, as -ell as companies, associations or indi"iduals -ho operate ships for
their o-n use but offering their ships, for hire or compensation, -hether permanent,
occasional or incidental, -ith general or limited clientele, shall be re7uired to secure
CPC.
Sect!" 5. .alidity of CPC ; The $!R*! shall ha"e the po-er and authorit0 to
issue a CPC to a domestic shipo-nerAoperator of ship+s, -hose hull is made of
materials other than -ood, as follo-s1
Ye.8: !> O7e8.t!" V./2t; !> CPC
$ore than 10 0ears () 0ears
$ore than ) 0ears up to 10 0ears 1) 0ears
) 0ears and belo- 10 0ears
3or domestic shipo-nersAoperators of -ooden;hulled ships, the CPC shall be
"alid for a period of fi"e +), 0ears. 3or domestic shipo-nersAoperators operating
ships -hose hull are made of -ood, steel andAor other materials, the CPC shall be
"alid for a period of fi"e +), 0ears.
3or domestic ship operators -hose ships are chartered, the CPC shall be
"alid for a period co;terminus -ith the $!R*! charter appro"al granted to the ship
-ith the longest charter period.

The abo"e pro"isions are -ithout pre2udice to the mandator0 "essel
retirement program for unclassed ships under Rule GF*** hereof.
Sect!" *. 4ualification )equirements !pplicant shipo-nerAoperator for a CPC
must possessAcompl0 -ith the follo-ing1

5.1$ust be a $!R*!;registered shipo-nerAoperator per $!R*! $C %'A%';
! or their subse7uent amendments8
5.($ust be financiall0 capable to pro"ide and sustain safe, reliable, ade7uate,
efficient and economical ser"ice in underta.ing the proposed shipping
ser"ice. The applicant is deemed financiall0 capable if it can be sho-n
that there is e4cess in capitali:ation using the formula belo-, unless
re"isedAamended1
C.7t./@.t!" A 4EB0t; ? >3e2 .::et: "et !> /!"91te86 /.C/te:5 D
t!t./ 2e78ec.t!"
5.9$ust pro"ide a ser"ice that has economic and beneficial effect on the port,
pro"ince or region it proposes to ser"e, to be determined b0 the
$!R*! on the basis of an0 of the documents enumerated in
subsection %.1.5 herein.
11
Sect!" (. Documentary )equirements ? The applicant shall submit the follo-ing
documentar0 re7uirements in support of its application1
%.1 F!8 NeE-E3te":!"-Re"eE./ !> CPCF
1.1 Dul0 accomplished !pplication 3orm prescribed b0 the $!R*!8
1.( Cop0 of Certificate of !ccreditation under $C %'A%';! and their
amendments8
1.9 UpdatedALatest !rticles of *ncorporation and B0;La-s for
corporations8 or !rticles of Partnership for partnerships8 or DT*
Certificate of Registration of Business ame for single
proprietorships8 or !rticles of Cooperation for cooperati"es8
1./ 3inancial &tatements8
1.) &hipBs Documents1
a. Certificate of Fessel Registr0 +CFR,8
b. Certificate of >-nership +C>,8 and,
c. Coast-ise License +CML, or Ba0 and Ri"er License +BRL,, or
Pleasure Nacht License +PNL,8
1.5 !n0 of the follo-ing documents sho-ing economic and beneficial
effect1
a. The estimated port dues and charges that are e4pected to be
paid for the proposed ser"ice, and the estimated increase in
the "olume of passengers and cargoes to be transported in
the route proposed to be ser"ed8 or,
b. The estimated amount of ta4es to be paid to the local
go"ernment units -here the intended ser"ice -ill be
pro"ided8 or,
c. &angguniang Ba0anAPanlala-igan Resolution on the
percei"ed economic benefit to the to-nApro"ince -here the
applicant proposes to ser"e8 or,
d. The estimated number of emplo0ment that ma0 be generated
in the proposed ser"ice8 or,
e. !n0 stud0 sho-ing probable economicAbeneficial effect to the
port, pro"ince or region it proposes to ser"e.
1.% &hip &afet0 Documents1
a. &hip &afet0 Certificates8
a.1 3or Passenger &hips1
i. Passenger &hip &afet0 Certificate8 and,
ii. $inimum &afe $anning Certificate8
a.( 3or Cargo &hips1
12
i. Cargo &hip &afet0 Certificate8 and,
ii. $inimum &afe $anning Certificate8
a.9 3or Tan.ers1
i. Cargo &hip &afet0 Construction Certificate8
ii. Cargo &hip &afet0 #7uipment Certificate8
iii. Certificate of 3itness8 and,
i". $inimum &afe $anning Certificate8
a./ 3or Tugs, Dredgers and Barges1
i. Cargo &hip &afet0 Certificate8 and,
ii. $inimum &afe $anning Certificate8
a.) 3or Iigh &peed Crafts1
i. Iigh &peed Craft &afet0 Certificate8 and,
ii. $inimum &afe $anning Certificate8
a.5 3or >ther &hips1
i. PassengerACargo &hip &afet0 Certificate8 and,
ii. $inimum &afe $anning Certificate8
a.% &uch other certificatesAdocuments as ma0 be
prescribed b0 the $!R*!.
b. Class Certificate8
c. RadioA&hip &tation License +R&LA&&L,8
d. Document of Compliance +D>C,8 and,
e. &afet0 $anagement Certificate +&$C,8
%.1.H Passenger andAor Cargo *nsurance Co"erage8
%.1.' >ther additional insurance andAor PO* Co"er8
%.1.10 Ci"il Liabilit0 Con"ention +CLC, Certificate for Tan.ers and
Barges carr0ing Persistent >il8
%.1.11 Certificate of Compliance under $!R*! $C os. 5)A5);!8 1(18
19/8 1)08 and 1'5, including compliance -ith $!R*! $C os.
%(8 'H8 19)8 and 195, as applicable, and their subse7uent
amendments8
%.1.1( Pictures of the ship, sho-ing the name, port side, starboard side
and astern "ie- +-ith the si:e of )@ 4 %@,8 and,
%.1.19 Proof of Pa0ment of Processing 3ee+s, pursuant to $!R*! $C
1H9 and its subse7uent amendment+s,8
%.( 3or !mendment of CPC1
13
%.(.1 Permanent !ddition or Deletion of a routeAportAlin.1
a. !pplication for !mendment of CPC stating the reason+s,
thereof8
b. 3or additional routeAportAlin., documents sho-ing economic
and beneficial effect pursuant subsection %.1.5 of this Rule8
c. Proof of Pa0ment of Processing 3ee+s, pursuant to $!R*!
$C 1H9 and its subse7uent amendment+s,8
%.(.( Permanent !dditionAReductionAReplacement of &hipA3leet or
Change in &hipBs ame1
a. !pplication for !mendment of CPC identif0ing the ship to be
addedAdeletedAreplaced and reason+s, thereof8
b. 3inancial &tatements to reflect changesAad2ustments in the
capitali:ation re7uirement, as applicable8
c. Rele"ant documents under subsection %.1.), %.1.% up to
%.1.1(, as applicable8
d. Proof of Pa0ment of Processing 3ee+s, pursuant to $!R*!
$C 1H9 and its subse7uent amendment+s,8
%.(.9 Change in the legal personalit0 of the grantee of the CPC in
cases enumerated under &ection 9.9 hereof1
a. !pplication 3orm stating the change in the legal personalit0 of
the grantee of the CPC, merger, consolidation or sale,
transfer, or disposition to e4isting CPC grantees8
b. !mended Certificate of !ccreditation under $!R*! $C
%'A%';! and their subse7uent amendments8
c. !mended !rticles of *ncorporationAPartnership and &#C
Certificate of Registration or e- Certificate of Registration of
Business ame for &ingle Proprietorship or !mended !rticles
of Cooperation and CD! Certificate of Registration8
d. &hip documentsAship safet0 certificates under &ection %.1.),
%.1.% up to %.1.1( sho-ing the ne- registered o-ner, as
applicable8
e. Proof of Pa0ment of Processing 3ee+s, pursuant to $!R*!
$C 1H9 and its subse7uent amendment+s,8
%.(./ Change in name of the entit0AcorporationApartnershipA
cooperati"e1
a. !pplication 3orm stating the change in name of the
entit0AcorporationApartnershipAcooperati"e8
b. !mended !rticles of *ncorporationAPartnership and &#C
Certificate of Registration or e- Certificate of Registration of
14
Business ame for &ingle Proprietorship or !mended !rticles
of Cooperation and CD! Certificate of Registration8
c. &hip documentsAship safet0 certificates under &ection %.1.),
%.1.% up to %.1.1( sho-ing the ne- registered o-ner, as
applicable8
d. Proof of Pa0ment of Processing 3ee+s, pursuant to $!R*!
$C 1H9 and its subse7uent amendment+s,8
*t is understood that the re7uirements stated in the preceding subsections
%.1.) as applicable, %.1.% up to %.1.1( must be "alid for the duration of the shipBs
operation. The dul0 rene-edAupdatedA"alid re7uirements shall be submitted -ithin
fifteen +1), da0s prior to their e4piration.
Sect!" G. /urisdictional )equirements 5 Proof of compliance -ith the
2urisdictional re7uirements -ill be presented b0 applicant in a summar0 proceeding,
as follo-s1
H.1 !ffida"it of publication -ith the ne-spaper clipping8
H.( Cop0 of the -hole ne-spaper -here the >rder -as published8
H.9 Photographs sho-ing proof of the re7uired posting of >rder.
Sect!" 9. Procedure and tandard Processing Time in the 'ssuance of CPC
and,or Amendments,E2tensions,)ene&als ? The follo-ing procedure, and
standard processing time in the issuance of CPC andAor amendmentsA
e4tensionsArene-als thereof are hereb0 adopted1
'.1 P8!ce208e " tHe I::0."ce !> CPCF
'.1.1 F!8 NeE-E3te":!"-Re"eE./F
a. The application for issuance of CPC shall be filed -ith the
Central >ffice or the $aritime Regional >ffice -here the
applicant has its principal place of business or office8
b. >nl0 applications -ith complete and "alid documentar0
re7uirements as pro"ided in &ection % hereof shall be
accepted. !pplications -ith incomplete re7uirements shall be
returned to the applicant8
c. 3or liner operations, the applicant shall state in its application
the name+s, of the ship+s,, route+s, it proposes to ser"e, and
the ser"ice it proposes to offer. 3or tramp and other t0pes of
operations, the applicant shall state in its application the
name+s, of the ship+s,, the proposed area+s, of operation and
the ser"ice it proposes to offer8
d. Upon acceptance of the application, an >rder shall be issued
re7uiring the applicant to cause the publication of said >rder
containing therein the name+s, of the ship, the t0pe of
ser"ice, shipBs routing pattern, sailing fre7uenc0+ies,, sailing
schedule+s, and the rate+s, to be adopted, in an0 of the fi"e
+), ma2or ne-spaper of national circulation, if the
15
route+s,Aarea+s, of operation to be ser"ed is national andAor
inter;regional in scope. *f the route+s,Aarea+s, to be ser"ed is
local or intra;regional in scope, publication in a ne-spaper of
local circulation is sufficient8
e. The applicant shall simultaneousl0 cause the posting of the
aforementioned >rder in conspicuous places of the affected
ports, ships, granteeBs premises, passenger terminals and
tic.eting offices8
f. The $!R*! shall cause the posting of such >rder at the
$!R*! Central or Regional >ffices andAor the $!R*!
-ebsite8
g. The !pplicant shall present the 2urisdictional, 7ualification and
documentar0 re7uirements in a summar0 proceeding to be
conducted in the $!R*! Central or Regional >ffice -here
the application -as filed, -ithin se"en +%, da0s from date of
publicationAposting. !pplicant -ill be re7uired to ma.e a
-ritten 3ormal >ffer of #"idence +3>#, and submit his
application for resolutionAdecision8
h. Upon fa"orable e"aluation of the 2urisdictional, 7ualification
and documentar0 re7uirements prescribed under &ections 5,
% and H hereof, a Decision granting the !pplication and
attaching the CPC -ill be issued to the applicant indicating
therein the period of "alidit0 of the CPC, name of operator,
name of ship, and routing pattern8
i. !n applicant -ho does not meet the 2urisdictionalA
7ualificationAdocumentar0 re7uirements shall be issued an
>rder of Denial, or shall in -riting, be re7uired to rectif0 noted
deficiencies, or to submit document+s, deemed necessar08
2. !n0 subse7uent change in the shipBs sailing fre7uenc0+ies,,
sailing schedule+s, and rate+s, shall be published and posted
se"en +%, da0s before adoption thereof, and proof thereof
shall be submitted to $!R*! for posting in the -ebsite.

'.1.( F!8 A6e"26e"tF
a. The application for amendment of CPC stating therein the
specific amendment sought to be appro"ed shall be filed -ith
the Central >ffice or the $aritime Regional >ffice -here the
applicant has its principal place of business or office8
b. >nl0 applications -ith complete and "alid documentar0
re7uirements as pro"ided in subsection %.( hereof shall be
accepted. !pplications -ith incomplete re7uirements shall be
returned to the applicant. ! subse7uent >rder shall be issued
re7uiring the applicant to publish and post the amended
application.
c. *n cases falling under &ections 9.1 and 9.( hereof, upon
acceptance of the application for amendment of CPC, the
applicant shall cause the publication of the >rder stating
16
therein the applicable amendments under &ection 9 being
sought, in an0 of the fi"e +), ma2or ne-spaper of national
circulation, if the route+s,Aarea+s, of operation to be ser"ed is
national andAor inter;regional in scope. *f the route+s,Aarea+s,
to be ser"ed is local or intra;regional in scope, publication in
a ne-spaper of local circulation is sufficient8
d. The applicant shall simultaneousl0 cause the posting of the
aforementioned >rder in conspicuous places of the affected
ports, "essels, granteeBs premises, passenger terminals and
tic.eting offices8
e. The $!R*! shall cause the posting thereof at the $!R*!
Central or Regional >ffices andAor the $!R*! -ebsite8
f. The !pplicant shall submit compliance -ith the 2urisdictional,
7ualification and documentar0 re7uirements in a summar0
proceeding to be conducted in the $!R*! Central or
Regional >ffice -here the application -as filed, -ithin se"en
+%, da0s from date of publicationAposting8
!pplicant -ill be re7uired to ma.e a -ritten 3ormal >ffer of
#"idence and submit the application for resolutionAdecision
g. Upon fa"orable e"aluation of the 2urisdictional, 7ualification
and documentar0 re7uirements prescribed under &ections 5
and %.( hereof, a corresponding Rider for instances falling
under &ections 9.1 and 9.( hereof or a ne- Decision -ith
CPC for instances falling under &ections 9.9 and 9./ hereof
sho-ing the amendments -ill be issued to the applicant8
h. !n applicant -ho does not meet the 2urisidictionalA
7ualificationAdocumentar0 re7uirements shall be issued an
>rder of Denial, or shall in -riting be re7uired to rectif0 noted
deficiencies, or to submit document+s, deemed necessar0.
'.( tandard Processing Time in the 'ssuance of CPC ? The $!R*!
shall issue the CPC -ithin fifteen +1), -or.ing da0s upon acceptance of
the -ritten 3ormal >ffer of #"idence +3>#, and declaration that the
case is submitted for decision and after fa"orable e"aluation of the
2urisdictional, 7ualification and documentar0 re7uirements.
Sect!" #). Development of )outes- 6ones or Areas of Operation - The
$!R*! shall establish, prescribe and foster the de"elopment of routes, :ones or
areas of operations to guide and ad"ise domestic shipo-nersAoperators -here
shipping ser"ices can be pro"ided or are necessar0 in order to promote and spur
economic acti"ities.
3or missionar0 routes, the $!R*! shall prescribe liberali:ed rules and
procedures pertaining to fees and charges, documentar0 re7uirements, and other
incenti"es to protect its in"estment for a reasonable period as determined b0 the
$!R*!.
The $!R*! shall de"elop an integrated sea transport net-or. b0 identif0ing
"iable routes suitable for long haul liner routes, short haul ferr0 routes, R>R> routes,
tramp operations, feeder routes, and hub ports.
17
The $!R*! shall maintain a database of shipBs franchise in"entor0 e4isting
and potential domestic trade routes8 in"entor0 of ships per trade routeAlin.8 and,
capacit0 of each ship both in the regional and national le"el.
RULE V
FOREIGN SHIPS
ENGAGED IN TRADE AND COMMERCE
IN PHILIPPINE TERRITORIAL WATERS
Sect!" #. pecial Permit for 7oreign hips - o foreign ships shall be allo-ed to
transport passengers or cargo bet-een ports or places -ithin the Philippine territorial
-aters, e4cept upon the grant of &pecial Permit b0 the $!R*!, -hen no domestic
ship is a"ailable or suitable to pro"ide the needed shipping ser"ice and public interest
-arrants the same.
Sect!" 2. 'nstances &arranting issuance of P The $!R*! ma0 issue
&pecial Permit under an0 of the follo-ing instances1

(.1 There is no a"ailable Philippine;registered ship to transport the cargo to
meet the shipping re7uirement as determined b0 the $!R*!8 or,
(.( There is no suitable Philippine;registered ship to meet the specific
re7uirements of the shipper or consignee, as determined b0 $!R*!8
or,
(.9 *n instances -hen public interest -arrants, as determined b0 the
$!R*!.
Sect!" $. .alidity of the P ; The &pecial Permit shall be "alid for the duration of
the need as determined b0 the $!R*!.
Sect!" =. Documentary )equirements < The applicant shall submit the follo-ing
pre;appro"al Documentar0 re7uirements1
/.1.1 Pre;!ppro"al Documentar0 Re7uirements1
/.1.1 Letter of !pplication8
/.1.( 3i4ture oteAContract of !ffreightmentATimeAFo0age Charter
!greement indicating the charter hire of the sub2ect ship8
/.1.9 Dul0 notari:ed Resolution of the compan0Bs Board of Directors,
certified b0 the Board &ecretar0, authori:ing the filing of the
application and designating the officialsAauthori:ed
representati"es to represent the applicant;compan0Aregistered
o-ner8
/.1./ Falid Certificate of &hip >riginal Registr0Aationalit0 +for foreign
flag onl0,8
/.1.) Class CertificateALatest &ur"e0 report8
18
/.1.5 Cre- list indicating &TCM certificates +number and Falidit0, of
the cre- re7uired certification8
/.1.% Certified true cop0 of PO*A*nsurance Co"erage, as applicable8
/.1.H &#C Registration +for branch offices of foreign o-nersA
charterersAship representati"e,8
/.1.' >ther related documentsAcontracts that -ould trace the
operationApro2ect in"ol"ing the utili:ation of the ship +if there are
t-o or more other companies in"ol"ed in the pro2ect,8
/.1.10 Proof of pa0ment of processing fee of Php 1(0,000.00
minimumAmonthAship of Php )00.00A)0 ?T or fraction thereof,
-hiche"er is higher.
/.(Post;!ppro"al Documentar0 Re7uirements1
/.(.1 Dul0 notari:edAauthenticated 3i4ture oteAContract of
!ffreightmentATime or Fo0age Charter !greement +notari:ed onl0
if document is e4ecuted in the Philippines,8 and,
/.(.( Proof of pa0ment of ta4 on non;resident foreign
corporationAentit0 not engaged in trade or business in the
Philippines but deri"ing income pursuant to &ection (H;B of R!
H/(/.
RULE VI
SAFETY STANDARDS
Sect!" #. afety tandards < !ll ships shall, at all times, be in sea-orth0
condition as to their hull and machiner0, properl0 outfitted -ith ade7uate na"igational
aids and e7uipment, firefighting, life;sa"ing, communication, and other safet0
appliancesAe7uipment, operated and maintained in accordance -ith prescribed
standards, and manned b0 dul0 licensed and competent ship cre-.
The $!R*! shall set, formulate or re"ise safet0 standards and re7uirements
for ships and to ensure protection of the marine en"ironment. *t shall li.e-ise
implement and enforce such rules and regulations -hich -ill ensure compliance b0
e"er0 domestic shipo-nerAoperator -ith re7uired safet0 standards and other rules
and regulations on ships.
Sect!" 2. Conformance &ith,(aintenance of afety tandards The $!R*!
shall ha"e the po-er to inspect ships and all e7uipment onboard ships to ensure
conformance -ithAmaintenance of safet0 standards.
!nnual and such other re7uired safet0 inspections of all ships shall be
underta.en b0 7ualified and trained ship safet0 inspectors of the $!R*!. !ll
rele"ant ship safet0 certificates re7uired follo-ing such inspections shall be issued b0
the $!R*!.
19
Sect!" $. Obligations of Domestic hipo&ners,operators < !ll domestic
shipo-nersAoperators must compl0, prior to and for the duration of the shipsB
operation, -ith operational and safet0 standards re7uired b0 national la-s andAor
applicable international con"entions, codes, rules and regulations.
Sect!" =. Adoption of hip afety 'nspection ystem "') *n order to
foster a s0stematic, uniform and effecti"e conduct of ship safet0 inspection of all
registered domestic ships, a &hip &afet0 *nspection &0stem +&&*&, and a $anual for
its implementation are hereb0 adopted. The &&*& and its $anual, and their
amendments, shall henceforth ser"e as the guiding frame-or. and reference to be
used b0 the $!R*!Bs inspectors in the conduct of all ship inspections to be
underta.en prior to issuance of the appropriate ship safet0 certificates. The $!R*!
shall super"ise, coordinate and pro"ide guidanceAresolution in the implementation of
the &&*& and the $anual. *t shall also foster a periodic re"ie-Ae"aluation of the &&*&
and the $anual, and introduce amendmentsAimpro"ements thereto.
ection 89 hip afety Certificates )equired !ll ships are re7uired to carr0 on
board the rele"ant or applicable ship safet0 certificates as specified in &ection %.1.%
of Rule *F.
RULE VII
CLASSIFICATION OF SHIPS
IN THE DOMESTIC TRADE
Sect!" #. Classification of *e&ly+Acquired hips - !ll ships, -hether ne-l0
built or pre"iousl0 o-ned, -hich are ac7uired on or after the effecti"it0 of the !ct and
this *RR shall be classed b0 a go"ernment;recogni:edAaccredited classification
societ0 on the date of ac7uisition prior to their operation in the domestic trade. *n the
case of high;speed crafts, the0 shall be classed b0 an *!C&;member classification
societ0.
Sect!" 2. Classification of E2isting hips - #4isting ships ac7uired prior to the
effecti"it0 of the !ct and this *RR, shall continue to be go"erned b0 applicable
classification policiesAre7uirements. *n the case of high;speed crafts, the0 shall be
classed b0 an *!C&;member classification societ0.

Sect!" $. (onitoring- .erification and Audit of Classification ocieties - The
$!R*! shall adopt policies, guidelines, standards and procedures for the
monitoring and assessment of performance of recogni:edAaccredited classification
societies.
RULE VIII
RATES
Sect!" #. )ight to 7i2 )ates *n order to encourage in"estments in the domestic
shipping industr0 b0 e4isting domestic shipo-nersAoperators and attract in"estment
from ne- operators and in"estors, domestic shipo-nersAoperators are hereb0
20
authori:ed to establishAfi4 their o-n domestic shipping rates, passenger or cargo
rates or both, pro"ided, that effecti"e competition is fostered and public interest is
ser"ed.
Sect!" 2. Conditions in 7i2ing )ates < #"er0 domestic shipo-nerAoperator shall
ha"e the right to fi4 its o-n passenger or cargo rates, or both, sub2ect to the
follo-ing1
(.1. Upon the effecti"it0 of this *RR, all shipo-nersAoperators -ith
#ntit0ACompan0 CPC shall submit under oath -ith the $!R*! their
otice for the adoption of initialAsubse7uent up-ard or do-n-ard
ad2ustment of deregulated rates as defined in the !ct and this *RR, in a
prescribed form, -hich shall indicate, among others, the name of
co"ered ship+s,, authori:ed route+s,Alin.+s,, rate+s, per routeAlin. and
the grounds for the ad2ustment8
(.(. !ll shipo-nersAoperators shall cause the publication of their otice
submitted to the $!R*! in an0 of the fi"e +), ma2or ne-spapers of
national circulation, if the route+s,Aarea+s, of operation to be ser"ed is
national andAor inter;regional in scope. *f the route+s,Aarea+s, to be
ser"ed is local or intra;regional in scope, publication in a ne-spaper of
local circulation is sufficient8
(.9. !ll shipo-nersAoperators shall li.e-ise cause the posting of an0
initialAsubse7uent up-ard or do-n-ard ad2ustment of deregulated
rates, including the effecti"it0 thereof, in all conspicuous places at the
affected port+s,, "essel+s,, compan0 premises, passenger terminals and
tic.eting office+s,.
The $!R*! shall cause the posting thereof at the $!R*! Central or
Regional >ffices andAor the $!R*! -ebsite8 and,
(./. The up-ard or do-n-ard ad2usted rate shall ta.e effect se"en +%,
calendar da0s from the publication in accordance -ith &ection (.(
hereof.
Sect!" $. (onitoring Activities *n order to protect and safeguard public
interest, the $!R*! shall perform the follo-ing monitoring acti"ities1

9.1 *nspect boo.s and records of the shipo-nersAoperators8

9.( !ssess the rates charged vis--vis the le"el and 7ualit0 of ser"ice
pro"ided through the implementation of an amended Passenger
&er"ice Rating &0stem +P&R&, and Cargo &er"ice Rating &0stem
+C&R&,8 and,
9.9 !ssess the Kuarterl0 Report and the audited !nnual Report of
>perations and 3inances, together -ith the cop0 of the >fficial Receipt
+>R, of Kuarterl0 and $onthl0 Common CarrierBs Ta4 and other related
ta4 pa0ments to the B*R, -hich are hereto re7uired to be submitted b0
domestic shipo-nersAoperators, fifteen +1), da0s after each 7uarter and
e"er0 Lune 90
th
of the follo-ing 0ear, respecti"el0.
ection :9 'nstances 1arranting (A)'*A;s 'ntervention The $!R*!, through
the !dministrator, shall inter"ene, follo-ing the Rules on &ummar0 Procedure as
21
prescribed in $!R*! $C %/;! and its amendments, in an0 of the follo-ing
circumstances1
/.1$onopol0 of a routeAlin., lac. of effecti"e competition in a routeAlin., and
practices -hich constitute combinations in restraint of trade8 or,
/.(!n0 complaint against the rates charged andAor ser"ices rendered b0 the
shipo-nersAoperators pro"ided sufficient basisA2ustification is submitted8
or,
/.9!n0 ad"erse findingsArecommendations as a result of monitoring acti"ities
underta.en b0 the $!R*! under &ection 9 abo"e8 or,
/./>ther analogous instances.
Upon confirmationAdetermination of an0 of the abo"e circumstances, the
$!R*! shall issue an >rder prescribing the appropriate correcti"e measures to be
underta.en b0 the domestic shipo-nerAoperator, such as but not limited to,
prescribing rates commensurate to the shipBs ser"ice le"el, or routes of operation, or
upgrading the shipBs ser"ice le"el to prescribed standard.
Sect!" 5. <overnment Cargoes - #"er0 domestic shipo-nerAoperator shall ha"e
the obligation to carr0 mail on mutuall0 agreed terms and conditions, and preferential
negotiated conditions shall be gi"en for the carriage of other go"ernment cargo.
RULE II
COMPULSORY INSURANCE COVERAGE
Sect!" #. Compulsory 'nsurance Coverage for Passenger and Cargo To
meet its financial responsibilit0 for an0 liabilit0 that ma0 be incurred for an0 breach of
the contract of carriage, the domestic shipo-nerAoperator shall be re7uired to submit
annuall0 the follo-ing, as applicable1
1.1. !de7uate insurance co"erage for each passenger in the amount not
less than t-o hundred thousand pesos +Php (00,000.00, per
manifested passenger, and the total amount of such co"erage shall be
e7ui"alent to the total authori:ed number of passengers of the ship+s,8
1.(. !de7uate insurance co"erage for cargo, in an amount to be computed
in accordance -ith e4isting la-s, rules and regulations, and the total
amount of such co"erage shall be e7ui"alent to the total cargo capacit0
being offered b0 the "essel8
1.9. *f a domestic shipo-nerAoperator should offer both passenger and
cargo ser"ice, then thetotal insurance co"erage shall be in the total
sum e7ui"alent to that stipulated in paragraphs +1.1, and +1.(, of this
&ection8 and
Provided, That if a domestic shipo-nerAoperator should operate more than
one +1, ship, the amount of insurance co"erage re7uired under this section for
purposes of pro"ing financial capacit0, shall be the amount e7ui"alent to the total
22
authori:ed number of passengers, or total cargo capacit0, or both, of the largest
operating ship -hich the domestic shipo-nerAoperator ma0 ha"e, Provided, further,
That the total insurance co"erage -hich ma0 be re7uired of an0 domestic
shipo-nerAoperator shall not e4ceed the "alue of such ship1 Provided, finally, That
ade7uate insurance co"erage shall be obtained from an0 dul0 licensed insurance
compan0 b0 the >ffice of the *nsurance Commission +>*C, or international protection
and indemnit0 association.
Sect!" 2. Other 'nsurance Coverage - The $!R*! ma0 re7uire e"er0 domestic
shipo-nerAoperator to obtain other insurance co"er from dul0 licensed insurance
companiesAProtection and *ndemnit0 Clubs or their e7ui"alent against damage to, or
degradation of, the marine en"ironment, port facilities, coastal areas or depri"ation of
the li"elihood of marginal fishing and other tourism amenities.
RULE I
FEES
ection =9 Po&er to 7i2- Collect and )eceive 7ees ? The $!R*! shall impose,
fi4, collect and recei"e, in accordance -ith the schedules appro"ed b0 its Board,
such fees necessar0 for rendering the ser"ices in the licensing, super"ision,
regulation, inspection, appro"al and accreditation of domestic shipo-nersAoperators
and the promotion and de"elopment of the countr0Bs maritime industr0.
Unless other-ise re"ised or amended, the fees prescribed under $!R*! $C
o. 1H9 and other rele"ant $Cs for licenses, permits, or applications issued under
this *RR shall continue to appl0. The fees and charges prescribed under this *RR
shall be sub2ect to re"ie- and re"ision b0 the $!R*!.
RULE II
MARINA TRUST FUND
Sect!" #. E:t.C/:H6e"t !> tHe (A)'*A Trust 7und - Pursuant to &ection 1%,
Chapter F**, $!R*! shall establish a Trust 3und.
Sect!" 2. ources of 7unds - The 3und shall consist of fees collected from the
licensing, super"ision, regulation, inspection, appro"al and accreditation of domestic
ship operators, and such other collections resulting from the promotion and
de"elopment of the countr0Bs maritime industr0, and such other collections that ma0
subse7uentl0 be prescribed b0 the $!R*! Board for the rendition of ser"ice in
pursuance of the purposes of the !ct.
Sect!" $. Collection and Deposit - o pa0ment shall be recei"ed b0 $!R*!
-ithout the issuance of an >fficial Receipt in ac.no-ledgement thereof.
The collection of fees and charges and such other funding sources for the
3und shall be separatel0 recorded and directl0 deposited in the $!R*! Trust 3und
23
!ccount in an authori:ed go"ernment depositor0 ban.. The interest income therefrom
shall also accrue and be directl0 credited to the $!R*! Trust 3und !ccount.
Sect!" =. >tili?ation of 7unds - The 3und shall be used to co"er operating
e4penses for plans, programs, pro2ects and acti"ities of the $!R*! relati"e to the
implementationAperformance of its functions of licensing, super"ision, regulation,
inspection, appro"al and accreditation of domestic ship operators and promotion and
de"elopment of the countr0Bs maritime industr0.
Sect!" 5. Disbursement of 7unds - The income deri"ed from the collection of
fees and charges and such other funding sources as prescribed or to be prescribed
b0 the $!R*! Board pursuant to the !ct shall be made a"ailable for the operational
e4penses of the acti"ities for -hich the 3und -as set up. &uch 3und shall be
considered self;perpetuating and self;li7uidating and all e4penditures incurred b0
"irtue of the specific purposes of the !ct shall be charged against the 3und in
accordance -ith e4isting accounting and auditing rules and regulations.

*ncrements of, or the -hole amount of the 3und shall be made a"ailable to the
$!R*! to finance such ser"icesAacti"ities that are underta.en pursuant to the !ct
and this Rules.
To ensure unimpeded rendition of ser"ices to the public, a"ailment of the 3und
shall be made onl0 in such authori:ed go"ernment depositor0 ban. and shall not
re7uire an0 prior clearance or appro"al from an0 other go"ernment agenc0.
Sect!" *. Creation of (A)'*A Trust 7und (anagement Committee "(T7(C#
< Pursuant to the po-er of $!R*! to establish and manage a Trust 3und, a Trust
3und $anagement Committee is hereb0 constituted. The $T3$C shall be
composed of the $!R*! !dministrator, Deput0 !dministrator for Planning, Deput0
!dministrator for >perations, !3> Director, PP> Director, $L!> Director, and one
+1, representati"e each from the Philippine *nterisland &hipping !ssociation +P*&!,,
Philippine &hippers Bureau +P&B, and the Resident C>! !uditor. The Committee
shall be responsible for the management and administration of the $!R*! Trust
3und. Mithin thirt0 +90, da0s from effecti"it0 of this Rules, the $T3$C shall issue
guidelines on the disbursement and utili:ation of the 3und.
Sect!" (. 7inancial Audit ! financial audit shall be regularl0 conducted b0 the
$!R*! *nternal !udit &er"ice Unit +$*!&U, to re"ie-, e4amine, conduct
assessmentAappraisal of financial and accounting matters of the 3und.
Sect!" G. Annual )eport The $!R*! shall submit an annual report on the
operations, fund usage and implementation of the pro"isions of the !ct to the
concerned go"ernment agencies.

The !nnual Report shall contain, among others, the follo-ing1 a, Total income
credited to the 3und8 b, Total utili:ationAdisbursements from the 3und8 and c, The
0earend balance of the 3und.
RULE III
PROHIBITED ACTS
AND PRACTICES
24
Sect!" #. Prohibited Acts and Practices of Domestic hipo&ners,Operators.
< The $!R*! shall ha"e the po-er to impose such fines and penalties against
e"er0 domestic shipo-nerAoperator -ho shall1
1.1>perate -ithout a "alid certificate of public con"enience, accreditation or
other form of authorit0 re7uired b0 the !ct and this *RR8
1.(Refuse to accept or carr0 an0 passenger or cargo -ithout 2ust cause,
e4cept for tramp operations8
1.93ail to maintain its "essels in safe and ser"iceable condition, or "iolate
safet0 rules and regulations8
1./3ail to obtain or maintain ade7uate insurance co"erage8
1.)3ail to meet or maintain safe manning re7uirements8
1.53ail to submit the re7uired Kuarterl0 Report and an audited !nnual Report
of >perations and 3inances, attaching the cop0 of the >fficial Receipt
+>R, of Kuarterl0 and $onthl0 Common Carriers Ta4 Pa0ments to the
Bureau of *nternal Re"enue8
1.%&uch other acts -hich the $!R*! shall determine, after due notice and
hearing, to be detrimental or pre2udicial to the safet0, stabilit0 and
integrit0 of domestic shipping8
1.H!ll prohibited acts defined under e4isting $!R*! Circulars that are not
inconsistent -ith this *RR shall remain in full force and effect.

RULE IIII
FINES AND PENALTIES
Sect!" #. 7ines and Penalties. < The $!R*!, upon notice and hearing and
determination of the e4istence of an0 breach or "iolation of the pro"isions of the !ct
or an0 rules and regulations issued pursuant thereto, shall ha"e the po-er and
authorit0 to1
1.1 &uspend or re"o.e an0 certificate or public con"enience, license,
permit, accreditation, or other form of authorit0 issued to an0 domestic
shipo-nerAoperator -ho shall "iolate an0 pro"ision of the !ct or an0
rules and regulations issued pursuant thereto, or an0 condition imposed
on such certificate of public con"enience, license, permit or
accreditation8
1.1 *mpose a fine on a domestic shipo-nerAoperator -ho shall operate
-ithout a "alid certificate of public con"enience, license, permit,
accreditation, or other form of authorit08
1.( *mpose a fine on a domestic shipo-nerAoperator in an amount to be
determined b0 the $!R*! for refusing to accept, or to carr0
passengers or cargo, -ithout 2ust cause, or for engaging in an0
25
pre2udicial, discriminator0 or disad"antageous act to-ards an0 class of
passengers or shippers8
1.9 *mpose a fine on an0 domestic shipo-nerAoperator in an amount to be
determined b0 the $!R*!, or suspend or re"o.e the certificate of
public con"enience of such domestic shipo-nerAoperator, or both, -ho
shall fail to meet the standards of such safet0 or -ho refuses to compl0
-ith or "iolates safet0 regulations imposed b0 the $!R*! or fails to
maintain its "essels in safe and ser"iceable condition8
1./ *mpose a fine on an0 domestic shipo-nerAoperator in an amount to be
determined b0 the $!R*!, or impose such other penalt0, including the
re"ocation of an0 certificate or license, -ho fails to procure or rene-
re7uired insurance policies8
1.) *mpose a fine on an0 domestic shipo-nerAoperator in an amount to be
determined b0 the $!R*!, or impose such other penalt0, including the
re"ocation of an0 certificate or license -ho fails to meet or maintain
safe manning re7uirements8
1.5 Re"o.e, cancel, suspend, Certificate of Public Con"enience, license, or
other-ise refuse or den0 action on application for a"ailment of F!T
e4emption or other pri"ileges for failure to submit the re7uired !udited
Kuarterl0A!nnual Report of >perations and 3inances in the case of
corporation andAor partnership and to submit proof of Kuarterl0A!nnual
Ta4 Pa0ments to the B*R8 and,
1.% *mpose such other fines and penalties the $!R*! ma0 deem
necessar0 and appropriate in order to enforce the pro"isions of the !ct.
Unless other-ise amended or re"ised, the fines and penalties prescribed
under $!R*! $C 1(0 and other rele"ant $Cs shall appl0.
RULE IIV
INVESTIGATION, HEARING AND AD+UDICATION
Sect!" 1. Po&er to 'nvestigate < The $!R*! has the po-er to in"estigate motu
proprio or upon an0 complaint made in -riting against an0 domestic
shipo-nerAoperator, or an0 shipper or group of shippers, or an0 shipbuilder andAor
ship repairer, or such other entities regarding an0 matter in"ol"ing "iolations of the
pro"isions of the !ct or this *RR and an0 of the rules and regulations issued b0 the
$!R*!.
&ection (. Po&er to Hear and Adjudicate < The $!R*! has the po-er to hear and
ad2udicate an0 complaint made in -riting in"ol"ing an0 "iolation of the !ct or this *RR
and an0 of the rules and regulations issued b0 the $!R*!.
&ection 9. )ules of Procedure < The $!R*! shall not be bound b0 the technical
rules of procedure and e"idence but shall proceed to hear and decide all cases,
disputes or contro"ersies in a most e4peditious manner, emplo0ing all reasonable
means to ascertain the facts of e"er0 case in accordance -ith 2ustice and e7uit0 and
the merits of the case. The Rules on &ummar0 Procedure and other applicable
26
pro"isions prescribed under $!R*! $C %/;! shall continue to be obser"ed until
other-ise amended or re"ised accordingl0.
Sect!" =. P!Ee8 t! I::0e S066!": < The $!R*! shall ha"e the po-er to
summon -itnesses, administer oaths, ta.e testimon0, re7uire the submission of
reports, compel the production of boo.s and documents, and issue subpoena ad
testificandum et subpoena duces tecum, and enforce its orders, -rits or processes
through its deputi:ed officers.
Sect!" 5. )endition of Decision < The case is deemed submitted for resolution
upon termination of the period for reception of e"idence and formal submission
thereof. The case shall be decided b0 the concerned Central >ffice +C>,A$aritime
Regional >ffice +$R>, -ithin thirt0 +90, calendar da0s from submission as pro"ided
herein. !ll decisions determining the merits of cases shall be in -riting, stating clearl0
and distinctl0 the facts and la- on -hich the0 are based and signed b0 the C>A$R>
DirectorA>fficer;*n;Charge +>*C,.
Decisions and final orders shall be ser"ed b0 mail, personal ser"ice or
publication as the case ma0 re7uire.
RULE IV
APPEALS
Sect!" #. Appeal on Decisions 'nvolving the CPC < !n0 order, ruling, decision or
resolution of the C>A$R> DirectorA>*C relating to the application for issuance of
#ntit0ACompan0 CPC shall become final and e4ecutor0 fifteen +1), da0s unless a
$otion for Reconsideration is filed -ithin the same period -ith the C>A$R>
DirectorA>*C concerned after the receipt of a cop0 thereof b0 the part0 affected. The
decision of the C>A$R> DirectorA>*C shall be final and e4ecutor0 unless -ithin the
same period an appeal to the $!R*! !dministrator has been perfected.
The order, ruling decision or resolution of the $!R*! !dministrator shall be
final and e4ecutor0 -ithin fifteen +1), da0s unless an administrati"e appeal is filed
-ith the $!R*! Board or petition for 2udicial re"ie- is filed -ith the Court of !ppeals
or &upreme Court in accordance -ith the pro"isions of the Re"ised Rules of Court.
Sect!" 2. Appeal on Other Decisions 1 !n0 and all orders, rulings, decisions or
resolutions of the C>A$R> DirectorA>*C other than those relating to the application
for issuance of #ntit0ACompan0 CPC shall become final and e4ecutor0 fifteen +1),
da0s after the receipt of a cop0 thereof, unless a $otion for Reconsideration is filed
-ithin the same period -ith the C>A$R> DirectorA>*C concerned after the receipt of
a cop0 thereof b0 the part0 affected. The decision of the C>A$R> DirectorA>*C shall
be final and e4ecutor0 unless -ithin the same period an appeal to the $!R*!
!dministrator has been perfected.
The order, ruling decision or resolution of the $!R*! !dministrator shall be
final and e4ecutor0 -ithin fifteen +1), da0s unless an administrati"e appeal is filed
-ith the $!R*! Board.

Sect!" $. Perfection of Appeal < !ppeal ma0 be perfected b0 filing a otice of
!ppeal -ith the $!R*! !dministrator and the concerned C>A$R> DirectorA>*C and
a cop0 thereof ser"ed upon the ad"erse part0 fifteen +1), da0s from receipt of the
27
order, ruling, decision and upon pa0ment of the corresponding doc.et fee of
Php1,000.00.
RULE IVI
INVESTMENT INCENTIVES
FOR SHIPBUILDING AND SHIP REPAIR
Sect!" #. 'nvestment 'ncentives < To encourage in"estments and to ensure the
de"elopment of a "iable shipbuilding and ship repair industr0, the follo-ing incenti"es
shall be granted1
1.1 .alue+Added Ta2 ".AT# E2emption - !ll $!R*!;registered
shipbuilders andAor ship repairers shall be e4empt from pa0ment of
"alue added ta4 for the importation of capital e7uipment, machiner0,
spare parts, life;sa"ing, na"igational e7uipment, steel plates, and other
metal plates including marine;grade aluminum used and installed in the
construction, repair, reno"ation, or alteration of an0 merchant marine
ships operated or to be operated in the domestic trade.
1.( *et Operating 3oss Carry Over - The net operating loss in an0
ta4able 0ear immediatel0 preceding the current ta4able 0ear, -hich had
not been pre"iousl0 offset as a deduction from gross income shall be
carried o"er as a deduction from gross income for the ne4t three +9,
consecuti"e ta4able 0ears immediatel0 follo-ing the 0ear of such loss,
sub2ect to the pertinent pro"isions of the ational *nternal Re"enue
Code of 1''%, as amended.
The $!R*!;registered shipbuilder andAor ship repairer a"ailing of this
incenti"e shall furnish the $!R*! in -riting on or before the end of
$a0 of each 0ear and e"er0 0ear thereafter a cop0 of the !udited
!nnual >perating +3inancial, Report stamped recei"ed b0 the B*R.
1.9 Accelerated Depreciation 3i4ed assets ma0 be depreciated as
follo-s1
1.9.1. To the e4tent of not more than t-ice as fast as the normal rate of
depreciation or depreciated at normal rate of depreciation if the
e4pected life is ten +10, 0ears or less8 or
1.9.(. Depreciation o"er an0 number of 0ears bet-een fi"e +), 0ears
and the e4pected life if the latter is more than ten +10, 0ears, and
the depreciation thereon allo-ed as deduction from ta4able
income.
The $!R*!;registered shipbuilder andAor ship repairer a"ailing of this
incenti"e can depreciate their fi4ed assets in t-o +(, methods, abo"e;
cited, -ho shall notif0 the B*R at the beginning of the depreciation
period -hich depreciation method -ill be used. Cop0 of such notice to
the B*R shall be submitted to the $!R*!.
Sect!" 2. 1ho may qualify < >nl0 $!R*!;registered shipbuilders andAor ship
repairers, :H7;.82: ma0 a"ail of the incenti"es under the !ct and this *RR.
28
Sect!" $. Conditions for the Availment of .AT+E2emption ; The importation of
articles co"ered under &ection 1 hereof, shall be granted e4emption from F!T sub2ect
to the follo-ing conditions1
9.1. &aid articles are not manufactured domesticall0 in sufficient 7uantit0, of
comparable 7ualit0 and at reasonable prices8
9.(. &aid articles are directl0 imported b0 a $!R*!;registered shipbuilder
and ship repairer8
9.9. &aid articles are reasonabl0;needed and -ill be used e4clusi"el0 b0 the
registered shipbuilder and ship repairer8
9./. The appro"al of $!R*! -as obtained prior to the importation of said
articles8
9.). The applicantAimporter shall compl0 -ith rele"ant rules and regulations
of the Bureau of Customs8 and,
9.5. The shipbuilders and ship repairers ma0 a"ail of the e4emption from
"alue;added ta4 pro"ided herein -ithin a period of ten +10, 0ears from
the appro"al of the !ct.
Sect!" =. 3imitations,)estrictions on ale- Transfer or Disposition of
'mported Articles < !n0 sale, transfer or disposition of articles under &ection 1
hereof, shall be sub2ect to the follo-ing limitationsArestrictions1
/.1!n0 sale, transfer or disposition of articles under &ection 1'+a, of the !ct
-ithin ten +10, 0ears from its effecti"it0 to another $!R*!;registered
shipbuilder or repairer en2o0ing similar incenti"e shall re7uire prior
appro"al of $!R*!8
/.(!n0 sale, transfer or disposition made to non;e4empt entit0 or to a part0
other than a $!R*!;registered shipbuilder or ship repairer, -ithin ten
+10, 0ears from the effecti"it0 of the !ct, both the "endor and the
transferee or assignee shall be solidaril0 liable to pa0 t-ice the amount
of F!T -ai"ed8
/.9!n0 sale, transfer or disposition made after ten +10, 0ears from the
effecti"it0 of the !ct shall be made b0 informing $!R*! in -riting.
Purchasers, transferees or recipients shall be considered the importers
thereof, -ho shall be liable for an0 internal re"enue ta4 on such
importation. Ta4 due on such importation shall constitute a lien on the
goods superior to all charges or liens on the goods, irrespecti"e of the
possessor thereof.
/./3ailure to secure an !uthorit0 to &ell, Transfer or Dispose from $!R*!
prior to sale, transfer or disposition, both the "endor and the transferee
or assignee shall be liable to pa0 t-ice the amount of F!T e4emption
gi"en him.
Sect!" 5. Application for Authority to 'mport or ell- Transfer or Dispose
'mported Articles 5
29
).1 !ll applications for !uthorit0 to *mport shall be filed under oath -ith the
$!R*! together -ith the submission of a &-orn Certification that the
conditions under 9.1 to 9.9 hereof are present and the follo-ing
documents1
).1.1 Letter of !pplication8
).1.( Pro;forma in"oice8
).1.9 Dul0 notari:ed $emorandum of agreement +$>!,ADeed of &ale
+D>&, or Bill of &ale +B>&,8
).1./ Dul0 notari:ed resolution of the compan0Bs Board of Directors,
certified b0 the Board &ecretar0, authori:ing the filing of
application and authori:ing the signator0 to the $>!AD>& or
B>& to act for and in behalf of the "endorAseller8
).1.) 3or capital e7uipment such as floating doc.s or ser"ice boats, in
addition to the foregoing documents, the follo-ing shall li.e-ise
be submitted1
a, certificate of registr0 or nationalit0 or builderBs
certificateAbuilding contract8 and,
b, latest sur"e0 report or class certificate.
).1.5 Proof of pa0ment of processing fee in the amount e7ui"alent to
16 of the 3>B "alue in the Pro;forma *n"oice or Php10,000.00,
-hiche"er is lo-er.
The !uthorit0 to import shall be "alid for a period of ninet0 +'0, da0s from the
opening of the Letter of Credit or submission of proof of pa0ment of ac7uired articles.
).(!ll applications to sell, transfer or dispose of articles imported under /.1
abo"e shall be filed under oath -ith the $!R*! together -ith the
submission of the follo-ing documents1
).(.1 Letter of !pplication8
).(.( Dul0 notari:ed $emorandum of !greement +$>!,ADeed of &ale
+D>&, or Bill of &ale +B>&,8
).(.9 Dul0 notari:ed resolution of the compan0Bs Board of Directors,
certified b0 the Board &ecretar0, authori:ing the filing of
application and authori:ing the signator0 to the $>!AD>& or
B>& to act for and in behalf of the "endorAseller, if applicable
and,
).(./ Proof of pa0ment of processing fee in the amount of
Php),000.00.
Sect!" *. Application for Availment of the .AT E2emption !ll applications for
F!T #4emption on $!R*!;appro"ed importation and sale, transfer or disposition of
imported articles shall be filed under oath -ith the $!R*!, and shall be issued a
Kualification Certificate attesting that the applicant possesses the 7ualifications for
30
a"ailment of F!T #4emption, upon compliance -ith the follo-ing documentar0
re7uirements1

5.1Dul0 accomplished $!R*!;prescribed !pplication 3orm for a"ailment of
F!T;#4emption8 and,
5.(Proof of pa0ment of processing fee in the amount of Php900.00.
ection @9 )eportorial )equirement ? !ll $!R*!;registered shipbuilders andAor
shiprepairers -ho a"ailed of the F!T;#4emption shall compl0 -ith the follo-ing1
%.9&ubmission of a Kuarterl0 Report on the utili:ation, sale, transfer or
disposition of articles imported or sold, transferred or disposed under
the !ct and this *RR on or before the 1)
th
of the month after the end of
each 7uarter.
%./&ubmission on or before 1)
th
of Lanuar0 each 0ear a &ummari:ed Report
on the utili:ation, sale, transfer or disposition of articles imported or
sold, transferred or disposed under the !ct and this *RR.
RULE IVII
RESTRICTIONS ON VESSEL IMPORTATION
Sect!" #. Annual Evaluation of Progressive hipbuilding Capability ; The
$!R*! shall underta.e an annual e"aluation of the progressi"e capabilities of all
$!R*!;registered ship0ards to build large classed "essels for the domestic trade in
7uantities sufficient to meet the demand of domestic shipo-nersAoperators and shall
correspondingl0 ad2ust the si:e of "essels, -hich ma0 be sourced from $!R*!;
registered ship0ards.
Sect!" 2. hipbuilding Capability Assessment < Ten +10, 0ears from the
effecti"e date of the !ct and e"er0 0ear thereafter, the $!R*! shall e"aluate and
determine the progressi"e capabilit0 of $!R*!;registered ship0ards to build and
construct ne- "essels for the domestic trade. B0 (01/, the $!R*! shall determine
the capabilit0 of $!R*!;registered ship0ards to build ne- "essels belo- )00 ?RT.
Sect!" $9 )estrictions on .essel 'mportation < *f, upon e"aluation, the
capabilit0 of $!R*!;registered ship0ards to build classed "essels belo- )00 ?RT
in 7uantities sufficient to meet domestic demand is pro"en, then all domestic ship
operators shall be discouraged from importing ne- or pre"iousl0 o-ned "essels that
are less than )00 ?RT for the domestic trade and "essels built in $!R*!;registered
ship0ards shall be gi"en priorit0 for entr0 in the Philippine Registr0 and allo-ed to
operate in the domestic trade.
RULE IVIII
TRANSITORY PROVISIONS
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Sect!" #. Period of Transition < Mithin &i4 +5, months upon the effecti"it0 of this
*RR, e4isting liner and tramp operators shall be re7uired to file appropriate
application for issuance of CPC under the !ct and this *RR.
Sect!" 2. 'ssuance of hip afety Certificates and other hip Documents
The $!R*! shall commence issuance of &hip &afet0 Certificates, as specified in
&ection %.1.% of Rule *F hereof, -ithin si4 +5, months from the effecti"it0 of this *RR.
*n the meantime, the Philippine Coast ?uard +PC?,, in the discharge of the $!R*!
deputi:ed functions pursuant to #4ecuti"e >rder 1()A1();! shall continue to issue
ship safet0 certificates and other ship documents enumerated under &ection F of
$!R*! $C 19'. The ship safet0 documents issued b0 the PC? prior to and during
the transition period shall continue to be "alid until their e4piration.

Sect!" $. )etirement of Old hips *mmediatel0 upon the effecti"it0 of the !ct,
the $!R*! shall prepare and implement a $andator0 &hip Retirement Program for
all unclassed ships that fail to meet the classification standards of a go"ernment;
recogni:edAaccredited classification societ0.
!ll ships -hich ha"e attained the ma4imum ship age stipulated b0 $!R*!Bs
$andator0 &hip Retirement Program and -hich do not carr0 a class certificate issued
b0 a go"ernment;recogni:edAaccredited classification societ0 shall not be allo-ed to
operate in the domestic trade and shall be automaticall0 de;listed from the Philippine
Registr0 of &hips.
RULE III
FINAL PROVISIONS
Sect!" #. Temporary TaAe+Over of Operations *n times of national
emergenc0, -hen the public interest so re7uires, the &tate ma0, during emergencies
and under reasonable terms prescribed b0 it, temporaril0 ta.e o"er or direct the
operations or an0 "essel engaged in domestic trade and commerce, or prescribe its
rates or routes of operation. *mmediatel0 upon the cessation of the emergenc0, the
&tate shall immediatel0 reinstate to the domestic shipo-nerAoperator the operation of
the ship under the same terms and conditions e4isting prior to the occurrence of the
emergenc0.
Sect!" 2. (andatory )evie&9 The $!R*! shall underta.e a mandator0 re"ie-
of this *RR at least once e"er0 t-o +(, 0ears and as often as it ma0 deem necessar0,
-ith the primar0 ob2ecti"e of promoting and de"eloping the countr0Bs maritime
industr0.
Sect!" 2. eparability Clause *f, for an0 reason, an0 section, subsection,
sentence, clause or term of the !ct and this *RR is held to be illegal, in"alid or
unconstitutional, such parts not affected b0 such declaration shall remain in full force
and effect.
Sect!" $. )epealing Clause The pro"isions of Common-ealth !ct o. 1/5,
insofar as the same applies to the operation, management, control and regulation of
"essels, steamboats, steamship lines, ferries, -ater crafts and the li.e, as -ell as the
pro"isions of Presidential Decree o. /%/, #4ecuti"e >rder os. 1() and 1();!, and
such other la-s, presidential decrees, e4ecuti"e orders, issuances, rules and
regulations or parts thereof, -hich are inconsistent -ith the pro"isions of the !ct and
this *RR are hereb0 repealed, amended or modified accordingl0.
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Sect!" =. Effectivity This Rules and Regulations shall ta.e effect immediatel0
upon its publication once in a ne-spaper of general circulation.
$anila, Philippines, 90 o"ember (00/.

SECRETARYJS CERTIFICATE
This is to certif0 that the *mplementing Rules and Regulations of Republic !ct
o. '(') -as appro"ed during the &pecial Board $eeting of the $aritime *ndustr0
Board held on 90 o"ember (00/.
Date of Publication
11 December (00/
Publisher =The $anila Times e-spaper@
Date of &ubmission to the UP La- Center
19 December (00/
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