Transportation Laws

Code of Commerce - Commercial Contracts for Transportation(Articles 349 to 379)

TITLE VII – COMMERCIAL CONTRACTS FOR TRANS-PORTATION

ARTICLE 349. A contract of transportation by land or water ways of any kind shall be considered commercial:

1. When it has for its object merchandise or any article of com-merce.

2. When, whatever its object may be, the carrier is a merchant or is habitually engaged in transportation for the public.

ARTICLE 350. The shipper as well as the carrier of merchandise or goods may mutually demand that a bill of lading be made, stating:

1. The name, surname and residence of the shipper.2. The name, surname and residence of the carrier.3. The name, surname and residence of the person to whom or to

whose order the goods are to be sent or whether they are to be deliv-ered to the bearer of said bill.

4. The description of the goods, with a statement of their kind, of their weight, and of the external marks or signs of the packages in which they are contained.

5. The cost of transportation.6. The date on which shipment is made.7. The place of delivery to the carrier.8. The place and the time at which delivery to the consignee shall

be made.9. The indemnity to be paid by the carrier in case of delay, if

there should be any agreement on this matter.

P a g e 1 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

ARTICLE 351. In transportation made by railroads or other en-terprises subject to regulation rate and time schedules, it shall be suf-ficient for the bills of lading or the declaration of shipment furnished by the shipper to refer, with respect to the cost, time and special con-ditions of the carriage, to the schedules and regulations the applica-tion of which he requests; and if the shipper does not determine the schedule, the carrier must apply the rate of those which appear to be the lowest, with the conditions inherent thereto, always including a statement or reference to in the bill of lading which he delivers to the shipper.

ARTICLE 352. The bills of lading, or tickets in cases of trans-portation of passengers, may be diverse, some for persons and others for baggage; but all of them shall bear the name of the carrier, the date of shipment, the points of departure and arrival, the cost, and, with respect to the baggage, the number and weight of the packages, with such other manifestations which may be considered necessary for their easy identification.

ARTICLE 353. The legal evidence of the contract between the shipper and the carrier shall be the bills of lading, by the contents of which the disputes which may arise regarding their execution and performance shall be decided, no exceptions being admissible other than those of falsity and material error in the drafting.

After the contract has been complied with, the bill of lading which the carrier has issued shall be returned to him, and by virtue of the exchange of this title with the thing transported, the respective obligations and actions shall be considered cancelled, unless in the same act the claim which the parties may wish to reserve be reduced to writing, with the exception of that provided for in Article 366.


In case the consignee, upon receiving the goods, cannot return the bill of lading subscribed by the carrier, because of its loss or of any other cause, he must give the latter a receipt for the goods deliv-ered, this receipt producing the same effects as the return of the bill of lading.

ARTICLE 354. In the absence of a bill of lading, disputes shall be determined by the legal proofs which the parties may present in support of their respective claims, according to the general provi-sions established in this Code for commercial contracts.

ARTICLE 355. The responsibility of the carrier shall commence from the moment he receives the merchandise, personally or through a person charged for the purpose, at the place indicated for receiving them.

ARTICLE 356. Carriers may refuse packages which appear unfit for transportation; and if the carriage is to be made by railway, and the shipment is insisted upon, the company shall transport them, be-ing exempt from all responsibility if its objections, is made to appear in the bill of lading.

ARTICLE 357. If by reason of well-founded suspicion of falsity in the declaration as to the contents of a package the carrier should decide to examine it, he shall proceed with his investigation in the presence of witnesses, with the shipper or consignee in attendance.

If the shipper or consignee who has to be cited does not attend, the examination shall be made before a notary, who shall prepare a


memorandum of the result of the investigation, for such purpose as may be proper.

If the declaration of the shipper should be true, the expense occa-sioned by the examination and that of carefully repacking the pack-ages shall be for the account of the carrier and in a contrary case for the account of the shipper.

ARTICLE 358. If there is no period fixed for the delivery of the goods the carrier shall be bound to forward them in the first shipment of the same or similar goods which he may make point where he must deliver them; and should he not do so, the damages caused by the delay should be for his account.

ARTICLE 359. If there is an agreement between the shipper and the carrier as to the road over which the conveyance is to be made, the carrier may not change the route, unless it be by reason of force majeure; and should he do so without this cause, he shall be liable for all the losses which the goods he transports may suffer from any other cause, beside paying the sum which may have been stipulated for such case.

When on account of said cause of force majeure, the carrier had to take another route which produced an increase in transportation charges, he shall be reimbursed for such increase upon formal proof thereof.

ARTICLE 360. The shipper, without changing the place where the delivery is to be made, may change the consignment of the goods which he delivered to the carrier, provided that at the time of order-ing the change of consignee the bill of lading signed by the carrier, if


one has been issued, be returned to him, in exchange for another wherein the novation of the contract appears.

The expenses which this change of consignment occasions shall be for the account of the shipper.

ARTICLE 361. The merchandise shall be transported at the risk and venture of the shipper, if the contrary has not been expressly stipulated. As a consequence, all the losses and deterioration which the goods may suffer during the transportation by reason of fortu-itous event, force majeure, or the inherent nature and defect of the goods, shall be for the account and risk of the shipper. Proof of these accidents is incumbent upon the carrier.

ARTICLE 362. Nevertheless, the carrier shall be liable for the losses and damages resulting from the causes mentioned in the pre-ceding article if it is proved, as against him, that they arose through his negligence or by reason of his having failed to take the precau-tions which usage has established among careful persons, unless the shipper has committed fraud in the bill of lading, representing the goods to be of a kind or quality different from what they really were.

If, notwithstanding the precautions referred to in this article, the goods transported run the risk of being lost, on account of their na-ture or by reason of unavoidable accident, there being no time for their owners to dispose of them, the carrier may proceed to sell them, placing them for this purpose at the disposal of the judicial authority or of the officials designated by special provisions.

ARTICLE 363. Outside of the cases mentioned in the second paragraph of Article 361, the carrier shall be obliged to deliver the


goods shipped in the same condition in which, according to the bill of lading, they were found at the time they were received, without any damage or impairment, and failing to do so, to pay the value which those not delivered may have at the point and at the time at which their delivery should have been made.

If those not delivered form part of the goods transported, the con-signee may refuse to receive the latter, when he proves that he can-not make use of them independently of the others.

ARTICLE 364. If the effect of the damage referred to in Article 361 is merely a diminution in the value of the goods, the obligation of the carrier shall be reduced to the payment of the amount which, in the judgment of experts, constitutes such difference in value.

ARTICLE 365. If, in consequence of the damage, the goods are rendered useless for sale and consumption for the purposes for which they are properly destined, the consignee shall not be bound to re-ceive them, and he may have them in the hands of the carrier, de-manding of the latter their value at the current price on that day.

If among the damaged goods there should be some pieces in good condition and without any defect, the foregoing provision shall be applicable with respect to those damaged and the consignee shall receive those which are sound, this segregation to be made by dis-tinct and separate pieces and without dividing a single object, unless the consignee proves the impossibility of conveniently making use of them in this form.

The same rule shall be applied to merchandise in bales or pack-ages, separating those parcels which appear sound.


ARTICLE 366. Within the twenty-four hours following the re-ceipt of the merchandise, the claim against the carrier for damage or average be found therein upon opening the packages, may be made, provided that the indications of the damage or average which gives rise to the claim cannot be ascertained from the outside part of such packages, in which case the claim shall be admitted only at the time of receipt.

After the periods mentioned have elapsed, or the transportation charges have been paid, no claim shall be admitted against the carrier with regard to the condition in which the goods transported were de-livered.

ARTICLE 367. If doubts and disputes should arise between the consignee and the carrier with respect to the condition of the goods transported at the time their delivery to the former is made, the goods shall be examined by experts appointed by the parties, and, in case of disagreement, by a third one appointed by the judicial authority, the results to be reduced to writing; and if the interested parties should not agree with the expert opinion and they do not settle their differ-ences, the merchandise shall be deposited in a safe warehouse by or-der of the judicial authority, and they shall exercise their rights in the manner that may be proper.

ARTICLE 368. The carrier must deliver to the consignee, with-out any delay or obstruction, the goods which he may have received, by the mere fact of being named in the bill of lading to receive them; and if he does not do so, he shall be liable for the damages which may be caused thereby.


ARTICLE 369. If the consignee cannot be found at the residence indicated in the bill of lading, or if he refuses to pay the transporta-tion charges and expenses, or if he refuses to receive the goods, the municipal judge, where there is none of the first instance, shall pro-vide for their deposit at the disposal of the shipper, this deposit pro-ducing all the effects of delivery without prejudice to third parties with a better right.

ARTICLE 370. If a period has been fixed for the delivery of the goods, it must be made within such time, and, for failure to do so, the carrier shall pay the indemnity stipulated in the bill of lading, neither the shipper nor the consignee being entitled to anything else.If no indemnity has been stipulated and the delay exceeds the time fixed in the bill of lading, the carrier shall be liable for the damages which the delay may have caused.

ARTICLE 371. In case of delay through the fault of the carrier, referred to in the preceding articles, the consignee may leave the goods transported in the hands of the former, advising him thereof in writing before their arrival at the point of destination.

When this abandonment takes place, the carrier shall pay the full value of the goods as if they had been lost or mislaid.

If the abandonment is not made, the indemnification for losses and damages by reason of the delay cannot exceed the current price which the goods transported would have had on the day and at the place in which they should have been delivered; this same rule is to be observed in all other cases in which this indemnity may be due.


ARTICLE 372. The value of the goods which the carrier must pay in cases if loss or misplacement shall be determined in accor-dance with that declared in the bill of lading, the shipper not being allowed to present proof that among the goods declared therein there were articles of greater value and money.

Horses, vehicles, vessels, equipment and all other principal and accessory means of transportation shall be especially bound in favor of the shipper, although with respect to railroads said liability shall be subordinated to the provisions of the laws of concession with re-spect to the property, and to what this Code established as to the manner and form of effecting seizures and attachments against said companies.

ARTICLE 373. The carrier who makes the delivery of the mer-chandise to the consignee by virtue of combined agreements or ser-vices with other carriers shall assume the obligations of those who preceded him in the conveyance, reserving his right to proceed against the latter if he was not the party directly responsible for the fault which gave rise to the claim of the shipper or consignee.

The carrier who makes the delivery shall likewise acquire all the actions and rights of those who preceded him in the conveyance. The shipper and the consignee shall have an immediate right of action against the carrier who executed the transportation contract, or against the other carriers who may have received the goods trans-ported without reservation.

However, the reservation made by the latter shall not relieve them from the responsibilities which they may have incurred by their own acts.


ARTICLE 374. The consignees to whom the shipment was made may not defer the payment of the expenses and transportation charges of the goods they receive after the lapse of twenty-four hours following their delivery; and in case of delay in this payment, the carrier may demand the judicial sale of the goods transported in an amount necessary to cover the cost of transportation and the ex-penses incurred.

ARTICLE 375. The goods transported shall be especially bound to answer for the cost of transportation and for the expenses and fees incurred for them during their conveyance and until the moment of their delivery.

This special right shall prescribe eight days after the delivery has been made, and once prescribed, the carrier shall have no other action than that corresponding to him as an ordinary creditor.

ARTICLE 376. The preference of the carrier to the payment of what is owed him for the transportation and expenses of the goods delivered to the consignee shall not be cut off by the bankruptcy of the latter, provided it is claimed within the eight days mentioned in the preceding article.

ARTICLE 377. The carrier shall be liable for all the consequences which may arise from his failure to comply with the formalities prescribed by the laws and regulations of the public administration, during the whole course of the trip and upon arrival at the point of destination, except when his failure arises from having been led into error by falsehood on the part of the shipper in the declaration of the merchandise. If the carrier has acted by virtue of a


formal order of the shipper or consignee of the merchandise, both shall become responsible.

ARTICLE 378. Agents for transportation shall be obliged to keep a special registry, with the formalities required by Article 36, in which all the goods the transportation of which is undertaken shall be entered in consecutive order of number and dates, with a statement of the circumstances required in Article 350 and others following for the respective bills of lading.

ARTICLE 379. The provisions contained in Articles 349 and following shall be understood as equally applicable to those who, although they do not personally effect the transportation of the merchandise, contract to do so through others, either as contractors for a particular and definite operation, or as agents for transportations and conveyances.

In either case they shall be subrogated in the place of the carriers themselves, with respect to the obligations and responsibility of the latter, as well as with regard to their rights.

LAWS RELATED TO VESSELS AND SHIPPING IN THE PHILIPPINES CODE OF COMMERCEArticles 573 to 579, 585, 589, 591 to 593, 606 to 608 of the Code of Com-merceARTICLE 573. Merchant vessels constitute property which may be acquired and transferred by any of the means recognized by law. The acquisition of a vessel must appear in a written instrument, which shall not produce any effect with respect to third persons if not inscribed in the registry of vessels.The ownership of a vessel shall likewise be acquired by possession in good faith, continued for three years, with a just title duly recorded. In the absence of any of these requisites, continuous possession for ten years shall be necessary in


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order to acquire ownership.A captain may not acquire by prescrip-tion the vessel of which he is in command.Article 573 of the Code of Commerce[Refer to Sections 3 & 12(h) of P.D. No. 474]Presi-dential Decree No. 474PROVIDING FOR THE REORGANIZATION OF MARITIME FUNCTIONS IN THE PHILIPPINES, CREATING THE MAR-ITIME INDUSTRY AUTHORITY, AND FOR OTHER PUR-POSESSection 3. Definition of Terms. The terms, as used, in this Decree, shall have the following meaning, unless the context of the particular usage of the term indicates otherwise;a. "Maritime Indus-try", briefly referred to as "industry" in the broadest concept of the term. All enterprises engaged in the business of designing, construct-ing, manufacturing, acquiring, operating, supplying, repairing and/or maintaining vessels, or component parts thereof; of managing and/or operating shipping lines, stevedoring arrastre and customs brokerage services, shipyards, drydocks, marine railways, marine repair shops, shipping and freight forwarding agencies and similar enterprises.b. "Vessels" or "Watercraft" Any barge, lighter, bulk carrier, passenger ship freighter, tanker, container ship, fishing boats or other artificial contrivance utilizing any source of motive power, designed, used or capable of being used as a means of water transportation operating either as common contract carrier, including fishing vessels covered under Presidential Decree No. 43, except (1) those owned and/or op-erated by the Armed Forces of the Philippines and by foreign gov-ernments for military purposes, and (ii) bancas, sailboats and other waterborne contrivance of less than three gross tons capacity and not motorized.c. "Philippine national" A citizen of the Philippines; or a partnership or association wholly owned by and composed of citi-zens of the Philippines; or a corporation organized under the laws of the Philippines of which at least sixty per cent of the capital stock outstanding and entitled to vote is owned and held by Philippine citi-


zens; or a trustee of funds for pensions or other employee retirement or separation benefits, where the trustee is a Philippine national and at least sixty per cent of the funds will accrues to the benefit of the Philippine nationals: Provided, That where a corporation and its non-Filipino stockholders own stock in an enterprise, at least sixty per-cent of the members of the governing board of both corporations must be Philippine nationals.d. "Philippine flag vessel" A vessel or watercraft registered under Philippine laws.e. "Foreign flag vessel" A vessel or watercraft registered under the laws of a country other than the Philippines.f. "Philippines shipping companies" Philippine nationals registered and licensed under the laws of the Philippines to engage in the business of overseas and/or domestic water transporta-tion.Section 12(h). Approve the sale, lease or transfer of manage-ment of vessels owned by Philippine Nationals to foreign owned or controlled enterprises.Article 574 of the Code of CommerceARTI-CLE 574. Builders of vessels may employ the materials and follow, with respect to their construction and rigging, the systems most suit-able to their interests. Ship owners and seamen shall be subject to what the laws and regulations of the public administration on naviga-tion, customs, health, safety of vessels, and other similar matters.AR-TICLE 575. Co-owners of vessels shall have the right of repurchase and redemption in sales made to strangers, but they may exercise the same only within the nine days following the inscription of the sale in the registry, and by depositing the price at the same timeArticle 575 of the Code of CommerceRefer to Article 1620 of the Civil CodeArticle 1620. A co-owner of a thing may exercise the right of redemption in case the shares of all the other co-owners or of any of them, are sold to a third person. If the price of the alienation is grossly excessive, the redemptioner shall pay only a reasonable one. Should two or more co-owners desire to exercise the right of re-demption, they may only do so in proportion to the share they may


respectively have in the thing owned in common. (1522a)Articles 576 to 579 of the Code of CommerceARTICLE 576. In the sale of a vessel it shall always be understood as included the rigging, masts, stores and engine of a streamer appurtenant thereto, which at the time belongs to the vendor. The arms, munitions of war, provisions and fuel shall not be considered as included in the sale.The vendor shall be under the obligation to deliver to the purchaser a certified copy of the record sheet of the vessel in the registry up to the date of the sale.ARTICLE 577. If the alienation of the vessel should be made while it is on a voyage, the freightage which it earns from the time it receives its last cargo shall pertain entirely to the purchaser, and the payment of the crew and other persons who make up its complement for the same voyage shall be for his account.If the sale is made after the vessel has arrived at the port of its destination, the freightage shall pertain to the vendor, and the payment of the crew and other individuals who make up its complement shall be for his account, unless the contrary is stipulated in either case.ARTICLE 578. If the vessel being on a voyage or in a foreign port, its owner or owners should voluntarily alienate it, either to Filipinos or to for-eigners domiciled in the capital or in a port of another country, the bill of sale shall be executed before the consul of the Republic of the Philippines at the port where it terminates its voyage and said instru-ment shall produce no effect with respect to third persons if it is not inscribed in the registry of the consulate. The consul shall immedi-ately forward a true copy of the instrument of purchase and sale of the vessel to the registry of vessels of the port where said vessel is inscribed and registered.In every case the alienation of the vessel must be made to appear with a statement of whether the vendor re-ceives its price in whole or in part, or whether he preserves in whole or in part any claim on said vessel. In case the sale is made to a Fil-ipino, this fact shall be stated in the certificate of navigation.When a


vessel, being on a voyage, shall be rendered useless for navigation, the captain shall apply to the competent judge on court of the port of arrival, should it be in the Philippines; and should it be in a foreign country, to the consul of the Republic of the Philippines, should there be one, or, where there is none, to the judge or court or to the local authority; and the consul, or the judge or court, shall order an examination of the vessel to be made.If the consignee or the insurer should reside at said port, or should have representatives there, they must be cited in order that they may take part in the proceedings on behalf of whoever may be concerned.ARTICLE 579. After the dam-age to the vessel and the impossibility of her being repaired, in order to continue the voyage had been shown, its sale at public auction shall be ordered, subject to the following rules:1.The hull of the ves-sel, its rigging, engines, stores, and other articles shall be appraised, after making an inventory, said proceedings to be brought to the no-tice of the persons who may wish to take part in the auction.2.The order or decree ordering the auction to be held shall be posted in the usual places, an announcement thereof to be inserted in the Official Gazette and in two of the newspapers of the largest circulation of the port where the auction is to be held, should there be any. The period which may be fixed for the auction shall not be less than twenty days.3. These announcements shall be repeated every ten days, and their publication shall be made to appear in the records.4. The auc-tion shall be held on the day fixed, with the formalities prescribed in the common law for judicial sales.5. If the sale should take place while the vessel is in a foreign country, the special provisions gov-erning such cases shall be observed.Article 585 of the Code of CommerceARTICLE 585. For all purposes of law not modified or restricted by the provisions of this Code, vessels shall continue to be considered as personal property.Article 591 of the Code of Com-merceARTICLE 589.If two or more persons should be part owners


of a merchant vessel, a partnership shall be presumed as established by the co-owners. This partnership shall be governed by the resolu-tions of the majority of the members.If the part owners should not be more than two, the disagreement of views, if any, shall be decided by the vote of the member having the largest interest. If the interests are equal, it should be decided by lot. The person having the smallest share in the ownership shall have one vote; and proportionately the other part owners as many votes as they have parts equal to the smallest one.A vessel may not be detained, attached or levied upon in execution in its entirety, for the private debts of a part owner, but the proceedings shall be limited to the interest which the debtor may have in the vessel, without interfering with the navigation.Articles 591 to 593 of the Code of CommerceARTICLE 591.All the part owners shall be liable, in proportion to their respective ownership, for the expenses for repairing the vessel, and for other expenses which are incurred by virtue of a resolution of the majority. They shall likewise be liable in the same proportion for the expenses for the maintenance, equipment, and provisioning of the vessel, neces-sary for navigation.ARTICLE 592. The resolution of the majority with regard to the repair, equipment, and provisioning of the vessel in the port of departure shall bind the minority, unless the minority members renounce their interests, which must be acquired by the other co-owners, after a judicial appraisement of the value of the por-tion or portions assigned. The resolutions of the majority relating to the dissolution of the partnership and sale of the vessel shall also be binding on the minority.The sale of the vessel must be made at pub-lic auction, subject to the provisions of the law of civil procedure, unless the co-owners unanimously agree otherwise, saying always the right of repurchase and redemption provided for in Article 575.ARTICLE 593. The owners of a vessel shall have preference in her charter over other persons, under the same conditions and price.


If two or more of them should claim this right, the one having the greater interest shall be preferred; and should they have equal inter-ests, the matter shall be decided by lot.Articles 606 to 608 of the Code of CommerceARTICLE 606. If the captain should be a co-owner of the vessel, he may not be discharged unless the ship agent returns to him the amount of his interest therein, which, in the ab-sence of agreement between the parties, shall be appraised by experts appointed in the manner established in the law of civil proce-dure.ARTICLE 607. If the captain who is a co-owner should have obtained the command of the vessel by virtue of a special agreement contained in the articles of association, he may not be deprived of his office except for the causes mentioned in Article 605.ARTICLE 608. In case of the voluntary sale of the vessel, all contracts between the ship agent and the captain shall terminate, reserving to the latter his right to the indemnity which may pertain to him, according to the agreements made with the ship agent. They vessel sold shall remain subject to the security of the payment of said indemnity if, after the action against the vendor has been instituted, the latter is found to be insolvent.Civil Code – Common Carriers(Articles 1732 to 1766)SECTION 4Common Carriers (n)SUBSECTION 1General ProvisionsARTICLE 1732. Common carriers are persons, corpora-tions, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air, for compensation, offering their services to the public. ARTICLE 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers trans-ported by them, according to all the circumstances of each case. Such extraordinary diligence in the vigilance over the goods is fur-ther expressed in articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the passengers is


further set forth in articles 1755 and 1756. SUBSECTION 2Vigi-lance Over GoodsARTICLE 1734. Common carriers are responsi-ble for the loss, destruction, or deterioration of the goods, unless the same is due to any of the following causes only: (1) Flood, storm, earthquake, lightning, or other natural disaster or calamity; (2) Act of the public enemy in war, whether international or civil; (3) Act or omission of the shipper or owner of the goods; (4) The character of the goods or defects in the packing or in the containers; (5) Order or act of competent public authority. ARTICLE 1735. In all cases other than those mentioned in Nos. 1, 2, 3, 4, and 5 of the preceding arti -cle, if the goods are lost, destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted negligently, un-less they prove that they observed extraordinary diligence as re-quired in article 1733. ARTICLE 1736. The extraordinary responsi-bility of the common carrier lasts from the time the goods are uncon-ditionally placed in the possession of, and received by the carrier for transportation until the same are delivered, actually or constructively, by the carrier to the consignee, or to the person who has a right to re-ceive them, without prejudice to the provisions of article 1738. AR-TICLE 1737. The common carrier's duty to observe extraordinary diligence over the goods remains in full force and effect even when they are temporarily unloaded or stored in transit, unless the shipper or owner has made use of the right of stoppage in transitu. ARTICLE 1738. The extraordinary liability of the common carrier continues to be operative even during the time the goods are stored in a ware-house of the carrier at the place of destination, until the consignee has been advised of the arrival of the goods and has had reasonable opportunity thereafter to remove them or otherwise dispose of them. ARTICLE 1739. In order that the common carrier may be exempted from responsibility, the natural disaster must have been the proxi-mate and only cause of the loss. However, the common carrier must


exercise due diligence to prevent or minimize loss before, during and after the occurrence of flood, storm or other natural disaster in order that the common carrier may be exempted from liability for the loss, destruction, or deterioration of the goods. The same duty is incum-bent upon the common carrier in case of an act of the public enemy referred to in article 1734, No. 2. ARTICLE 1740. If the common carrier negligently incurs in delay in transporting the goods, a natural disaster shall not free such carrier from responsibility. ARTICLE 1741. If the shipper or owner merely contributed to the loss, destruc-tion or deterioration of the goods, the proximate cause thereof being the negligence of the common carrier, the latter shall be liable in damages, which however, shall be equitably reduced. ARTICLE 1742. Even if the loss, destruction, or deterioration of the goods should be caused by the character of the goods, or the faulty nature of the packing or of the containers, the common carrier must exercise due diligence to forestall or lessen the loss. ARTICLE 1743. If through the order of public authority the goods are seized or de-stroyed, the common carrier is not responsible, provided said public authority had power to issue the order. ARTICLE 1744. A stipula-tion between the common carrier and the shipper or owner limiting the liability of the former for the loss, destruction, or deterioration of the goods to a degree less than extraordinary diligence shall be valid, provided it be: (1) In writing, signed by the shipper or owner;(2) Supported by a valuable consideration other than the service ren-dered by the common carrier; and (3) Reasonable, just and not con-trary to public policy. ARTICLE 1745. Any of the following or simi-lar stipulations shall be considered unreasonable, unjust and contrary to public policy: (1) That the goods are transported at the risk of the owner or shipper; (2) That the common carrier will not be liable for any loss, destruction, or deterioration of the goods; (3) That the com-mon carrier need not observe any diligence in the custody of the


goods; (4) That the common carrier shall exercise a degree of dili-gence less than that of a good father of a family, or of a man of ordi-nary prudence in the vigilance over the movables transported; (5) That the common carrier shall not be responsible for the acts or omission of his or its employees; (6) That the common carrier's lia-bility for acts committed by thieves, or of robbers who do not act with grave or irresistible threat, violence or force, is dispensed with or diminished; (7) That the common carrier is not responsible for the loss, destruction, or deterioration of goods on account of the defec-tive condition of the car, vehicle, ship, airplane or other equipment used in the contract of carriage. ARTICLE 1746. An agreement lim-iting the common carrier's liability may be annulled by the shipper or owner if the common carrier refused to carry the goods unless the former agreed to such stipulation. ARTICLE 1747. If the common carrier, without just cause, delays the transportation of the goods or changes the stipulated or usual route, the contract limiting the com-mon carrier's liability cannot be availed of in case of the loss, de-struction, or deterioration of the goods. ARTICLE 1748. An agree-ment limiting the common carrier's liability for delay on account of strikes or riots is valid. ARTICLE 1749. A stipulation that the com-mon carrier's liability is limited to the value of the goods appearing in the bill of lading, unless the shipper or owner declares a greater value, is binding. ARTICLE 1750. A contract fixing the sum that may be recovered. by the owner or shipper for the loss, destruction, or deterioration of the goods is valid, if it is reasonable and just un-der the circumstances, and has been fairly and freely agreed upon. ARTICLE 1751. The fact that the common carrier has no competitor along the line or route, or a part thereof, to which the contract refers shall be taken into consideration on the question of whether or not a stipulation limiting the common carrier's liability is reasonable, just and in consonance with public policy. ARTICLE 1752. Even when


there is an agreement limiting the liability of the common carrier in the vigilance over the goods, the common carrier is disputably pre-sumed to have been negligent in case of their loss, destruction or de-terioration. ARTICLE 1753. The law of the country to which the goods are to be transported shall govern the liability of the common carrier for their loss, destruction or deterioration. ARTICLE 1754. The provisions of articles 1733 to 1753 shall apply to the passenger's baggage which is not in his personal custody or in that of his em-ployee. As to other baggage, the rules in articles 1998 and 2000 to 2003 concerning the responsibility of hotel-keepers shall be applica-ble. SUBSECTION 3Safety of PassengersARTICLE 1755. A com-mon carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances. ARTI-CLE 1756. In case of death of or injuries to passengers, common car-riers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as pre-scribed in articles 1733 and 1755. ARTICLE 1757. The responsibil-ity of a common carrier for the safety of passengers as required in ar-ticles 1733 and 1755 cannot be dispensed with or lessened by stipu-lation, by the posting of notices, by statements on tickets, or other-wise. ARTICLE 1758. When a passenger is carried gratuitously, a stipulation limiting the common carrier's liability for negligence is valid, but not for wilful acts or gross negligence.The reduction of fare does not justify any limitation of the common carrier's liability. ARTICLE 1759. Common carriers are liable for the death of or in-juries to passengers through the negligence or wilful acts of the for-mer's employees, although such employees may have acted beyond the scope of their authority or in violation of the orders of the com-mon carriers. This liability of the common carriers does not cease upon proof that they exercised all the diligence of a good father of a


family in the selection and supervision of their employees. ARTI-CLE 1760. The common carrier's responsibility prescribed in the preceding article cannot be eliminated or limited by stipulation, by the posting of notices, by statements on the tickets or otherwise. AR-TICLE 1761. The passenger must observe the diligence of a good fa-ther of a family to avoid injury to himself. ARTICLE 1762. The con-tributory negligence of the passenger does not bar recovery of dam-ages for his death or injuries, if the proximate cause thereof is the negligence of the common carrier, but the amount of damages shall be equitably reduced. ARTICLE 1763. A common carrier is respon-sible for injuries suffered by a passenger on account of the wilful acts or negligence of other passengers or of strangers, if the common carrier's employees through the exercise of the diligence of a good father of a family could have prevented or stopped the act or omis-sion. SUBSECTION 4Common ProvisionsARTICLE 1764. Dam-ages in cases comprised in this Section shall be awarded in accor-dance with Title XVIII of this Book, concerning Damages. Article 2206 shall also apply to the death of a passenger caused by the breach of contract by a common carrier. ARTICLE 1765. The Public Service Commission may, on its own motion or on petition of any interested party, after due hearing, cancel the certificate of public convenience granted to any common carrier that repeatedly fails to comply with his or its duty to observe extraordinary diligence as pre-scribed in this Section. ARTICLE 1766. In all matters not regulated by this Code, the rights and obligations of common carriers shall be governed by the Code of Commerce and by special laws.COM-MONWEALTH ACT No. 65IN ACT TO DECLARE THAT PUBLIC ACT NUMBERED FIVE HUNDRED AND TWENTY-ONE, KNOWN AS "CARRIAGE OF GOODS BY SEA ACT," ENACTED BY THE SEVENTY-FOURTH CONGRESS OF THE UNITED STATES, BE ACCEPTED, AS IT IS HEREBY


ACCEPTED BY THE NATIONAL ASSEMBLYWHEREAS, the Seventy-fourth Congress of the United States enacted Public Act Numbered Five hundred and twenty-one, entitled:"Carriage of Goods by Sea Act";WHEREAS, the primordial purpose of the said Acts is to bring about uniformity in ocean bills of lading and to give effect to the Brussels Treaty, signed by the United States with other powers;WHEREAS, the Government of the United States has left it to the Philippine Government to decide whether or not the said Act shall apply to carriage of goods by sea in foreign trade to and from Philippine ports;WHEREAS, the said Act of Congress contains ad-vanced legislation, which is in consonance with modern maritime rules and the practices of the great shipping countries of the world;WHEREAS, shipping companies, shippers, and marine insur-ance companies, and various chambers of commerce, which are di-rectly affected by such legislation, have expressed their desire that said Congressional Act be made applicable and extended to the Philippines; therefore,Be it enacted by the National Assembly of the Philippines:Section 1. That the provisions of Public Act Numbered Five hundred and twenty-one of the Seventy-fourth Congress of the United States, approved on April sixteenth, nineteen hundred and thirty-six, be accepted, as it is hereby accepted to be made applicable to all contracts for the carriage of goods by sea to and from Philip-pine ports in foreign trade: Provided, That nothing in the Act shall be construed as repealing any existing provision of the Code of Com-merce which is now in force, or as limiting its application.Section 2. This Act shall take effect upon its approval.Approved: October 22,1936.An Act Relating to the Carriage of Goods by Sea.Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That every bill of landing or similar document of title which is evidence of a contract for the carriage of goods by sea to or from ports of the United States, in for-


eign trade, shall have effect subject to the provisions of the Act.TI-TLE ISection 1. When used in this Act —(a) The term "carrier" in-cludes the owner or the charterer who enters into a contract of car-riage with a shipper.(b) The term "contract of carriage" applies only to contracts of carriage covered by a bill of lading or any similar document of title, insofar as such document relates to the carriage of goods by sea, including any bill of lading or any similar document as aforesaid issued under or pursuant to a charter party from the mo-ment at which such bill of lading or similar document of title regu-lates the relations between a carrier and a holder of the same.(c) The term "goods" includes goods, wares, merchandise, and articles of ev-ery kind whatsoever, except live animals and cargo which by the contract of carriage is stated as being carried on deck and is so car-ried.(d) The term "ship" means any vessel used for the carriage of goods by sea.(e) The term "carriage of goods" covers the period from the time when the goods are loaded on to the time when they are dis-charged from the ship.RISKSSection 2. Subject to the provisions of section 6, under every contract of carriage of goods by sea, the car-rier in relation to the loading handling, stowage, carriage, custody, care, and discharge of such goods, shall be subject to the responsibil-ities and liabilities and entitled to the rights and immunities here-inafter set forth.RESPONSIBILITIES AND LIABILITIESSection 3. (1) The carrier shall be bound, before and at the beginning of the voyage, to exercise due diligence to — (a) Make the ship seaworthy;(b) Properly man, equip, and supply the ship;(c) Make the holds, re-frigerating and cooling chambers, and all other parts of the ship in which goods are carried, fit and safe for their reception carriage and preservation.(2) The carrier shall properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried.(3) After receiving the goods into his charge the carrier, or the master or agent of the carrier, shall, on demand of the shipper, issue to the shipper a


bill of lading showing among other things — (a) The leading marks necessary for identification of the goods as the same are furnished in writing by the shipper before the loading of such goods starts, pro-vided such marks are stamped or otherwise shown clearly upon the goods if uncovered, or on the cases or coverings in which such goods are contained, in such a manner as should ordinarily remain legible until the end of the voyage.(b) Either the number of packages or pieces, or the quantity or weight, as the case may be, as furnished in writing by the shipper.(c) The apparent order and condition of the goods: Provided, That no carrier, master, or agent of the carrier, shall be bound to state or show in the bill of lading any marks, number, quantity, or weight which he has reasonable ground for suspecting not accurately to represent the goods actually received, or which he has had no reasonable means of checking.(4) Such a bill of lading shall be prima facie evidence of the receipt by the carrier of the goods as therein described in accordance with paragraphs (3) (a), (b), and (c) of this section: Provided, That nothing in this Act shall be construed as repealing or limiting the application of any part of the Act, as amended, entitled "An Act relating to bills of lading in inter-state and foreign commerce," approved August 29, 1916 (U. S. C. ti-tle 49, secs. 81-124), commonly known as the "Pomerene Bills of Lading Act."(5) The shipper shall be deemed to have guaranteed to the carrier the accuracy at the time of shipment of the marks, num-ber, quantity, and weight, as furnished by him; and the shipper shall indemnify the carrier against all loss damages, and expenses arising or resulting from inaccuracies in such particulars. The right of the carrier to such indemnity shall in no way limit his responsibility and liability under the contract of carriage or to any person other than the shipper.(6) Unless notice of loss or damage and the general nature of such loss or damage be given in writing to the carrier or his agent at the port of discharge before or at the time of the removal of the


goods into the custody of the person entitled to delivery thereof un-der the contract of carriage, such removal shall be prima facie evi-dence of the delivery by the carrier of the goods as described in the bill of lading. If the loss or damage is not apparent, the notice must be given within three days of the delivery.Said notice of loss or dam-age maybe endorsed upon the receipt for the goods given by the per-son taking delivery thereof.The notice in writing need not be given if the state of the goods has at the time of their receipt been the subject of joint survey or inspection.In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage un-less suit is brought within one year after delivery of the goods or the date when the goods should have been delivered: Provided, That if a notice of loss or damage, either apparent or concealed, is not given as provided for in this section, that fact shall not affect or prejudice the right of the shipper to bring suit within one year after the delivery of the goods or the date when the goods should have been deliv-eredIn the case of any actual or apprehended loss or damage the car-rier and the receiver shall give all reasonable facilities to each other for inspecting and tallying the goods.(7) After the goods are loaded the bill of lading to be issued by the carrier, master, or agent of the carrier to the shipper shall, if the shipper so demands, be a "shipped" bill of lading Provided, That if the shipper shall have previously taken up any document of title to such goods, he shall surrender the same as against the issue of the "shipped" bill of lading, but at the option of the carrier such document of title may be noted at the port of shipment by the carrier, master, or agent with name or name the names of the ship or ships upon which the goods have been shipped and the date or dates of shipment, and when so noted the same shall for the purpose of this section be deemed to constitute a "shipped" bill of lading.(8) Any clause, covenant, or agreement in a contract of carriage relieving the carrier or the ship from liability for loss or


damage to or in connection with the goods, arising from negligence, fault, or failure in the duties and obligations provided in this section, or lessening such liability otherwise than as provided in this Act, shall be null and void and of no effect. A benefit of insurance in fa-vor of the carrier, or similar clause, shall be deemed to be a clause relieving the carrier from liability.RIGHTS AND IMMUNITIES-Section 4. (1) Neither the carrier nor the ship shall be liable for loss or damage arising or resulting from unseaworthiness unless caused by want of due diligence on the part of the carrier to make the ship seaworthy, and to secure that the ship is properly manned, equipped, and supplied, and to make to the holds, refrigerating and cool cham-bers, and all other parts of the ship in which goods are carried fit and safe for their reception, carriage, and preservation in accordance with the provisions of paragraph (1) of section 3. Whenever loss or dam-age has resulted from unseaworthiness, the burden of proving the ex-ercise of due diligence shall be on the carrier or other persons claim-ing exemption under the section.(2) Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from — (a) Act, neglect, or default of the master, mariner, pilot, or the ser-vants of the carrier in the navigation or in the management of the ship;(b) Fire, unless caused by the actual fault or privity of the car-rier;(c) Perils, dangers, and accidents of the sea or other navigable waters;(d) Act of God;(e) Act of war,(f) Act of public enemies;(g) Arrest or restraint of princes, rulers, or people, or seizure under legal process;(h) Quarantine restrictions;(i) Act or omission of the shipper or owner of the goods, his agent or representative;(j) Strikes or lock-outs or stoppage or restraint of labor from whatever cause, whether partial or general; Provided, That nothing herein contained shall be construed to relieve a carrier from responsibility for the carrier's own acts;(k) Riots and civil commotions(l) Saving or attempting to save life or property at sea;(m) Wastage in bulk or weight or any other


loss or damage arising from inherent defect, quality, or vice of the goods;(n) Insufficiency of packing;(o) Insufficiency of inadequacy of marks;(p) Latent defects not discoverable by due diligence; and(q) Any other cause arising without the actual fault and privity of the carrier and without the fault or neglect of the agents or servants of the carrier, but the burden of proof shall be on the person claiming the benefit of this exception to show that neither the actual fault or privity of the carrier nor the fault or neglect of the agents or servants of the carrier contributed to the loss or damage.(3) The shipper shall not be responsible for loss or damage sustained by the carrier or the ship arising from any cause without the act, fault, or neglect of the shipper, his agents, or servants.(4) Any deviation in saving or at-tempting to save life or property at sea, or any reasonable deviation shall not be deemed to be an infringement or breach of this Act or of the contract of carriage, and the carrier shall not be liable for any loss or damage resulting therefrom: Provided, however, That if the devia-tion is for the purpose of loading cargo or unloading cargo or passen-gers it shall, prima facie, be regarded as unreasonable. (5) Neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with the transportation of goods in an amount exceeding $600 per package lawful money of the United States, or in case of goods not shipped in packages, per cus-tomary freight unit, or the equivalent of that sum in other currency, unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading. This decla-ration, if embodied in the bill of lading, shall be prima facie evi-dence, but shall not be conclusive on the carrier.By agreement be-tween the carrier, master, or agent of the carrier, and the shipper an-other maximum amount than that mentioned in this paragraph may be fixed: Provided, That such maximum shall not be less than the figure above named. In no event shall the carrier be liable for more


than the amount of damage actually sustained.Neither the carrier nor the ship shall be responsible in any event for loss or damage to or in connection with the transportation of the goods if the nature or value thereof has been knowingly and fraudulently misstated by the ship-per in the bill of lading.(6) Goods of an inflammable, explosive, or dangerous nature to the shipment whereof the carrier, master or agent of the carrier, has not consented with knowledge of their nature and character, may at any time before discharge be landed at any place or destroyed or rendered innocuous by the carrier without com-pensation, and the shipper of such goods shall be liable for all dam-ages and expenses directly or indirectly arising out of or resulting from such shipment. If any such goods shipped with such knowledge and consent shall become a danger to the ship or cargo, they may in like manner be landed at any place, or destroyed or rendered innocu-ous by the carrier without liability on the part of the carrier except to general average, if any.SURRENDER OF RIGHTS AND IMMU-NITIES AND INCREASE OF RESPONSIBILITIES AND LIA-BILITIESSection 5. A carrier shall be at liberty to surrender in whole or in part all or any of his rights and immunities or to increase any of his responsibilities and liabilities under this Act, provided such surrender or increase shall be embodied in the bill of lading is-sued to the shipper.The provisions of this Act shall not be applicable to charter parties; but if bills of lading are issued in the case of a ship under charter party, they shall comply with the terms of this Act. Nothing in this Act shall be held to prevent the insertion in a bill of lading of any lawful provision regarding general average.SPECIAL CONDITIONSSection 6. Notwithstanding the provisions of the pre-ceding sections, a carrier, master or agent of the carrier, and a ship-per shall, in regard to any particular goods be at liberty to enter into any agreement in any terms as to the responsibility and liability of the carrier for such goods, and as to the rights and immunities of the


carrier in respect of such goods, or his obligation as to seaworthiness (so far as the stipulation regarding seaworthiness is not contrary to public policy), or the care or diligence of his servants or agents in re-gard to the loading, handling stowage, carriage, custody, care, and discharge of the goods carried by sea: Provided, That in this case no bill of lading has been or shall be issued and that the terms agreed shall be embodied in a receipt which shall be a non-negotiable docu-ment and shall be marked as such.Any agreement so entered into shall have full legal effect: Provided, That this section shall not ap-ply to ordinary commercial shipments made in the ordinary course of trade but only to other shipments where the character or condition of the property to be carried or the circumstances, terms, and conditions under which the carriage is to be performed are such as reasonably to justify a special agreement.Section 7. Nothing contained in this Act shall prevent a carrier or a shipper from entering into any agreement, stipulation, condition, reservation, or exemption as to the responsi-bility and liability of the carrier or the ship for the loss or damage to or in connection with the custody and care and handling of goods prior to the loading on and subsequent to the discharge from the ship on which the goods are carried by sea.Section 8. The provisions of this Act shall not affect the rights and obligations of the carrier under the provisions of the Shipping Act, 1916, or under the provisions of section 4281 to 4289, inclusive, of the Revised Statutes of the United States, or of any amendments thereto; or under the provisions of any other enactment for the time being in force relating to the limitation of the liability of the owners of seagoing vessels.TITLE IISection 9. Nothing contained in this Act shall be construed as permitting a common carrier by water to discriminate between competing ship-pers similarly place in time and circumstances, either (a) with respect to the right to demand and receive bills of lading subject to the provi-sions of this Act; or (b) when issuing such bills of lading, either in


the surrender of any of the carrier's rights and immunities or in the increase of any of the carrier's responsibilities and liabilities pursuant to section 6, title I, of this Act or (c) in any other way prohibited by the Shipping Act, 1916, as amended.Section 10. Section 25 of the Interstate Commerce Act is hereby amended by adding the following proviso at the end of paragraph 4 thereof: "Provided, however, That insofar as any bill of lading authorized hereunder relates to the car-riage of goods by sea, such bill of lading shall be subject to the pro-visions of the Carriage of Goods by Sea Act."Section 11. Where un-der the customs of any trade the weight of any bulk cargo inserted in the bill of lading is a weight ascertained or accepted by a third party other than the carrier or the shipper, and the fact that the weight is so ascertained or accepted is stated in the bill of lading, then, notwith-standing any thing in this Act, the bill of lading shall not be deemed to be prima facie evidence against the carrier of the receipt of goods of the weight so inserted in the bill of lading, and the accuracy thereof at the time of shipment shall not be deemed to have been guaranteed by the shipper.Section 12. Nothing in this Act shall be construed as superseding any part of the Act entitled "An act relating to navigation of vessels, bills of lading, and to certain obligations, duties, and rights in connection with the carriage of property," ap-proved February 13,1893, or of any other law which would be appli-cable in the absence of this Act, insofar as they relate to the duties, responsibilities, and liabilities of the ship or carrier prior to the time when the goods are loaded on or after the time they are discharged from the ship.Section 13. This Act shall apply to all contracts for carriage of goods by sea to or from ports of the United States in for-eign trade. As used in this Act the term "United States" includes its districts, territories, and possessions: Provided, however, That the Philippine legislature may by law exclude its application to trans-portation to or from ports of the Philippine Islands. The term "for-


eign trade" means the transportation of goods between the ports of the United States and ports of foreign countries. Nothing in this Act shall be held to apply to contracts for carriage of goods by sea be-tween any port of the United States or its possessions, and any other port of the United States or its possession: Provided, however, That any bill of lading or similar document of title which is evidence of a contract for the carriage of goods by sea between such ports, contain-ing an express statement that it shall be subject to the provisions of this Act, shall be subjected hereto as fully as if subject hereto as fully as if subject hereto by the express provisions of this Act: Provided, further, That every bill of lading or similar document of title which is evidence of a contract for the carriage of goods by sea from ports of the United States, in foreign trade, shall contain a statement that it shall have effect subject to the provisions of this Act.Section 14. Upon the certification of the Secretary of Commerce that the foreign commerce of the United States in its competition with that of foreign nations is prejudiced the provisions, or any of them, of Title I of this Act, or by the laws of any foreign country or countries relating to the carriage of goods by sea, the President of the United States, may, from time to time, by proclamation, suspend any or all provisions of Title I of this Act for such periods of time or indefinitely as may be designated in the proclamation. The President may at any time re-scind such suspension of Title I hereof, and any provisions thereof which may have been suspended shall thereby be reinstated and again apply to contracts thereafter made for the carriage of goods by sea. Any proclamation of suspension or rescission of any such sus-pension shall take effect on a date named therein, which date shall be not less than ten days from the issue of the proclamation.Any con-tract for the carriage of goods by sea, subject to the provisions of this Act, effective during any period when title I hereof, or any part thereof, is suspended, shall be subject to all provisions of law now or


hereafter applicable to that part of Title I which may have thus been suspended.Section 15. This Act shall take effect ninety days after the date of its approval; but nothing in this Act shall apply during a pe-riod not to exceed one year following its approval to any contract for the carriage of goods by sea, made before the date on which this Act is approved, nor to any bill of lading or similar document of title is-sued, whether before or after such date of approval in pursuance of any such contract as aforesaid.Section 16. This Act may be cited as the "Carriage of Goods by Sea Act."Approved, April 16, 1936.RE-PUBLIC ACT No. 1407AN ACT TO BE KNOWN AS "THE PHILIPPINE OVERSEAS SHIPPING ACT OF NINETEEN HUNDRED AND FIFTY-FIVE."Section 1. Declaration of policy. Shipping commands a transcendental position in the economic devel-opment and growth of a nation. One of the urgent needs of the Philippines is a well-balanced Philippine merchant marine (a) suffi-cient to carry the expanding international trade of the Philippines in time of peace, (b) capable of serving as a naval and military auxiliary in time of war and national emergency, (c) owned and operated un-der the Philippine flag by citizens of the Philippines, or by associa-tions or corporations organized under the laws of the Philippines, at least sixty per cent of the capital of which is owned by citizens of the Philippines, and (d) composed of the best equipped, safest and most suitable types of modern vessels, and manned with trained and effi-cient Filipino officers and crew. To attain this objective it is hereby declared to be the policy of the Government of the Philippines: (a) to encourage and assist vessels of Philippine registry engaged in inter-national trade; (b) to foster the development and encourage the main-tenance of such a Philippine merchant marine; (c) to provide finan-cial aid and assistance in long-range ship-building program, and at all times, to promote shipping in such other respects as may be re-quired to attract private capital and enterprise to the shipping indus-


try and create a healthy climate to attract private enterprise to invest in the overseas transportation; and (d) to do whatever may be neces-sary, from time to time, to attain these objectives. The Republic of the Philippines, in common with other maritime nations, recognizes the international character of shipping in foreign trade and existing international practices in maritime transportation, and declares it to be part of its national policy to cooperate with other friendly nations in the maintenance and improvement of such practices.Section 2. In pursuance of the above-declared policy any citizen of the Philip-pines, or any association or corporation organized under the laws of the Philippines, at least sixty per cent of the capital of which is owned by citizens of the Philippines, engaged or which shall engage exclusively in the overseas shipping business, and in the construction of modern boats for overseas service shall be exempt from the pay-ment of income tax on income derived from his or its shipping busi-ness for a period of ten years from the date of approval of this Act, provided that all those who avail themselves of the loan assistance in this Act shall invest all net profits realized during that period in the construction, purchase, or acquisition of additional vessels and equipment and/or in the improvement of its vessels and equipment.-Section 3. There is hereby appropriated out of any funds in the Na-tional Treasury not otherwise appropriated or from loans which may be contracted either locally or abroad for the purpose, by the Na-tional Development Company through an agency of the Philippine Government, for the fiscal year ending June thirty, nineteen hundred and fifty-six, and for each of the four fiscal years thereafter, the sum of twenty million pesos annually for the construction, purchase, or acquisition of ocean-going vessels for the purpose of resale, lease or charter to persons, associations or corporations referred to in section two of this Act. The fund may also be invested in loans to citizens of the Philippines or to associations or corporations organized under the


laws of the Philippines, at least sixty per cent of the capital of which is owned by citizens of the Philippines, for the purpose of financing the construction, purchase, or acquisition and operation by such citi-zens, associations or corporations of ocean-going vessels. Section 4. The administration and investment of the annual sums appropriated, pursuant to section three of this Act, shall be vested in the National Development Company, which is hereby authorized and empowered to acquire ocean-going vessels for resale upon an irrevocable con-tract to purchase such vessels; to make from the said sums the loans referred to above; to make or cause to be made studies and investiga-tions of the person or entity applying for the loan of the shipping ser-vice to be established; and to determine the advisability of making said loan. Section 5. All loans authorized under this Act shall be upon the security of a preferred mortgage on the vessel for the acqui-sition of which such loans are made, including its equipment, and the certificate or any other form of authorization for the operation of such vessels and the shipping service of the borrower. All said loans shall be self-liquidating within a period not to exceed twenty years and shall bear interest at the rate of not more than four and one-half per cent per annum: Provided, however, That such loans shall not ex-ceed seventy-five per cent of the cost of the vessels: Provided, fur-ther, That such vessels shall be fully insured: Provided, finally, That no rights acquired under this Act by the vendee, lessee or charterer of the vessel shall, during the existence of the contractual agreement, be transferred or otherwise encumbered in favor of third parties with-out the consent of the National Development Company.Section 6. All moneys representing payments of principal and interest on loans made pursuant to this Act shall be considered as special fund to be used exclusively to carry out the provisions of this Act.Section 7. The National Development Company is authorized and empowered to bid for and purchase at any foreclosure or other sale, or otherwise


to acquire the vessels, including all other equipment, certificate or authorization, for the operation of such vessels, pledged or mort-gaged to secure any loan made pursuant to this Act; to pay the pur-chase price and any costs and expenses incurred in connection there-with from the sums authorized in section three of this Act; to accept title to any vessel, including all its property and equipment, certifi-cate or authorization for its operation, so purchased or acquired in the name of the Government of the Philippines; to lease or charter on bare-boat basis for an amount which, if computed annually, shall not exceed seven per cent of the total cost of such vessel and equipment and for such period as may be deemed necessary or advisable to pro-tect the investment therein; and to sell such vessel and all its prop-erty, certificate or authorization for its operation, so acquired, upon such terms and for such consideration as the National Development Company shall determine to be reasonable. The sale of vessels shall be made only to responsible persons who are citizens of the Philip-pines, or associations or corporations organized under the laws of the Philippines, at least sixty per cent of the capital of which is owned by citizens of the Philippines, who agree to maintain such lines upon such terms of payment and other conditions as may be deemed just and necessary to secure and maintain the service of said lines. Sec-tion 8. For the purpose of making the studies and investigations herein provided for, the National Development Company may re-quest and utilize, with the approval of the proper heads of depart-ments, free of charge, such services of national officers and employ-ees and of officers and employees of any government-owned or con-trolled corporation as are available, and such services shall be con-sidered to have been rendered to the departments, bureaus or offices in which they are employed.Section 9. The National Development Company is empowered to issue the necessary rules and regulations to carry out the provisions and purposes of this Act subject to the


limitations imposed in this Act. It shall present to the Congress at the close of each fiscal year a full report of its activities under this Act.-Section 10. The President of the Philippines may in time of war and other national emergency, take possession, absolutely or temporarily, for any naval or military purpose, of any and all vessels of Philippine registry. The Government shall pay the person whose vessels has been taken, upon ascertainment by agreement or otherwise, the fair actual value based upon normal conditions at the time of taking the interest of such person in every vessel taken absolutely, or if taken for a limited period, the fair charter value under normal conditions for such period. In case of disagreement, as to such fair value it shall be determined by appraisers, one to be appointed by the National De-velopment Company, one by the person whose vessel has been taken, and a third by the two so appointed. The finding of such ap-praisers shall be final and binding upon both parties.Section 11. For the purpose of this Act, an ocean-going vessel of Philippine registry is deemed to be engaged in international trade when it undertakes the carriages of goods and/or passengers from the Philippines to a for-eign port, or from a foreign port to either another port or a Philippine port.Section 12. All dollars required by ocean-going vessels of Philippine registry or by operators of ocean-going vessels of Philip-pine registry for the purchase of vessels, repair and improvement, en-gines, spare parts, accessories, supplies and other expenses required for the operation of the vessels in foreign ports or in the high seas, when recommended by the National Economic Council, shall be made available by the Central Bank of the Philippines or by any other agency in charge of dollar controls, subject to the rules and regulations of the Central Bank, free of exchange tax, and that all such engines, spare parts, accessories, supplies and materials needed for the repair or construction of vessels shall be exempt from the spe-cial import tax: Provided, That previous certification by the National


Shipyards and Steel Corporation shall be issued to the effect that the above-mentioned vessels, repair and improvement, engines, spare parts, accessories and supplies cannot be furnished by the National Shipyards and Steel Corporation. All dollars acquired or spent by the owners of said vessels shall be properly accounted for to the Central Bank of the Philippines or to any other agency in charge of dollar controls. Section 13. All laws, executive orders and regulations, or parts thereof, which are inconsistent with this Act are hereby re-pealed.Section 14. This Act shall take effect upon its approval.Ap-proved: September 9, 1955.REPUBLIC ACT No. 4136AN ACT TO COMPILE THE LAWS RELATIVE TO LAND TRANS-PORTATION AND TRAFFIC RULES, TO CREATE A LAND TRANSPORTATION COMMISSION AND FOR OTHER PUR-POSESCHAPTER IPRELIMINARY PROVISIONS ARTI-CLEARTICLE ITitle and Scope of ActSection 1. Title of Act. - This Act shall be known as the "Land Transportation and Traffic Code." Section 2. Scope of Act. - The provisions of this Act shall control, as far as they apply, the registration and operation of motor vehicles and the licensing of owners, dealers, conductors, drivers, and similar matters. ARTICLE IIDefinitionsSection 3. Words and phrases defined. - As used in this Act: (a) "Motor Vehicle" shall mean any vehicle propelled by any power other than muscular power using the public highways, but excepting road rollers, trolley cars, street-sweepers, sprinklers, lawn mowers, bulldozers, graders, fork-lifts, amphibian trucks, and cranes if not used on public highways, vehicles which run only on rails or tracks, and tractors, trailers and traction engines of all kinds used exclusively for agricultural purpos-es.Trailers having any number of wheels, when propelled or intended to be propelled by attachment to a motor vehicle, shall be classified as separate motor vehicle with no power rating. (b) "Passenger auto-mobiles" shall mean all pneumatic-tire vehicles of types similar to


those usually known under the following terms: touring car, com-mand car, speedster, sports car, roadster, jeep, cycle, car (except mo-tor wheel and similar small outfits which are classified with motor-cycles), coupe, landaulet, closed car, limousine, cabriolet, and sedan. Motor vehicles with changed or rebuilt bodies, such as jeepneys, jit-neys, or station wagons, using a chassis of the usual pneumatic-tire passenger automobile type, shall also be classified as passenger auto-mobile, if their net allowable carrying capacity, as determined by the Commissioner of Land Transportation, does not exceed nine passen-gers and if they are not used primarily for carrying freight or mer-chandise. The distinction between "passenger truck" and "passenger automobile" shall be that of common usage: Provided, That a motor vehicle registered for more than nine passengers shall be classified as "truck": And Provided, further, That a "truck with seating compart-ments at the back not used for hire shall be registered under special "S" classifications. In case of dispute, the Commissioner of Land Transportation shall determine the classification to which any special type of motor vehicle belongs. (c) "Articulated vehicle" shall mean any motor vehicle with a trailer having no front axle and so attached that part of the trailer rests upon motor vehicle and a substantial part of the weight of the trailer and of its load is borne by the motor vehi-cle. Such a trailer shall be called as "semi-trailer." (d) "Driver" shall mean every and any licensed operator of a motor vehicle. (e) "Pro-fessional driver" shall mean every and any driver hired or paid for driving or operating a motor vehicle, whether for private use or for hire to the public. Any person driving his own motor vehicle for hire is a professional driver. (f) "Owner" shall mean the actual legal owner of a motor vehicle, in whose name such vehicle is duly regis-tered with the Land Transportation Commission. The "owner" of a government-owned motor vehicle is the head of the office or the chief of the Bureau to which the said motor vehicle belongs. (g)


"Dealer" shall mean every person, association, partnership, or corpo-ration making, manufacturing, constructing, assembling, remodeling, rebuilding, or setting up motor vehicles; and every such entity acting as agent for the sale of one or more makes, styles, or kinds of motor vehicles, dealing in motor vehicles, keeping the same in stock or selling same or handling with a view to trading same. (h) "Garage" shall mean any building in which two or more motor vehicles, either with or without drivers, are kept ready for hire to the public, but shall not include street stands, public service stations, or other public places designated by proper authority as parking spaces for motor vehicles for hire while awaiting or soliciting business. (i) "Gross weight" shall mean the measured weight of a motor vehicle plus the maximum allowable carrying capacity in merchandise, freight and/or passenger, as determined by the Commissioner of Land Transporta-tion. (j) "Highways" shall mean every public thoroughfare, public boulevard, driveway, avenue, park, alley and callejon, but shall not include roadway upon grounds owned by private persons, colleges, universities, or other similar institutions. (k) "The Commissioner of Land Transportation or his deputies" shall mean the actual or acting chief of the Land Transportation Commission or such representa-tives, deputies, or assistants as he may, with the approval of the Sec-retary of Public Works and Communications, appoint or designate in writing for the purpose contemplated by this Act. (l) "Parking or parked", for the purposes of this Act, shall mean that a motor vehicle is "parked" or "parking" if it has been brought to a stop on the shoul-der or proper edge of a highway, and remains inactive in that place or close thereto for an appreciable period of time. A motor vehicle which properly stops merely to discharge a passenger or to take in a waiting passenger, or to load or unload a small quantity of freight with reasonable dispatch shall not be considered as "parked", if the motor vehicle again moves away without delay. (m) "Tourist" shall


mean a foreigner who travels from place to place for pleasure or cul-ture. ARTICLE IIIAdministration of ActSection 4. Creation of the Commission. - (a) There is created under the Department of Pub-lic Works and Communications an office which shall be designated and known as the Land Transportation Commission, composed of one Commissioner and one Deputy Commissioner, who shall be vested with the powers and duties hereafter specified. Whenever the word "Commission" is used in this Act, it shall be deemed to mean the Land Transportation Commission, and whenever the word "Com-missioner" is used in this Act, it shall be taken to mean the Commis-sioner or Deputy Commissioner. The Commissioner and the Deputy Commissioner shall be natural-born citizens and residents of the Philippines, and they shall be appointed by the President of the Philippines, with the consent of the Commission on Appointments of the Congress of the Philippines: Provided, however, That the present Administrator, Assistant Administrator and the personnel of the Mo-tor Vehicles Office shall continue in office without the necessity of reappointment. (b) The Commissioner and Deputy Commissioner shall hold office until removed in accordance with the provisions of the Revised Administrative Code. (c) The Commissioner shall re-ceive an annual compensation of twelve thousand pesos and the Deputy Commissioner, an annual compensation of ten thousand four hundred pesos. The Commissioner shall be assisted by one head ex-ecutive assistant (MV regulation adviser or chief), one administrative officer, one registration regulation chief, one inspection, examination and licensing regulation chief, one law and traffic enforcement regu-lation chief, one provincial regulation chief, one utility and property regulation chief, one accounting officer, one internal chief auditor, and one personnel officer, who shall receive an annual compensation of nine thousand pesos each; eight land transportation regional direc-tors who shall receive an annual compensation of eight thousand four


hundred pesos each and eight land transportation assistant regional directors, who shall receive an annual compensation of seven thou-sand pesos each and ten assistant regulation chiefs, who shall receive an annual compensation of seven thousand pesos each. (d) The Com-mission shall have its offices in Quezon City where the present Mo-tor Vehicle Office is located, and shall establish a regional branch of-fice each in Tuguegarao (Cagayan), Baguio City, Pasig (Rizal), Lipa City, San Fernando (La Union), Naga City, Cebu City, Iloilo City, Cagayan de Oro City, and Davao City, to be headed by a regional di-rector who will have immediate administration, supervision and con-trol over activities and administration of the Commission in the re-spective regions. The Commissioner shall be responsible for the ad-ministration of this Act and shall have, in connection therewith, the following powers and duties, in addition to those mentioned else-where in this Act: (1) With the approval of the Secretary of Public Works and Communications, to issue rules and regulations not in conflict with the provisions of this Act, prescribing the procedure for the examination, licensing and bonding of drivers; the registration and re-registration of motor vehicles, transfer of ownership, change of status; the replacement of lost certificates, licenses, badges, per-mits or number plates; and to prescribe the minimum standards and specifications including allowable gross weight, allowable length, width and height or motor vehicles, distribution of loads, allowable loads on tires, change of tire sizes, body design or carrying capacity subsequent to registration and all other special cases which may arise for which no specific provision is otherwise made in this Act. (2) To compile and arrange all applications, certificates, permits, licenses, and to enter, note and record thereon transfers, notifications, suspen-sions, revocations, or judgments of conviction rendered by compe-tent courts concerning violations of this Act, with the end in view of preserving and making easily available such documents and records


to public officers and private persons properly and legitimately inter-ested therein.(3) To give public notice of the certificates, permits, li-censes and badges issued, suspended or revoked and/or motor vehi-cles transferred and/or drivers bonded under the provisions of this Act. (4) The Commissioner of Land Transportation, with the ap-proval of the Secretary of Public Works and Communications, may designate as his deputy and agent any employee of the Land Trans-portation Commission, or such other government employees as he may deem expedient to assist in the carrying out the provisions of this Act. (5) The Commissioner of Land Transportation and his deputies are hereby authorized to make arrest for violations of the provisions of this Act in so far as motor vehicles are concerned; to issue subpoena and subpoena duces tecum to compel the appearance of motor vehicle operators and divers and/or other persons or con-ductors; and to use all reasonable means within their powers to se-cure enforcement of the provisions of this Act. (6) The Commis-sioner of Land Transportation or his deputies may at any time exam-ine and inspect any motor vehicle to determine whether such motor vehicle is registered, or is unsightly, unsafe, overloaded, improperly marked or equipped, or otherwise unfit to be operated because of possible excessive damage to highways, bridges and/or culverts. (7) The Philippine Constabulary and the city and municipal police forces are hereby given the authority and the primary responsibility and duty to prevent violations of this Act, and to carry out the police pro-visions hereof within their respective jurisdiction: Provided, That all apprehensions made shall be submitted for final disposition to the Commissioner and his deputies within twenty-four hours from the date of apprehension. (8) All cases involving violations of this Act shall be endorsed immediately by the apprehending officer to the Land Transportation Commission. Where such violations necessitate immediate action, the same shall be endorsed to the traffic court, city


or municipal court for summary investigation, hearing and disposi-tion, but in all such cases, appropriate notices of the apprehensions and the dispositions thereof shall be given to the Commissioner of Land Transportation by the law-enforcement agency and the court concerned. Notation of all such dispositions shall be entered in the records, and copy shall be mailed to the owner and to the driver con-cerned. CHAPTER IIREGISTRATION OF MOTOR VEHI-CLESARTICLE IDuty to Register, Reports, Applications, Clas-sificationsSection 5. All motor vehicles and other vehicles must be registered.(a) No motor vehicle shall be used or operated on or upon any public highway of the Philippines unless the same is properly registered for the current year in accordance with the provisions of this Act. (b) Any registration of motor vehicles not renewed on or before the date fixed for different classifications, as provided hereun-der shall become delinquent and invalid: 1. For hire motor vehicles - on or before the last working day of February. 2. Privately-owned motor vehicles - from March one to the last working day of May. 3. All other motor vehicles - from June one to the last working day of June; except when the plates of such motor vehicles are returned to the Commission in Quezon City or to the Office of the Motor Vehi-cles Registrar in the provincial or city agency of the Commission on or before the last working day of December of the year of issue. (c) Dealer's reports - The Commissioner of Land Transportation shall re-quire dealers to furnish him with such information and reports con-cerning the sale, importation, manufacture, number of stocks, trans-fer or other transactions affecting motor vehicles as may be neces-sary for the effective enforcement of the provisions of this Act. (d) Change of motor number prohibited. - No repair or change in the motor vehicle involving the exchange, elimination, effacing, or re-placing of the original or registered serial or motor number as stamped or imprinted, shall be allowed, and any motor vehicle with a


trace of having its motor number altered or tampered with shall be refused registration or re-registration, unless such is satisfactorily ex-plained and approved by the Commissioner. (e) Encumbrances of motor vehicles. - Mortgages, attachments, and other encumbrances of motor vehicles, in order to be valid, must be recorded in the Land Transportation Commission and must be properly recorded on the face of all outstanding copies of the certificates of registration of the vehicle concerned. Cancellation or foreclosure of such mortgages, at-tachments, and other encumbrances shall likewise be recorded, and in the absence of such cancellation, no certificate of registration shall be issued without the corresponding notation of mortgage, attach-ment and/or other encumbrances. Records of encumbrances of motor vehicles shall be kept by the Land Transportation Commission in chronological sequence and shall contain, among other things, the time, date and number of the entry in a "Book of Motor Vehicles" re-ferring to the creation, cancellation or foreclosure of the aforesaid mortgages, attachments or to other encumbrances. The Land Trans-portation Commission shall collect a fee of five pesos for every an-notation of a mortgage, attachment and/or other encumbrances, or cancellation thereof. Section 6. Application and payments for regis-tration. - Applications and payments for registration shall be made either personally or by registered mail, and the date of the cancella-tion of the postage stamps of envelopes containing money order or check shall be taken as the date of the application and/or payment for registration: Provided, That the application is properly prepared and the payment for registration is sufficient as required by law. Section 7. Registration Classification. - Every motor vehicle shall be regis-tered under one of the following described classifications: (a) private passenger automobiles; (b) private trucks; and (c) private motorcy-cles, scooters, or motor wheel attachments. Motor vehicles registered under these classifications shall not be used for hire under any cir-


cumstances and shall not be used to solicit, accept, or be used to transport passengers or freight for pay. Laborers necessary to handle freight on board private trucks may ride on such trucks: Provided, That seats shall not be installed in the rear compartment thereof and that only such number of laborers, not exceeding ten, as may be needed to handle the kind of freight carried, shall ride on the truck: Provided, further, That the combined weight of cargo and passengers does not exceed the registered net capacity of the truck. For the pur-pose of this section, a vehicle habitually used to carry freight not be-longing to the registered owner thereof, or passengers not related by consanguinity or affinity within the fourth civil degree to such owner, shall be conclusively presumed to be "for hire." No person shall be allowed to register as private truck any truck not actually and reasonably necessary to carry out his duly licensed business or legitimate occupation or industry regularly paying taxes. (d) Public utility automobiles; (e) public utility trucks; (f) taxis and auto-cale-sas; (g) garage automobiles; (h) garage trucks; (i) hire trucks: and (j) trucks owned by contractors and customs brokers and customs agents. Application for registration under these classifications shall be accompanied by a certificate of public convenience or a special permit issued by the Public Service Commission, and motor vehicles registered under these classifications shall be subject to the Public Service Law, rules and regulations, as well as the provisions of this Act. (k) Undertakes (l) Dealers - Registrations under this classifica-tion are intended to cover generally and successively all the motor vehicles imported or handled by dealers for sale. Motor vehicles reg-istered under the dealer's classification shall, under no circumstances, be employed to carry passengers or freight in the dealer's business, or for hire. Such vehicles shall be operated under this classification only for the purpose of transporting the vehicle itself from the pier or factory to the warehouse or sales room or for delivery to a prospec-


tive purchaser or for test or demonstration. (m) Government automo-biles; (n) government trucks; and (o) government motorcycles. Mo-tor vehicles owned by the Government of the Philippines or any of its political subdivisions shall be registered under these classifica-tions. Motor vehicles owned by government corporations, by govern-ment employees or by foreign governments shall not be registered under this classification. (p) Tourists bringing their own motor vehi-cles to the Philippines may, without registering such motor vehicles, use the same during but not after ninety days of their sojourn: Pro-vided, That the motor vehicle displays the number plates for the cur-rent year of some other country or state, and said number plates as well as the name and address (permanent and temporary) of the owner thereof are registered in the Land Transportation Commission prior to the operation of the motor vehicle. If such tourist remain in the Philippines longer than ninety days, the motor vehicle shall not be operated unless registered in accordance with this Act and the corresponding registration fees paid. (q) Special. The Commissioner of Land Transportation may, in his discretion, allow the registration under this classification of motor vehicles which do not conform to the foregoing described regular classification. ARTICLE IIRegis-tration FeesSection 8. Schedule of registration fees. - Except as oth-erwise specifically provided in this Act, each application for renewal of registration of motor vehicles shall be accompanied by an annual registration fee in accordance with the following schedule: (a) Pri-vate automobiles with pneumatic rubber tires, an amount based on their respective shipping weight or factory weight as indicated in the following schedule: 1,000 kilos or less P75.00 1,000 to 1,500 kilos 100.00 1,501 to 2,000 kilos 135.00 2,001 kilos and above 180.00 The factory or shipping weight of a private automobile shall be ob-tained from the Red Book edited by the National Market Report, Inc., of the United States of America: Provided, further, That in the


case of automobiles with altered, changed or rebuilt bodies, the weight as obtained: by actual weighing shall be considered the vehi-cles weight: Provided, furthermore, That the increase registration fees herein prescribed shall not apply to jeeps and jeepneys for pri-vate use or for hire and the fees hereof shall be those prescribed for them before the approval of this Act. The registered passenger ca-pacity of passenger automobiles operated for hire or for private use shall be determined as follows: 1. For each adult passenger, a hori-zontal rectangular area, including seat and feet space, not less than thirty-five centimeters wide and sixty centimeters long, except in the front seat, which shall allow an area fifty centimeters wide for the operator. 2. For each half passenger, a horizontal rectangular area, including seat and feet spaces, not less that seventeen and a half cen-timeters wide by sixty centimeters long, provided, that each continu-ous row of seats shall not be allowed to have more that one-half pas-senger. (b) Private motor trucks, passenger buses and trailers with pneumatic rubber tires, the sum of five pesos for every hundred kilo-grams of maximum allowable gross weight or fraction thereof. (c) Private motor trucks, passenger buses and trailers with solid rubber tires or with part-solid and part-pneumatic rubber tires, the sum of seven pesos for every hundred kilograms of maximum allowable gross weight or fraction thereof. (d) Private motorcycles and scooters of two or three wheels and bicycles with motor attachments, the sum of thirty pesos. (e) The fee for registration of motor vehicles for hire shall be sixty percent more than the fee prescribed for private motor vehicles of the same category. (f) The fee for registration of diesel-consuming vehicles shall be fifty percent more than that of vehicles using motor fuel other than diesel oil. The fee for registration of mo-tor vehicles for hire shall be sixty percent more than the fees pre-scribed for private motor vehicles. (g) No regular registration fees shall be charged for the general registration of motor vehicles con-


templated under the dealer's classification: Provided, That the Com-missioner of Land Transportation shall provide appropriate dealer's number plates corresponding to the classification of vehicles herein-below described, and registration fee for every set of such dealer's number plates shall be in accordance with the following schedule of rates; Two hundred pesos for each truck or trailer; One hundred pe-sos for each passenger automobile; and Twenty pesos for each mo-torcycle and the like. (h) Registration under the "Government Motor Vehicle" classification shall be free of charge, upon request of the chief of bureau or office concerned. (i) Motor vehicles not intended to be operated or used upon any public highway, or which are oper-ated on highways not constructed or maintained by the Government, or are intended not to be used or operated at all, shall be exempt from payment of the registration fees provided in this Act, but shall each pay an annual recording and service fee of fifteen pesos: Pro-vided, however, That no refund, credit for, or reimbursement of reg-istration fees or part thereof shall be made to any owner on account of the discontinuance of the use or operation of a motor vehicle sub-sequent to the payment of such registration fees: Provided, further, That in the event motor vehicles exempted under this section shall be found operated on any public highways, the regular registration fees and surcharges shall be collected in addition to whatever penalties may be imposed for violation of this Act. The Commissioner of Land Transportation shall provide distinctive number plates for vehicles exempted from payment of regular registration fees, and the owner of the vehicles concerned shall pay four pesos for each set of such number plates. (j) The maximum allowable gross weight of a motor truck, passenger bus, or trailer, upon which to compute the registra-tion fee thereof, shall be determined by the Commissioner of Land Transportation. He shall, from time to time as the need of the service may require, prepare, subject to the approval of the Secretary of Pub-


lic Works and Communications, suitable tables of maximum allow-able loads per wheel for different sizes kinds of tires. (k) The regis-tration fees provided in this Act for trucks may be payable in two equal installment, the first to be paid on or before the last working day of February if for hire, and in March if private; and the second to be paid on or before the last working day of August: Provided, That the fifty per cent penalty shall apply only to the unpaid balance of the remaining period of delinquency. Section 9. Permissible weights and dimensions of vehicles in highways traffic. (a) The maximum gross weight and measurement of motor vehicles, unladen or with load, permissible on public highways shall be as specified hereunder, subject to such regulations as the Commissioner with the approval of the Secretary of Public Works and Communications, may promul-gate, from time to time, as the conditions of the public highways may warrant and the needs of the service may require. Permissible maxi-mum weights:

1. Per most heavily loaded wheel

three thousand six hundred kilo-grams;

2. Per most heavily loaded axle eight thousand kilograms;

3. Per most heavily loaded axle group (the two axles of the group being at least one me-ter and less than two meters apart)

fourteen thousand five hundred kilograms.

An axle weight shall be the total weight transmitted to the road by all the wheels the centers of which can be included between the parallel transverse vertical planes one meter apart extending across the full width of the vehicles.No provincial, city or municipal author-ity shall enact or enforce any ordinance or resolution regulating or prescribing the maximum gross weight of any motor vehicle. (b) No


motor vehicle operating as a single unit shall exceed the following dimensions: Overall width two and five-tenths meters Overall height four meters Overall length: Freight vehicles with two axles ten me-ters Passenger vehicles with two axles eleven meters Vehicles with three or more axles fourteen meters (c) No motor vehicle and/or trailer combination shall exceed eighteen meters in overall projected length, including any load carried on such vehicle and trailer. (d) No articulated vehicles shall be allowed to draw or pull a trailer and no vehicle already drawing a trailer shall draw another. Section 10. Spe-cial permits, fees for. - The Commissioner with the approval of the Secretary of Public Works and Communications, shall issue regula-tions and schedules of additional fees under which special permits may be issued in the discretion of the Commissioner or his deputies for each of the following special cases, without which special permit no vehicles shall be operated on the public highways: (a) To operate a motor vehicle or trailer outfit with wheel, axle, or axle group loads in excess of the limits fixed in subsection (a) of Section nine hereof or in any regulation issued by the Commissioner. (b) To operate a motor vehicle the size of which exceeds the limit of permissible di-mensions specified in paragraph (b) of Section nine hereof. (c) To operate a motor vehicle with any part of the load extending beyond the projected width of the vehicle.(d) To pull two trailers behind a motor vehicle. (e) For any other special authority relating to the use of vehicles, not otherwise specifically provided herein. Section 11. Additional fees. - In addition to the fees elsewhere provided in this Act, for each change of registration, from private to for hire or vice-versa; revision of gross weight rating, change of tire size; transfer of ownership; replacement of a lost registration certificate, number plate, driver's license or permit; badge; preparation of affidavit or certified copy of records, or for any similar circumstances requiring the issue, revision, or reissue of a certificate of registration, driver's


license, badge, permit, or other document, a fee of two pesos shall be collected. The replacement of a lost or utterly spoiled certificate, number plate, license, badge or permit shall render the original in-valid. In case of request in writing for certification of data or facts in-volving two or more vehicles, a fee of five pesos a page or part thereof shall be collected for each certification. Section 12. Fee for original registration for part of year. - If any application for the original registration is made during the first quarter of a calendar year, the total annual fee for the year shall be paid, if made during the second quarter, three-fourths of the annual fee for that year shall be paid, if made during the third quarter, one half of the annual fee shall be paid, and if made during the fourth quarter, one-fourth of the annual fee shall be paid. Nothing in this section shall be construed as allowing quarterly renewals of registrations in order to avoid pay-ment of fees in advance for the entire year. Section 13. Payment of taxes upon registration. - No original registration of motor vehicles subject to payment of taxes, customs duties or other charges shall be accepted unless proof of payment of the taxes due thereon has been presented to the Commission. ARTICLE IIIRegistration Certifi-cates, Records, Number PlatesSection 14. Issuance of certificates of registration. - A properly numbered certificate of registration shall be issued for each separate motor vehicle after due inspection and payment of corresponding registration fees. Section 15. Use and au-thority of certificate of registration. (a) The said certificate shall be preserved and carried in the car by the owner as evidence of the reg-istration of the motor vehicle described therein, and shall be pre-sented with subsequent applications for re-registration, transfer of ownership, or recording of encumbrances: Provided, That in lieu of the certificate of registration a true copy or photostat thereof may be carried in the motor vehicle. (b) The certificate of registration issued under the provisions of this Act for any motor vehicle shall, while


the same is valid and effective and has not been suspended or re-voked, be the authority for the operation of such motor vehicle. (c) No motor vehicle shall be operated on the public highways in a man-ner which would place it under a classification requiring the payment of a larger registration fee than that stated in the certificate of regis-tration. Section 16. Suspension of registration certificate. - If on in-spection, as provided in paragraph (6) of Section four hereof, any motor vehicle is found to be unsightly, unsafe, overloaded, improp-erly marked or equipped, or otherwise unfit to be operated, or capa-ble of causing excessive damage to the highways, or not conforming to minimum standards and specifications, the Commissioner may refuse to register the said motor vehicle, or if already registered, may require the number plates thereof to be surrendered to him, and upon seventy-two hours notice to the owner of the motor vehicle, suspend such registration until the defects of the vehicle are corrected and/or the minimum standards and specifications fully complied with. Whenever it shall appear from the records of the Commission that during any twelve-month period more than three warnings for viola-tions of this Act have been given to the owner of a motor vehicle, or that the said owner has been convicted by a competent court more than once for violation of such laws, the Commissioner may, in his discretion, suspend the certificate of registration for a period not ex-ceeding ninety days and, thereupon, shall require the immediate sur-render of the number plates. Whenever a motor vehicle is found to be underweight the owner thereof shall pay the difference in the reg-istration fees corresponding to the shortage in weight plus a fifty per cent surcharge, and until such payment is made, the certificate of registration of the motor vehicle concerned shall be suspended by the Commissioner. After two such suspension, re-registration of the ve-hicle concerned for one year may be denied. The Commissioner shall notify the owner of the motor vehicle of any action taken by him un-


der this section. Section 17. Number plates, preparation, prepara-tion and issuance of . -(a) The Commissioner shall cause number plates to be prepared and issued to owners of motor vehicles and trailers registered under this Act, charging a fee of four pesos for each pair including the numerals indicating the year of registry: Pro-vided, however, That in case no number plates are available, the Commissioner or his deputies may issue, without charge, a written permit temporarily authorizing the operation of any motor vehicles with other means of identification: Provided, further, That all motor vehicles exempted from payment of registration fees, motor vehicles for hire, and privately-owned motor vehicles shall bear plates so de-signed and painted with different colors to distinguish one class from another: Provided, furthermore, That the plates of motor vehicles ex-empted from payment of registration fees shall be permanently as-signed to such motor vehicles during their entire lifetime while ex-empted from payment of the fees: And, provided, finally, That the owner thereof shall return such plates to the Land Transportation Commission within a period of seven working days after such owner has lost his exemption privilege or has transferred the vehicle to a non-exempt owner. (b) In case the design of the number plate is such that the numerals indicating the year of registry are on a detachable tag, the Commissioner or his deputies may, in their discretion, issue the said tag only for subsequent re-registration charging a fee of one peso for each tag issued. Section 18. Use of number plates. - At all times, every motor vehicle shall display in conspicuous places, one in front and one in the rear thereof, the said number plates. The num-ber plates shall be kept clean and cared for, and shall be firmly af-fixed to the motor vehicle in such a manner as will make it entirely visible and always legible. Except in the case of dealer's number plates which may be used successively on various motor vehicles in stock, no person shall transfer number plates from motor vehicle to


another. No dealer's number plate shall be used on any motor vehicle after said vehicle has been sold and delivered to a purchaser, and no dealer shall allow such dealer's number plates to be used on any mo-tor vehicle after its sale and delivery to a purchaser. CHAPTER II-IOPERATION OF MOTOR VEHICLEARTICLE ILicense to Drive Motor VehiclesSection 19. Duty to procure license. - Except as otherwise specifically provided in this Act, no person shall oper-ate any motor vehicle without first procuring a license to drive a mo-tor vehicle for the current year, nor while such license is delinquent, invalid, suspended or revoked. The license shall be carried by the driver at all times when operating a motor vehicle, and shall be shown and/or surrendered for cause and upon demand to any person with authority under this Act to confiscate the same.Section 20. Li-cense for enlisted men operating Government motor vehicles. - En-listed men operating a motor vehicle owned by the Government of the Philippines shall be licensed in accordance with the provisions of this Act, but no license or delinquency fees shall be collected there-from. All licenses so issued shall bear the words "For Government Vehicles Only" plainly marked or stamped in red ink across the face thereof. A license so marked or stamped shall authorize the holder thereof to operate a private-owned motor vehicle. Section 21. Oper-ation of motor vehicles by tourists. - Bona fide tourist and similar transients who are duly licensed to operate motor vehicles in their re-spective countries may be allowed to operate motor vehicles during but not after ninety days of their sojourn in the Philippines. If any ac-cident involving such tourist or transient occurs, which upon investi-gation by the Commissioner or his deputies indicates that the said tourist or transient is incompetent to operate motor vehicles, the Commissioner shall immediately inform the said tourist or transient in writing that he shall no longer be permitted to operate a motor ve-hicle. After ninety days, any tourist or transient desiring to operate


motor vehicles shall pay fees and obtain and carry a license as here-inafter provided. Section 22. Driver's license, fees, examination. - Every person who desires personally to operate any motor vehicle shall file an application to the Commissioner or his deputies for a li-cense to drive motor vehicles: Provided, however, That no person shall be issued a professional driver's license who is suffering from highly contagious diseases, such as, advanced tuberculosis, gonor-rhea, syphilis, and the like. Each such application except in the case of enlisted men operating government-owned vehicles, shall be ac-companied by a fee of five pesos, and shall contain such information respecting the applicant and his ability to operate motor vehicles, as may be required by the Commission. The Commissioner or his deputies shall also ascertain that the applicant's sight and hearing are normal, and may in their discretion, require a certificate to that ef-fect, signed by a reputable physician. An examination or demonstra-tion to show any applicant's ability to operate motor vehicles may also be required in the discretion of the Commissioner or his deputies. Section 23. Issuance of driver's license. - If, after such ex-amination, the Commissioner or his deputy believes that the appli-cant possesses the necessary qualifications and is proficient in the operation of motor vehicles, a license shall be issued to such appli-cant upon payment of five pesos, but prior to the issuance of said li-cense, the applicant shall furnish three copies of his recent photo-graph to be securely attached to the license, and two copies to be filed and kept as provided by this Act. All driver's licenses shall bear the signature and right-hand thumb print of the licensee. Section 24. Use of driver's license and badge. - Every license issued under the provisions of this Act to any driver shall entitle the holder thereof, while the same is valid and effective and not suspended or revoked, to operate the motor vehicles described in such license: Provided, however, That every licensed professional driver, before operating a


public service motor vehicle registered under classifications (d) to (j) inclusive of Section seven hereof, shall secure from the Commis-sioner, upon payment of the sum of one peso, a driver's badge which he shall, at all times while so operating a motor vehicle, display in plain sight on the band of his cap or on his coat or shirt. Such driver's badge shall be of metal with a plainly readable number assigned to the licensee stamped thereon. It shall be unlawful for any duly li-censed driver to transfer, lend or otherwise allow any person to use his license for the purpose of enabling such person to operate a mo-tor vehicle. No owner of a motor vehicle shall engage, employ, or hire any person to operate such motor vehicle, unless the person sought to be employed is a duly licensed professional driver. Section 25. Driver's records. - Any driver who changes his address shall, within fifteen days, notify the Commissioner in writing of his new address, name and address of his new employer, the number of the motor vehicle he is employed to operate, and such other information as the Commissioner may require. Section 26. Renewal of license. - Any license not renewed on or before the last working day of the month when the applicant was born shall become delinquent and in-valid, except when the license is surrendered to the Commissioner or his deputies before the last working day of the month of his birth in order to avoid payment of the delinquency fees. The fee for renewal of delinquent license shall be five pesos in addition to the basic fee as hereinabove prescribed. Every applicant for renewal of license to operate any motor vehicle shall present to the Commissioner, in per-son or by mail or messenger, the license issued to the applicant for the previous year, together with the proper fee of five pesos and, in the case of professional chauffeurs, three copies of a readily-recog-nized photograph of the applicant, which photograph shall have been taken not exceeding three years prior to the date of applicant for re-newal. Lost license. - In case the license for the previous year has


been lost or cannot be produced, the applicant shall obtain a dupli-cate in accord with Section eleven of this Act, on penalty of refusal, by the Commissioner or his deputies, to renew the license: Provided, however, That the Commissioner or his deputies may, in their discre-tion accept in lieu of the previous years license, the duly signed and sworn statement of an operator to the effect that he has not operated any motor vehicle in the Philippines during the year or years to which no license was issued in his name. The Commissioner and his deputies are hereby authorized to administer the oath in connection with such affidavit. Section 27. Suspension, revocation of driver's li-cense.(a) The Commissioner may suspend for a period not exceeding three months or, after hearing, revoke any driver's license issued un-der the provisions of this Act, and may order any such license to be delivered to him whenever he has reason to believe that the holder thereof is an improper person to operate motor vehicles, or in operat-ing or using a motor vehicle in, or as an accessory to, the commis-sion of any crime or act which endangers the public. Any deputy of the Commissioner may, for the same cause, suspend for a period not exceeding three months any driver's license issued under the provi-sions of this Act: Provided, That such suspension may be appealed to the Commissioner who may, after reviewing the case, confirm, re-verse or modify the action taken by such deputy. (b) Whenever dur-ing any twelve-month period a driver shall have been convicted at least three times for the violations of any provisions of this Act or of any regulation issued by the Commissioner or any municipal or city ordinance relating to motor vehicle traffic not in conflict with any of the provisions of this Act, the Commissioner may, in his discretion, revoke or suspend the license of such driver for a period not exceed-ing two years. (c) The license suspended or revoked under the provi-sions of subsections (a) and (b) of this section shall not be reinstated unless the driver has furnished a bond in accordance with Section


twenty-nine of this Act and only after the Commissioner has satisfied himself that such driver may again safely be permitted to operate a motor vehicle. (d) A decision of the Commissioner revoking or re-fusing the reinstatement of a license under the provisions of this Sec-tion may be appealed to the Secretary of Public Works and Commu-nications. Section 28. Driver's bond. - The Commissioner before re-instating any driver's license which has been suspended or revoked under the provisions of the preceding section or of any provisions of this Act, may require such driver to post a bond in the sum of one thousand pesos conditioned upon the satisfaction and payment of any claim which may be filed or of any execution which may be issued against such driver in any case wherein said driver may be held an-swerable while operating motor vehicles. The bond required in this section shall be in such form as to render sureties liable at least for a period of not less than one year nor more than three years: Provided, however, That upon written application to the Commissioner for re-lease from such a bond, the Commissioner may after revoking or suspending the driver's license, authorize the release of the bonds-men from further responsibility thereunder: Provided, further, That should the Commissioner decide not to revoke the license of a driver who has been convicted of homicide through reckless imprudence, or of the violation of the speed limit or of reckless driving at least three times within a twelve-month period, the said driver shall post a bond in the sum of not less than two thousand pesos, conditioned upon the payment of any claim which may be filed or any execution which may be issued against him in any case wherein said driver may be held answerable while operating motor vehicles. Section 29. Confis-cation of driver's licenses. - Law enforcement and peace officers duly designated by the Commissioner shall, in apprehending any driver for violations of this Act or of any regulations issued pursuant thereto, or of local traffic rules and regulations, confiscate the license


of the driver concerned and issue a receipt prescribed and issued by the Commission therefor which shall authorize the driver to operate a motor vehicle for a period not exceeding seventy-two hours from the time and date of issue of said receipt. The period so fixed in the re-ceipt shall not be extended, and shall become invalid thereafter. Fail-ure of the driver to settle his case within fifteen days from the date of apprehension will cause suspension and revocation of his license. Section 30. Student-driver's permit. - Upon proper application and the payment of three pesos, the Commissioner or his deputy may is-sue student-driver's permits, valid for six months to persons not un-der eighteen years of age, who desire to learn to operate motor vehi-cles. No application for driver's license shall be received unless the applicant has undergone instruction in the operation of motor vehi-cles for at least a month and has a valid student-driver's permit: Pro-vided, however, That any person who has a license to operate vehi-cles in other countries may, upon presentation of appropriate evi-dence of such license, be allowed to pay for a driver's license without presenting a student driver's permit. A student driver who fails in the examination shall continue as a student driver for at least one addi-tional month. No student driver shall operate a motor vehicle unless accompanied by a duly licensed driver. The licensed driver acting as instructor to the student driver shall likewise be responsible and li-able for any violation of the provisions of this Act and for any injury or damage done by the motor vehicle on account or as a result of its operation by a student under his direction. ARTICLE IIIllegal Use of Licenses, Number Plates, Etc.Section 31. Imitation and false representations. - No person shall make or use attempt to make or use a driver's license, badge, certificate of registration, number plate, tag, or permit in imitation or similitude of those issued under this Act, or intended to be used as or for a legal license, badge, certifi-cate, plate, tag or permit, or with intent to sell or otherwise dispose


of the same to another. No person shall falsely or fraudulently repre-sent as valid and in force any driver's license, badge, certificate, plate, tag or permit issued under this Act which is delinquent or which has been revoked or suspended. No person shall, knowingly and with intent to deceive, make one or more false or fraudulent statements in an application for the registration of vehicles, or for a driver's license. ARTICLE IIIPassenger and FreightSection 32. Exceeding registered capacity. - No person operating any vehicle shall allow more passenger or more freight or cargo in his vehicle than its registered carrying capacity. In the case of public utility trucks or buses, the conductor shall be exclusively liable for viola-tions of this section or of Section thirty-two, letter (c) hereof: Pro-vided, That the conductor, before being employed by any public ser-vice operator, shall get a permit or license from the Commission and pay five pesos annually for said license or permit issued in his favor, and the same is renewable on or before the last working day of the month of his birth, attaching a readily recognizable photograph and after presentation of a medical certificate of fitness of applicant. Pas-senger trucks may be allowed to construct any cargo carrying device at the rear or at the side of the truck, subject to the approval of the Commissioner: Provided, however, That the total weight of the de-vice, including the cargo, shall not exceed one hundred kilos. (b) Carrying of passengers and freight on top of vehicles. - No person operating a motor vehicle shall allow any passenger to ride on the cover or top of such vehicles: Provided, however, That subject to such conditions as may be contained in permits that may be issued by the Commissioner, baggage or freight may be carried on the top of a truck provided the weight thereof does not exceed twenty kilos per square meter and is distributed in such a manner as not to endan-ger the passengers or stability of the truck. (c) Riding on running boards. - No driver shall permit any person to ride on the running


board, step board, or mudguard of his motor vehicle for any purpose except to make repair or adjustment in the motor or to collect fares. Section 33. Passenger or freight capacity marked on vehicle. - All passengers automobiles for hire shall have the registered passenger capacity plainly and conspicuously marked on both sides thereof, in letters and numerals not less than five centimeters in height. All mo-tor trucks, whether for passenger or freight, private, or for hire, shall have the registered passenger gross and net weight capacities plainly and conspicuously marked on both sides thereof, in letters and nu-merals not less than five centimeters in height. ARTICLE IVAcces-sories of Motor VehiclesSection 34.(a) Tires of motor vehicles. - No motor vehicle with metallic tires shall be operated upon any pub-lic highway, and solid tires whenever used shall be of sufficient thickness to prevent the metal rims thereof from coming in direct contact with the road.(b) Brakes - Every motor vehicle with four or more wheels shall be provided with dual hydraulic brake system so that in case of hydraulic line failure affecting the braking efficiency of any of the four wheels at least either the front or rear wheels shall retain normal braking capabilities. In the absence of such dual brak-ing system every motor vehicle with four or more wheels shall be provided with safety valve devices of such design and make so that failure of the hydraulic braking system of the vehicle because of leakage in the line of other parts of the system will not affect all wheels but rather render at all times effective the braking power of either the two front wheels or the two rear wheels when brakes are applied. This requirement, however, does not apply to motor vehicles equipped with pneumatic braking system. (b-1) Horns. - Every motor vehicle shall be provided with a horn or signalling devise in good working order: Provided, however, That no horn or signalling device emitting an exceptionally loud, startling, or disagreeable sound shall be installed or used on any motor vehicle. All authorized emergency


vehicles, such as ambulance and police cars and fire wagons used for emergency calls shall be equipped with a bell, siren, or exhaust whis-tle of a type approved by the Commissioner, and no such device shall be installed or used in any other vehicle. No vehicle not classi-fied as a motor vehicle under this Act shall be equipped with a horn or signaling device similar to the horn customarily used on motor ve-hicles. (c) Headlights. - Every motor vehicle of more than one meter of projected width, while in use on any public highway shall bear two headlights, one on each side, with white or yellowish light visi-ble from the front, which, not later than one-half hour after sunset and until at least one-half four before sunrise and whenever weather conditions so require, shall both be lighted. Additional lamps and light may be carried, but no red lights shall be visible forward or ahead of the vehicle. Trucks, buses, trailers, and other similar vehi-cles must carry, while in use on any public highway during night-time, colored riding lights on each of the four corners not more than ten centimeters from the top. All motor vehicles shall be equipped with devices for varying the intensity of light, and the driver must dim the headlights or tilt the beams downward whenever the vehicle is being operated on well-lighted streets within the limits of cities, municipalities, and thickly populated barrios or districts, or when-ever such vehicle meets another vehicle on any public highway. (d) Taillights. - Every motor vehicle and trailer shall, during the above-mentioned hours, also bear on each side in the rear a lamp showing a red light visible at least one hundred meters from the rear of the ve-hicle and a lamp throwing a white light upon the number plate issued for such vehicle. (e) Stop lights. - Every motor vehicle shall be equipped at the rear with at least one lamp which shall throw a sus-tained bright red light visible under all conditions, even under bright sunlight, when the brakes are applied. Each bus, truck, trailer or sim-ilar vehicle shall be equipped, as its stop light at or near its rear cen-


ter, with a lamp at least twelve centimeters in diameter with the word "stop" inscribed in the center. (f) Motorcycle and other vehicle lights. - Every motor vehicle of less than one meter of projected width shall be subject to the preceding provisions of this section, ex-cept that one headlight and one taillight shall be required. No signal light shall be necessary. Additional lamps may be carried provided they comply with the preceding provisions of this section. Every mo-tor vehicle, or whatever style, kind, make, character, or nature, when upon a highway during the hours above-mentioned, whether in mo-tion or not, shall have one or more lights so arranged that the same shall be visible at least fifty meters from the front and the rear of such vehicle. (g) Lights when parked or disabled. - Appropriate park-ing lights or flares visible one hundred meters away shall be dis-played at a corner of the vehicle whenever such vehicle is parked on highways or in places that are not well-lighted or is placed in such manner as to endanger passing traffic. (h) Windshield wiper. - Every motor vehicle shall be equipped with a mechanically or electrically operated device for wiping off raindrops or other moisture from its front windshield. (i) Use of red flag. - Whenever the load of any ve-hicle extends more than one meter beyond the bed or body thereof, there shall be displayed at every projecting end of such load a red flag not less than thirty centimeters both in length and width, except that during the hours fixed under subsection (c), there shall be dis-played, in lieu of the required red flags, red lights visible at least fifty meters away. (j) Mufflers. - Every motor vehicle propelled by an in-ternal combustion engine shall be equipped with a muffler, and whenever said motor vehicle passes through a street of any city, mu-nicipality, or thickly populated district or barrio, the muffler shall not be cut out or disconnected. No motor vehicle shall be operated in such a manner as to cause it to emit or make any unnecessary or dis-agreeable odor, smoke or noise. CHAPTER IVTRAFFIC RULE-


SARTICLE ISpeed Limit and Keeping to the RightSection 35. Restriction as to speed. - (a) Any person driving a motor vehicle on a highway shall drive the same at a careful and prudent speed, not greater nor less than is reasonable and proper, having due regard for the traffic, the width of the highway, and of any other condition then and there existing; and no person shall drive any motor vehicle upon a highway at such a speed as to endanger the life, limb and property of any person, nor at a speed greater than will permit him to bring the vehicle to a stop within the assured clear distance ahead. (b) Sub-ject to the provisions of the preceding paragraph, the rate of speed of any motor vehicle shall not exceed the following:

MAXIMUM AL-LOWABLE

SPEEDS

PassengersCars and Motorcy-

cle

Motor trucks and buses

1. On open country roads, with no "blinds corners" not closely bordered by habitations.

80 km. per hour 50 km. per hour

2. On "through streets" or boule-vards, clear of traf-fic, with no " blind corners," when so designated.


3. On city and mu-nicipal streets, with light traffic, when



not designated "through streets".

4. Through crowded streets, approaching intersections at "blind corners," passing school zones, passing other vehicles which are stationery, or for similar dangerous circumstances.


(c) The rates of speed hereinabove prescribed shall not apply to the following: (1) A physician or his driver when the former re-sponds to emergency calls; (2) The driver of a hospital ambulance on the way to and from the place of accident or other emergency; (3) Any driver bringing a wounded or sick person for emergency treat-ment to a hospital, clinic, or any other similar place; (4) The driver of a motor vehicle belonging to the Armed Forces while in use for official purposes in times of riot, insurrection or invasion; (5) The driver of a vehicle, when he or his passengers are in pursuit of a criminal; (6) A law-enforcement officer who is trying to overtake a violator of traffic laws; and (7) The driver officially operating a mo-tor vehicle of any fire department, provided that exemption shall not be construed to allow unless or unnecessary fast driving of drivers aforementioned. Section 36. Speed limits uniform throughout the Philippines. - No provincial, city or municipal authority shall enact or enforce any ordinance or resolution specifying maximum allow-able speeds other than those provided in this Act. Section 37. Driv-ing on right side of highway. - Unless a different course of action is


required in the interest of the safety and the security of life, person or property, or because of unreasonable difficulty of operation in com-pliance herewith, every person operating a motor vehicle or an ani-mal-drawn vehicle on a highway shall pass to the right when meeting persons or vehicles coming toward him, and to the left when overtak-ing persons or vehicles going the same direction, and when turning to the left in going from one highway to another, every vehicle shall be conducted to the right of the center of the intersection of the high-way. Section 38. Classification of highways. - Public highways shall be properly classified for traffic purposes by the provincial board, municipal board or city council having jurisdiction over them, and said provincial board, municipal board or city council shall provide appropriate signs therefor, subject to the approval of the Commis-sioner. It shall be the duty of every provincial, city and municipal secretary to certify to the Commissioner the names, locations, and limits of all "through streets" designated as such by the provincial board, municipal board or council. ARTICLE IIOvertaking and Passing a Vehicle, and Turning at IntersectionsSection 39. Over-taking a vehicle. - The driver of any motor vehicle overtaking an-other vehicle proceeding in the same direction shall pass at a safe distance to the left thereof, and shall not again drive to the right side of the highway until safety clear of such overtaken vehicle except that on a highway, within a business or residential district, having two or more lanes for the movement of traffic in one direction, the driver of a vehicle may overtake and pass another vehicle on the right. Nothing in this section shall be construed to prohibit a driver overtaking and passing, upon the right, another vehicle which is making or about to make a left turn. Section 40. Driver to give way to overtaking vehicle. - The driver of a vehicle about to be overtaken and passed by another vehicle approaching from the rear shall give way to the overtaking vehicle on suitable and audible signal being


given by the driver of the overtaking vehicle, and shall not increase the speed of his vehicle until completely passed by the overtaking vehicle. Section 41. Restrictions on overtaking and passing.(a) The driver of a vehicle shall not drive to the left side of the center line of a highway in overtaking or passing another vehicle proceeding in the same direction, unless such left side is clearly visible, and is free of oncoming traffic for a sufficient distance ahead to permit such over-taking or passing to be made in safety. (b) The driver of a vehicle shall not overtake or pass another vehicle proceeding in the same di-rection, when approaching the crest of a grade, not upon a curve in the highway, where the driver's view along the highway is obstructed within a distance of five hundred feet ahead, except on a highway having two or more lanes for movement of traffic in one direction where the driver of a vehicle may overtake or pass another vehicle: Provided, That on a highway within a business or residential district, having two or more lanes for movement of traffic in one direction, the driver of a vehicle may overtake or pass another vehicle on the right. (c) The driver of a vehicle shall not overtake or pass any other vehicle proceeding in the same direction, at any railway grade cross-ing, not at any intersection of highways unless such intersection or crossing is controlled by traffic signal, or unless permitted to do so by a watchman or a peace officer, except on a highway having two or more lanes for movement of traffic in one direction where the driver of a vehicle may overtake or pass another vehicle on the right. Nothing in this section shall be construed to prohibit a driver over-taking or passing upon the right another vehicle which is making or about to make a left turn. (d) The driver of a vehicle shall not over-take or pass, or attempt to pass, any other vehicle, proceeding in the same direction, between any points indicated by the placing of offi-cial temporary warning or caution signs indicating that men are working on the highway. (e) The driver of a vehicle shall not over-


take or pass, or attempt to overtake or pass, any other vehicle pro-ceeding in the same direction in any "no-passing or overtaking zone." ARTICLE IIIRight of Way and SignalsSection 42. Right of way.(a) When two vehicles approach or enter an intersection at ap-proximately the same time, the driver of the vehicle on the left shall yield the right of way to the vehicle on the right, except as otherwise hereinafter provided. The driver of any vehicle traveling at an unlaw-ful speed shall forfeit any right of way which he might otherwise have hereunder. (b) The driver of a vehicle approaching but not hav-ing entered an intersection, shall yield the right of way to a vehicle within such intersection or turning therein to the left across the line of travel of such first-mentioned vehicle, provided the driver of the vehicle turning left has given a plainly visible signal of intention to turn as required in this Act. (c) The driver of any vehicle upon a highway within a business or residential district shall yield the right of way to a pedestrian crossing such highway within a crosswalk, ex-cept at intersections where the movement of traffic is being regulated by a peace officer or by traffic signal. Every pedestrian crossing a highway within a business or residential district, at any point other than a crosswalk shall yield the right of way to vehicles upon the highway. (d) The driver of a vehicle upon a highway shall bring to a full stop such vehicle before traversing any "through highway" or railroad crossing: Provided, That when it is apparent that no hazard exists, the vehicle may be slowed down to five miles per hour in-stead of bringing it to a full stop. Section 43. Exception to the right of way rule.(a) The driver of a vehicle entering a highway from a pri-vate road or drive shall yield the right of way to all vehicles ap-proaching on such highway. (b) The driver of a vehicle upon a high-way shall yield the right of way to police or fire department vehicles and ambulances when such vehicles are operated on official business and the drivers thereof sound audible signal of their approach. (c)


The driver of a vehicle entering a "through highway" or a "stop inter-section" shall yield the right of way to all vehicles approaching to ei-ther direction on such "through highway": Provided, That nothing in this subsection shall be construed as relieving the driver of any vehi-cle being operated on a "through highway" from the duty of driving with due regard for the safety of vehicles entering such "through highway" nor as protecting the said driver from the consequence of an arbitrary exercise off such right of way. Section 44. Signals on starting, stopping or turning. - (a) The driver of any vehicle upon a highway, before starting, stopping or turning from a direct line, shall first see that such movement can be made in safety, and if any pedes-trian may be affected by such movement, shall give a clearly audible signal by sounding the horn, and whenever the operation of any other vehicle approaching or following may be affected by such move-ment, shall give a signal plainly visible to the driver of such other ve-hicles of the intention to make such movement. (b) The signal herein required shall be given by means of extending the hand and arm be-yond the left side of the vehicle, or by an approved mechanical or electrical signal device.ARTICLE IVTurning and ParkingSection 45. Turning at intersections. - (a) The drive of a vehicle intending to run to the right at an intersection shall approach such intersection in the lane for traffic nearest to the right-hand side of the highway and, in turning, shall keep as close as possible to the right-hand curb or edge of the highway. (b) The driver of a vehicle intending to turn to the left shall approach such intersection in the lane for traffic to the right of and nearest to the center line of the highway, and, in turning, shall pass to the left of the center of the intersection, except that, upon highways laned for traffic and upon one-way highways, a left turn shall be made from the left lane of traffic in the direction in which the vehicle is proceeding. (c) For the purpose of this section, the center of the intersection shall mean the meeting point of the me-


dial lines of the highways intersecting one another, except when it is occupied by a monument, grass plot or any permanent structure, other than traffic control device. Section 46. Parking prohibited in specified places. - No driver shall park a vehicle, or permit it to stand, whether attended or unattended, upon a highway in any of the following places: (a) Within an intersection (b) On a crosswalk (c) Within six meters of the intersection of curb lines. (d) Within four meters of the driveway entrance to and fire station. (e) Within four meters of fire hydrant (f) In front of a private driveway (g) On the roadway side of any vehicle stopped or parked at the curb or edge of the highway (h) At any place where official signs have been erected prohibiting parking. Section 47. Parked vehicle. - Whenever a motor vehicle is parked unattended on any highway, the driver thereof must turn off the ignition switch and stop the motor and notch effectively the hand brake. ARTICLE VMiscellaneous Traffic RulesSection 48. Reckless driving. - No person shall operate a motor vehicle on any highway recklessly or without reasonable caution considering the width, traffic, grades, crossing, curvatures, visibility and other conditions of the highway and the conditions of the atmosphere and weather, or so as to endanger the property or the safety or rights of any person or so as to cause excessive or unreasonable damage to the highway. Section 49. Right of way for police and other emergency vehicles. - Upon the approach of any police or fire department vehi-cle, or of an ambulance giving audible signal, the driver of every other vehicle shall immediately drive the same to a position as near as possible and parallel to the right-hand edge or curb of the high-way, clear of any intersection of highways, and shall stop and remain in such position, unless otherwise directed by a peace officer, until such vehicle shall have passed. Section 50. Tampering with vehicles. - No unauthorized person shall sound the horn, handle the levers or set in motion or in any way tamper with a damage or deface any mo-


tor vehicle. Section 51. Hitching to a vehicle. - No person shall hang on to, ride on, the outside or the rear end of any vehicle, and no per-son on a bicycle, roller skate or other similar device, shall hold fast to or hitch on to any moving vehicle, and no driver shall knowingly permit any person to hang on to or ride, the outside or rear end of his vehicle or allow any person on a bicycle, roller skate or other similar device to hold fast or hitch to his vehicle. Section 52. Driving or parking on sidewalk. - No person shall drive or park a motor vehicle upon or along any sidewalk, path or alley not intended for vehicular traffic or parking. Section 53. Driving while under the influence of liquor or narcotic drug. - No person shall drive a motor vehicle while under the influence of liquor or narcotic drug. Section 54. Ob-struction of traffic. - No person shall drive his motor vehicle in such a manner as to obstruct or impede the passage of any vehicle, nor, while discharging or taking on passengers or loading or unloading freight, obstruct the free passage of other vehicles on the highway. Section 55. Duty of driver in case of accident. - In the event that any accident should occur as a result of the operation of a motor vehicle upon a highway, the driver present, shall show his driver's license, give his true name and address and also the true name and address of the owner of the motor vehicle. No driver of a motor vehicle con-cerned in a vehicular accident shall leave the scene of the accident without aiding the victim, except under any of the following circum-stances: 1. If he is in imminent danger of being seriously harmed by any person or persons by reason of the accident; 2. If he reports the accident to the nearest officer of the law; or 3. If he has to summon a physician or nurse to aid the victim. CHAPTER VPENAL AND OTHER PROVISIONSARTICLE IPenaltiesSection 56. Penalty for violation. - The following penalties shall be imposed for viola-tions of this Act: (a) For registering later than seven days after ac-quiring title to an unregistered motor vehicle or after conversion of a


registered motor vehicle requiring larger registration fee than that for which it was originally registered, or for renewal of a delinquent reg-istration, the penalty shall be a fine fifty per cent of the registration fees corresponding to the portion of the year for which the vehicle is registered for use. (b) For failure to sign driver's license or to carry same while driving, twenty pesos fine. (c) Driving a vehicle with a delinquent or invalid driver's license, fifty pesos fine.(d) Driving a motor vehicle with delinquent, suspended or invalid registration, or without registration or without the proper license plate for the current year, three hundred pesos fine. (e) Driving a motor vehicle without first securing a driver's license, three hundred pesos fine. (f) Driving a motor vehicle while under the influence of liquor or narcotic drug, a fine of not less than two hundred pesos nor more than five hundred pesos, or imprisonment of not more than three months, or both, at the discretion of the Court. (g) Violation of Section thirty-two, thirty-four (a), (b) and (b-1), thirty-five and forty-six a fine not exceeding one hundred pesos: Provided, however, That in the case of violation of Section 34 (b) the vehicle or vehicles affected may not be allowed to operate unless the requirements provided in this section are com-plied with. (h) Violations of Sections forty-nine, fifty and fifty-two, a fine not exceeding fifty pesos. (i) For making, using or attempting to make or use a driver's license, badge, certificate or registration, num-ber plate, tag or permit in imitation or similitude of those issued un-der this Act, or intended to be used as or for a legal license, badge, certificate, plate, tag or permit or with intent to sell or otherwise dis-pose of the same to another, or false or fraudulently represent as valid and in force any driver's license, badge, certificate, plate, tag or permit issued under this Act which is delinquent or which has been suspended or revoked, a fine of not exceeding three hundred pesos. (j) For using private passenger automobiles, private trucks, private motorcycles, and motor wheel attachments for hire, in violation of


Section seven, subsections (a), (b), and (c), of this Act, a fine of two hundred pesos and suspension of driver's license for a period of three months for the first conviction; a fine of three hundred pesos and six months imprisonment for the second conviction; and an imprison-ment of one year and permanent revocation of the driver's license for the third conviction. (k) For permitting, allowing, consenting to, or tolerating the use of a privately-owned motor vehicle for hire in vio-lation of Section seven, subsections (a), (b), and (c), of this Act, there shall be imposed upon the owner of the vehicle a fine of five hundred pesos and the certificate of registration shall be suspended for a period of three months for the first conviction, and an increase of one hundred pesos in the fine and one month's suspension of the registration for each subsequent conviction.(l) For violation of any provisions of this Act or regulations promulgated pursuant hereto, not hereinbefore specifically punished, a fine of not less than ten or more than fifty pesos shall be imposed. (m) In the event an offender cannot pay any fine imposed pursuant to the provisions of this Act, he shall be made to undergo subsidiary imprisonment as provided for in the Revised Penal Code. (n) If, as the result of negligence or reck-less or unreasonable fast driving, any accident occurs resulting in death or injury of any person, the motor vehicle operator at fault shall, upon conviction, be punished under the provisions of the Re-vised Penal Code. Section 57. Punishment for other offenses. - The conviction of any person for any offense under this Act shall not bar his prosecution for any other offense which may have been commit-ted by such person concurrently with the commission of the offense of which he was convicted or in doing the act or series of acts which constituted the offense of which he was convicted. Section 58. Duty of clerks of court. - It is hereby made the duty of clerks of the Court of First Instance, the City Court of Municipal Court trying traffic vi-olation cases to certify to the Commission the result of any case,


whether criminal or civil, involving violations of any provision of this Act or of other laws and ordinances relating to motor vehicles. Said certificate shall specifically contain the name of the driver or owner of the vehicle involved, his address, the number of his license and/or of the certificate or registration of his vehicle, and the date thereof, and the offense of which he was convicted or acquitted. AR-TICLE IICollection of Fees, Taxes and Fines, Liens, Allotment of FundsSection 59. (a) Collection of fees; national and local taxes; toll fees. - The collection of all fees, taxes, and fines, under the pro-visions of this Act shall be made in accordance with regulations to be prescribed by the Commissioner and approved jointly by the Auditor General. (b) No taxes or fees other than those prescribed in this Act shall be imposed for the registration or operation or on the ownership of any motor vehicle, or for the exercise of the profession of chauf-feur, by any municipal corporation, the provisions of any city charter to the contrary notwithstanding: Provided, however, That any pro-vincial board, city or municipal council or board or other competent authority may enact and collect such reasonable and equitable toll fees for the use of such bridges and ferries, within their respective ju-risdiction, as may be authorized and approved by the Secretary of Public Works and Communications, and also for the use of such pub-lic roads, as may be authorized by the President of the Philippines upon recommendation of the Secretary of Public Works and Com-munications, but in none of these cases shall any toll fees be charged or collected until and unless the approved schedule of tolls has been posted legibly in a conspicuous place at such toll station. Section 60. The lien upon motor vehicles. - Any balance of fees for registration, re-registration or delinquent registration of a motor vehicle, remain-ing unpaid and all fines imposed upon any vehicle owner, shall con-stitute a first lien upon the motor vehicle concerned. The Commis-sion is hereby vested with authority to issue a warrant of constructive


or actual distraint or and levy to any owner of motor vehicle who has any balance of fees for registration, re-registration or delinquent reg-istration of a motor vehicle remaining unpaid, which upon demand by the Commissioner of the Land Transportation Commission or any of his deputies executing such warrant, the owner of the said vehicle shall surrender same at the time demanded, except when the attach-ment or execution is under any judicial process. Any owner who fails or refuses to surrender any of such property or vehicle not so surren-dered shall be punished by a fine not exceeding the amount of the fees (including penalties and interests, if any) for the collection of which such warrant has been issued, together with the costs and in-terests, if any, from the time of such surrender. In addition, such owner shall punished by a fine of not more than three hundred pesos or an imprisonment not more than six months, or both. Section 61. Disposal of monies collected. - Monies collected under the provi-sions of this Act shall be deposited in a special trust account in the National Treasury to constitute the Highway Special Fund, which shall be apportioned and expended in accordance with the provisions of the "Philippine Highway Act of 1953": Provided, however, That the amount necessary to maintain and equip the Land Transportation Commission but not to exceed fifteen per cent of the total collections during any one year, shall be set aside for the purpose. ARTICLE IIIFinal ProvisionsSection 62. No provincial board, city or munici-pal board or council shall enact or enforce any ordinance or resolu-tion in conflict with the provisions of this Act, or prohibiting any deputy or agent of the Commission to enforce this Act within their respective territorial jurisdiction and the provisions of any charter to the contrary notwithstanding.Section 63. Repeal of laws and ordi-nances. - Act Numbered Thirty-nine hundred ninety-two, as amended, and all laws, executive orders, ordinances, resolutions, regulations, or parts thereof in conflict with the provisions of this Act


are repealed: Provided, however, That nothing contained in this Act shall be construed as limiting or superseding any provisions of the Public Service Act, as amended, with respect to the control by the Public Service Commission of motor vehicles operating as public service, nor shall any provision of this Act be construed as limiting or abridging the powers conferred upon and exercised by the Public Service Commission with regards to the control and supervision of the operation of such motor vehicles as public service.Section 64. Appropriation. - To carry out effectively the provisions of this Act, the amount of two hundred fifty thousand pesos is hereby appropri-ated out of the fees collected under this Act, in addition to the appro-priations provided in the General Appropriations Act, for the ex-pense of this Commission for the fiscal year beginning July first, nineteen hundred and sixty-four, to June thirtieth, nineteen hundred and sixty-five: Provided, however, That any savings in the appropri-ations of the Motor Vehicles Office for the fiscal year beginning July first, nineteen hundred and sixty-three, to June thirtieth, nineteen hundred and sixty-four shall likewise be available for this purpose. Section 65. Separability. - If any provisions of this Act or the appli-cation thereof to any person or circumstance is held invalid, the re-mainder of the Act, and the application of such provision to other persons or circumstances, shall not be affected thereby. Section 66. Effectivity. - This Act shall take effect upon its approval. Approved: June 20, 1964.REPUBLIC ACT NO. 6106

AN ACT AMENDING REPUBLIC ACT NUMBERED ONE THOUSAND FOUR HUNDRED SEVEN, AS AMENDED, TO PRESCRIBE THE RULES FOR FINANCING THE ACQUISI-TION OR CONSTRUCTION OF VESSELS TO BE USED FOR OVERSEAS SHIPPING, TO ALLOW THE CREATION OF A MARITIME LIEN THEREON, AND FOR OTHER PURPOSES


Section 1. Republic Act Numbered One thousand four hundred seven, as amended, is hereby further amended to include a new provi-sion known as Section 11 ½, which shall read as follows:

"Sec. 11 ½. a. Any citizen of the Philippines, or any association or corporation organized under the laws of the Philippines, at least seventy-five per cent of the capital of which is owned by citizens of the Philippines, engaged or which shall engage exclusively in the overseas shipping business, may, for the purpose of financing the construction, acquisition or purchase of vessels for use in overseas shipping, freely constitute a mortgage or any other lien or encum-brance on such vessels and its equipment with any bank or other fi-nancial institutions, domestic or foreign.

"b. The instrument of mortgage, lien or encumbrance shall be recorded in the registry of vessels in the order of their reception and shall show:

1. The name of the vessels;2. The name of the parties;3. The time and date of reception of the in-

strument;4. The interest in the vessel transferred or af-

fected; and5. The amount and date of maturity of any

mortgage.A copy of the instrument of mortgage shall be furnished the

Central Bank of the Philippines."c. Any mortgage, lien or encumbrance constituted in accordance

with this Act is a preferred mortgage and shall constitute a maritime lien upon the mortgaged vessel in the amount of the outstanding mortgage indebtedness secured by such vessel.

"d. A preferred mortgage shall have priority over all claims


against the vessel, except the following preferences in the order stated:

1. Judicial costs of the proceedings;2. Taxes due the Philippine Government;3. Salaries and wages of the Captain and Crew of the

vessel during its last voyage;4. General average or salvage including contract salvage;

bottomry loans; and indemnity due shippers for the value of goods transported but which were not delivered to the consignee;

5. Costs of repair and equipment of the vessel, and provi-sioning of food, supplies and fuel during the last voyage; and

6. Preferred mortgages registered prior in time."e. The lien of a preferred mortgage may be enforced by suit in

term or otherwise in the Philippines, or in any foreign country in which the vessel shall be found pursuant to the procedure of said country for the enforcement of ship mortgages constituting maritime liens on vessels documented under the laws of said country.

"f. After the bill of judicial sale at public auction has been exe-cuted, all claims against the vessel in favor of the creditors shall be considered extinguished, and such claim shall thereafter attach, in like amount and in accordance with their respective priorities to the proceeds of the sale.if the proceeds of the judicial sale should not be sufficient to pay all the creditors included in one number or grade, the residue shall be divided among them pro rata. All credits not paid, whether fully or partially, shall subsist as ordinary credits enforceable by personal action against the debtor. The record of the judicial sale shall be inscribed in the registry of vessels."

Sec. 2. The provisions of Commonwealth Act Numbered Six hun-dred six, as amended by Republic Act Numbered Nine hundred thir-teen; the Code of Commerce, particularly Articles 580 and 584


thereof; and all other Acts, Executive Orders and regulations incon-sistent herewith are hereby repealed or modified accordingly.

Sec. 3. This Act shall take effect upon its approval.

Approved: August 4, 1969.REPUBLIC ACT NO. 6374AN ACT AMENDING REPUBLIC ACT NUMBERED FORTY-ONE HUNDRED THIRTY-SIX,

KNOWN AS THE "LAND TRANSPORTATION AND TRAF-FIC CODE"Section 1. Paragraph (a) and (c) of Section four of Re-public Act Numbered Forty one hundred thirty-six, otherwise known as the Land Transportation and Traffic Code, are hereby amended to read as follows:"Sec. 4. (a) There is created under the Department of Public Works and Communications an office which shall be desig-

nated and known as the Land Transportation Commission, composed of one Commissioner and one Deputy Commissioner, who shall be vested with the powers and duties hereafter specified. Whenever the word "Commission" is used in this Act, it shall be deemed to mean

the Land Transportation Commission, and whenever the word "Com-missioner" is used in this Act, it shall be taken to mean the Commis-sioner or Deputy Commissioner, as the case may be."(c) The Com-missioner shall receive an annual compensation of twenty thousand five hundred eighty pesos and the Deputy Commissioner, an annual compensation of eighteen thousand six hundred thirty-six pesos. The Commissioner shall be assisted by one head executive assistant (MV regulation adviser or chief), one administrative officer, one registra-

tion regulation chief, one inspection, examination and licensing regu-lation chief, one law and traffic enforcement regulation chief, one

provincial regulation chief, one utility and property regulation chief, one accounting officer, one internal chief auditor, one personnel offi-

cer III, one budget officer IV, and one chief medical division IV,


who shall receive an annual compensation of fifteen thousand two hundred sixty-four pesos each; ten land transportation regional direc-tors who shall receive an annual compensation of fourteen thousand five hundred thirty-two pesos each; ten transportation assistant re-

gional directors, who shall receive an annual compensation of eleven thousand three hundred twenty-eight pesos each; and ten land trans-

portation assistant regulation chiefs, who shall receive an annual compensation of thirteen thousand one hundred fifty-two pesos each; provided, that the assistant chiefs of divisions shall receive an annual compensation of twelve thousand five hundred sixteen pesos each; the chiefs of sections, district supervisors, and land transportation registrars III shall receive an annual compensation of ten thousand two hundred sixty pesos each; the assistant district supervisors and

land transportation registrars II shall receive an annual compensation of eight thousand eight hundred thirty-two pesos each; the land trans-portation registrars I shall receive an annual compensation of seven thousand six hundred eight pesos each; and all other employees in

the land transportation commission whose salaries are paid monthly shall receive an increase in an amount equivalent to eight WAPCO ranges each, but in no case shall an employee exceed the salary of his immediate superior."Sec. 2. Section Sixty-one of Republic Act Numbered Forty-one hundred thirty-six, is hereby amended to read as follows: "Sec. 61. Disposal of Monies Collected. — Monies col-lected under the provisions of this Act shall be deposited in a special trust account in the National Treasury to constitute the Highway Spe-

cial Fund, which shall be apportioned and expended in accordance with the provisions of the "Philippine Highway Act of 1953"; pro-

vided, however, that the amount necessary to maintain and equip the Land Transportation Commission but not to exceed twenty per cent of the total collecting during any one year, shall be set aside for the purpose."Sec. 3. In order to carry out the provisions of this Act the


payment of salary differentials resulting from the adjustment in salaries as provided for in this Act shall be implemented from the amount that may be taken out of the twenty per cent of the collec-

tions of the Land Transportation Commission necessary to maintain and equip it from the fiscal year 1970-71. Thereafter, so much

amount as will be needed to carry out the purpose of this Act shall be included in the annual appropriation of the Land Transportation

Commission.Sec. 4. The incumbents of the positions at the time of the approval of this Act whose salaries are herein standardized shall automatically be entitled to the benefits hereof without the need of another appointment.Approved: August 16, 1971.PRESIDENTIAL DE-

CREE No. 98REGULATING THE ISSUANCE OF LICENSE PLATES OF ALL MO-TOR VEHICLESTo promote traffic safety at night for the welfare of the

public and in order to further aid the campaign against night crimes and lawlessness, I, FERDINAND E. MARCOS, President of the Philippines, by

virtue of the powers vested in me by the Constitution as Commander-in-Chief of all the Armed Forces of the Philippines, and pursuant to Procla-

mation No. 1081 dated September 21, 1972 and General Order No. 1 dated September 22, 1972, as amended, do hereby order and decree: Sec-

tion 1. The Bureau of Land Transportation shall cause reflective number plates to be prepared and issued to owners of motor vehicles and trailers registered under R.A. 4136, charging for each pair, including the numerals indicating the year of registry, a fee of not more than 15% higher than the acquisition cost. Section 2. All motor vehicles exempted from payment of registration fees, motor vehicles for hire and privately-owned motor vehi-cles shall bear plates so designed and reflectorized with different colors as

to distinguished one class from another. Section 3. No two license plate numbers bearing the same numerals shall be issued to any motor vehicles regardless of the place of issue or the type, kind or ownership of the mo-tor vehicle. Section 4. Republic Act No. 4136 is hereby amended accord-

ingly and Republic Act No. 5715 is hereby repealed. Section 5. This Decree shall take effect immediately. Done in the City of Manila, this 15th day of


January, in the year of Our Lord, nineteen hundred and seventy-three.PRESIDENTIAL DECREE No. 109MODIFYING PRESIDENTIAL DECREE NO. 98I, FERDINAND E. MARCOS, President of the Philippines by virtue of the powers vested in me by the Constitution as Commander-in-Chief of all

the Armed Forces of the Philippines, and pursuant to Proclamation No. 1081 dated September 21, 1972 and General Order No. 1 dated Septem-ber 22, 1972, as amended do hereby order and decree:Section 1. Section

1 of the Presidential Decree No. 98 is hereby modified to read as fol-lows:“Section 1. Effective January 1, 1974, the Land Transportation Com-mission shall cause reflective number plates to be prepared and issued to owners of motor vehicles and trailers registered under R.A. 4136, charging for each pair, including the numericals indicating the year of registry, a fee of not more than 15% higher than the acquisition cost.”Section 2. Section 4 of Presidential Decree No. 98 shall read as follows:“Section 4 Republic Act No. 4136 is hereby amended accordingly and Republic Act No. 5715 hereby repealed, effective January 1, 1974.”Done in the City of Manila, this 25th day of January, in the year of Our Lord, nineteen hundred and seventy-three.PRESIDENTIAL DECREE No. 760ALLOWING

THE TEMPORARY REGISTRATION OF FOREIGN-OWNED VESSELS UNDER TIME CHARTER OR LEASE TO PHILIP-PINE NATIONALS FOR USE IN THE PHILIPPINE COAST-

WISE TRADE SUBJECT TO CERTAIN CONDITION-SWHEREAS, in the interest of the national economy, it is imperative that Philippine domestic shipping be expanded to meet the ever-in-

creasing inter-island cargo and passenger traffic; WHEREAS, due to the heavy capital requirements of the shipping industry, local ship owners and operators cannot raise sufficient financial resources to acquire new tonnage to replace their uneconomic and over aged

fleet; and WHEREAS, in order to alleviate the present plight of do-mestic shipping, it is necessary to temporarily relax certain aspects of the restrictive and constrictive legal framework under which ves-sels may be registered in the Philippines; NOW, THEREFORE, I,


FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers in me vested by the Constitution, do hereby order and decree the following as part of the law of the land:Section 1. Any

provision of law, decree, executive order, or rules and regulations to the contrary notwithstanding, any foreign-owned vessel under time

charter or lease to a Philippine national, as the term is defined in Sec-tion 3 of Presidential Decree No. 474, may be issued a temporary

certificate of Philippine registry by the Maritime Industry Authority: Provided, That the said Charter or lease (1) has had the prior written approval of the Maritime Industry Authority, (2) shall be valid and

effective for a period of not less than five years, and (3) shall be used exclusively in the coastwise trade in the Philippines: Provided, fur-

ther, That the operation of the vessel shall be entirely in the hands of Philippine nationals and free from any participation or interference from the alien owner, except insofar as such action shall be to di-

rectly protect his rights as owner thereof: Provided, finally, That the registered vessel shall be manned completely by a Filipino crew, ex-cept in the case of specialized fishing vessel.The effectivity of any

charter or lease contract entered into pursuant to this Decree shall not extend beyond the year 1990, unless otherwise extended by the Pres-ident of the Republic of the Philippines.Section 2. Any vessel issued a temporary certificate of Philippine registry as provided for in the section immediately preceding shall be entitled to all the rights and privileges of a vessel of a Philippine registry, as well as the protec-

tion of Philippine law so long as its temporary certificate of registra-tion is valid and subsisting. Correspondingly, the vessel shall also be subject to all requirements, limitations and all the duties and obliga-

tions imposed upon vessels of Philippine registry. Section 3. The Maritime Industry Authority shall promulgate the rules and regula-

tions, together with the procedures and guidelines, for the implemen-tation of this Decree, subject to approval by the Office of the Presi-


dent.Section 4. Any provision of law, decree, executive order, or rules and regulations inconsistent with this Decree is hereby re-

pealed, amended or modified accordingly. Section 5. This Decree shall take effect immediately.Done in the City of Manila, this 31st day of July, in the year of Our Lord, nineteen hundred and seventy-

five.PRESIDENTIAL DECREE NO. 761AMENDING SEC-TION EIGHT HUNDRED SIXTY OF THE TARIFF AND CUS-TOMS CODE OF THE PHILIPPINES, AS AMENDED, BY AL-

LOWING THE REGISTRATION OF VESSELS THE OWN-ERSHIP OF WHICH IS VESTED IN CORPORATIONS OR ASSOCIATIONS, AT LEAST SIXTY PERCENT OF THE

CAPITAL STOCK OR CAPITAL OF WHICH BELONG TO CITIZENS OF THE PHILIPPINES, AND FOR OTHER PUR-

POSESSection 1. Section 806 of the Tariff and Customs Code of the Philippines, as amended, is hereby amended to read as follows:“Sec. 806. Certificate of Philippine Registry. Upon registration of a vessel of domestic ownership, and of more than fifteen tons gross, a certifi-cate of Philippine registry shall be issued for it. If the vessel is of do-mestic ownership, and of fifteen tons gross or less, the taking of the certificate of Philippine registry shall be optional with the owner.

"Domestic ownership, as used in this section means ownership vested in citizens of the Philippines or corporations or associations

organized under the laws of the Philippines at least sixty per centum of the capital stock or capital of which is wholly owned by citizens of the Philippines, and, in the case of corporations or associations

which will engage in coastwise trade the president or managing di-rectors thereof shall be such citizens: Provided, That the members of the crew of the vessel, except specialized fishing vessels, shall all be citizens of the Philippines, Provided, That the certificate of Philip-pine registry issued to a vessel prior to the approval of this Code

shall not be affected; Provided, further, That any vessel of more than


fifteen gross tons which on February eight, nineteen hundred and eighteen, had a certificate of Philippine registry under existing law,

shall likewise be, deemed a vessel of domestic ownership if there has been no change in its ownership or if the capital of the association or

capital stock of the corporation owning such vessel has not been transferred to persons who are not citizens of the Philippines and if any such vessels should have been totally lost through shipwreck,

collision or any other marine disaster while being lawfully operated, it may be replaced with another vessel of the same or lesser tonnage by the same person, association or corporation owning and operating

same by virtue of this section, under such terms and conditions as may be prescribed by the Maritime Industry Authority consistent

with public policy and with the view of its utility for government ser-vice in case of war or any public emergency: Provided, further, That the controlling interest of the association or corporation shall not be considered as held by the citizen of the Philippines; (a) if less than

sixty percent of the capital or capital stock is held by such citizens or such capital or capital stock is subject to any trust or fiduciary obli-gation in favor of any person not a citizen of the Philippines; (b) if less than sixty percent of the capital or capital stock in said associa-tion or corporation entitled to vote is in the hands of citizens of the Philippines; (c) if by means of (a) any contract or agreement, more

than forty percent of the capital or capital stock can be voted directly or indirectly in favor of any person not a citizen of the Philippines:

or (d) if by other means, the control of more than forty percent of the capital or capital stock of the association or corporation is conferred upon or allowed to be exercised by any person not a citizen of the Philippines."Section 2. The above definition of "domestic owner-

ship" notwithstanding, an enterprise duly registered with the Board of Investments, under R.A. 5186 or 6135, whether or not entirely

owned by foreign nationals, may register its own vessels under the


provision of the section immediately preceding if such vessels are to be used exclusively to transport its own raw materials and finished products in Philippine waters as an incident to its manufacturing,

processing or business activity registered with the Board of Invest-ments and certified to by said Board as an essential element in the operation of the registered project.Section 3. Any provision of the

law, decree, executive order, or rules and regulations to the contrary notwithstanding, the Maritime Industry Authority is hereby vested

with the exclusive authority over the registration and documentation of Philippine vessels, as well as the issuance of all certificates, li-

censes or other documents necessary or incident to such registration and documentation.Section 4. The Maritime Industry Authority shall be subject to approval by the Office of the President, issue such rules and regulations implementing the provisions of this decree.Section 5. All laws, decrees, executive orders, or rules and regulations, or parts thereof, inconsistent with this Decree are hereby repealed or modi-

fied accordingly.Section 6. This Decree shall take effect immediate-ly.Approved. July 31, 1975.PRESIDENTIAL DECREE No. 843AMENDING

REPUBLIC ACT NO. 4136, AS AMENDED, OTHERWISE KNOWN AS THE LAND TRANSPORTATION AND TRAFFIC CODE BY INCREASING THE AN-NUAL REGISTRATION FEE ON PRIVATE AUTOMOBILES AND IMPOSING

AN AD VALOREM TAX THEREON, AND FOR OTHER PURPOSESWHEREAS, as a result of the increase in the price of oil, the cost of petroleum imports

has risen from P2.2 billion in 1972 to P7.2 billion in 1974, thus adversely affecting the country's balance of payments position; WHEREAS, there is need to discourage uneconomic consumption of fuel;WHEREAS, there is

also need for additional revenue to support economic development.NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby order

and decree the following: Section 1. Section 8 of Republic Act No. 4136, as amended is hereby amended to read as follows:"Sec. 8. Schedule of Regis-tration Fees. Except as otherwise specifically provided in this Act, each ap-


plication for the registration of motor vehicles shall be subject to an an-nual registration fee in accordance with the following schedule:(a) Private

automobiles, with the exception of sports cars, with pneumatic rubber tires, an amount based on their respective shipping weight or factory

weight as indicated in the following schedule:

1000 Kilos or less P110.00

1001 to 1,500 Kilos 200.00

1501 to 2,000 Kilos 385.00

2001 Kilos and above 630.00

The factory or shipping weight of a private automobile shall be obtained from the red Book edited by the National Market Report, Inc., of the United States of America: Provided further, That in the case of automobiles with altered, changed or rebuilt bodies, the weight as obtained by actual weighing shall be considered the vehi-cle weight: Provided, furthermore, That the increased registration fees herein prescribed shall not apply to cars, jeeps and jeepneys for hire and those falling under special "S" classifications, for which the fees shall be those prescribed before the approval of this Decree.In the case of sports cars, regardless of weight, the registration fee shall be One Thousand Pesos (P1,000.00). For the purpose, "sports car" refers to a high-powered vehicle, usually a two-seater, especially manufactured for speed. In the case of private jeeps and jeepneys not for hire the annual registration fee, regardless of the weight of the vehicle, shall be P110.00.The registered passenger capacity of pas-senger automobiles operated for hire or for private use shall be deter-mined as follows:1. For each adult passenger, a horizontal rectangu-lar area, including seat and feet space, not less than thirty-five cen-timeters wide and sixty centimeters long, except in the front seat, which shall allow an area fifty centimeters wide for the operator.2.


For each half passenger, a horizontal rectangular area, including seat and feet space, not less than seventeen and a half centimeters wide by sixty centimeters long, provided that each continuous row of seats shall not be allowed to have more than one-half passenger.(b) Private motor trucks, passenger buses and trailers with pneumatic rubber tires, the sum of five pesos for every hundred kilograms of maximum allowable gross weight or fraction thereof. (c) Private motor trucks, passenger buses and trailers with solid rubber tires or with part-solid and part-pneumatic rubber tires, the sum of seven pesos for every hundred kilograms of maximum allowable gross weight or fraction thereof.(d) Private motorcycles and scooters of two or three wheels and bicycles with motor attachments, the sum of thirty pesos.(e) The fee for registration of motor vehicles for hire shall be sixty per cent more than the fee prescribed for private motor vehicles of the same category.(f) The fee for registration of diesel-oil-consuming vehicles shall be fifty per cent more than that of vehicles using motor fuel other than diesel oil. The fee for registration of motor vehicles for hire shall be sixty per cent more than the fees prescribed for private motor vehicles.(g) No regular registration fees shall be charged for the general registration of motor vehicles contemplated under the dealer's classification: Provided, That the Commissioner of Land Transportation shall provide appropriate dealer's number plates cor-responding to the classification of vehicles hereinbelow described, and registration fee for every set of such dealer's number plates shall be in accordance with the following schedule of rates:Two hundred pesos for each truck or trailer; One hundred pesos for each passenger automobile; and Twenty pesos for each motorcycle and the like. (h) Registration under the "Government Motor Vehicle" classification shall be free of charge, upon request of the chief of bureau or office concerned.(i) Motor vehicles not intended to be operated or used upon any public highway, or which are operated on highways not


constructed or maintained by the Government, or are intended not to be used or operated at all, shall be exempt from payment of the regis-tration fees provided in this Act, but shall each pay an annual record-ing and service fee of fifteen pesos: Provided, however, That no re-fund, credit for, or reimbursement of registration fees or part thereof shall be made to any owner on account of the discontinuance of the use or operation of a motor vehicle subsequent to the payment of such registration fees: Provided, however, That in the event motor vehicles exempted under this section shall be found operated on any public highways, the regular registration fees and surcharges shall be collected in addition to whatever penalties may be imposed for viola-tion of this Act. The Commissioner of Land Transportation shall pro-vide distinctive number plates for vehicles exempted from payment of regular registration fees, and the owner of the vehicles concerned shall pay four pesos for each set of such number plates.(j) The maxi-mum allowable gross weight of a motor truck, passenger bus, or trailer, upon which to compute the registration fee thereof, shall be determined by the Commissioner of Land Transportation. He shall, from time to time as the need of the service may require, prepare, subject to the approval of the Secretary of Public Works and Com-munications, suitable tables of maximum allowable loads per wheel for different sizes and kinds of tires. (k) The registration fees pro-vided in this Act for trucks may be payable in two equal install-ments, the first to be paid on or before the last working day of Febru-ary if for hire, and in March if private; and the second to be paid on or before the last working day of August: Provided, That the fifty per cent penalty shall apply only to the unpaid balance of the remaining period of delinquency.Section 2. In addition to the registration fee imposed under Section 8 of Republic Act No. 4136, as amended, there shall be levied, assessed and collected annually on every pri-vate passenger automobile to be paid by the owner thereof prior to


the registration of such automobile with the Land Transportation Commission an energy tax in an amount equivalent to the percent-ages indicated below based on a schedule of values to be fixed by the Secretary of Finance: Provided, That the tax herein imposed shall not apply to private passenger automobiles for hire and those falling un-der special "S" classifications.

Sports Car (regardless of weight) 1 1/2 per cent

Extra Heavy Automobiles (2001 kilos and over) 1 1/2 per cent

Heavy Automobile (1501-2000 Kilos) 1 per cent

Light Automobile (1001-1500 Kilos) 3/4 of 1 per cent

Bantam Automobile (1000 Kilos or less) 1/2 of 1 per cent

Private jeeps and jeepneys (regardless of weight) 1/2 of 1 per cent

Provided, however, That in establishing such schedule the fol-lowing guidelines shall be observed; for current models, the prevail-ing market price; for non-current models, the prevailing market price after providing for reasonable depreciation: Provided, further, That in the case of discontinued models, the Secretary of Finance shall prescribe a deemed price in lieu of the prevailing market price and which shall constitute the basis for computing the value of such dis-continued models. Section 3. No private automobile subject to the tax herein imposed shall be registered by the Land Transportation Commission without the said tax having first been paid. The Com-missioner of Land Transportation shall collect the ad valorem tax as deputy of the Commissioner of Internal Revenue and shall turn over the proceeds thereof within 10 days after the end of each month to the Treasurer of the Philippines, together with a monthly collection report, copy of which shall be furnished to the Commissioner of In-ternal Revenue.Section 4. The Secretary of Finance shall promulgate


the necessary rules and regulations for the effective implementation of this Decree.Section 5. Section 3 of Republic Act No. 5443, as amended, with regard to the imposition of an additional registration fee on privately-owned automobiles and all other laws, executive or-ders, proclamations, regulations, or parts thereof which are inconsis-tent with any provision of this decree are hereby repealed or modi-fied accordingly. Section 6. This Decree shall take effect on January 1, 1976.Done in the City of Manila, this 12th day of December, in the year of Our Lord, Nineteen Hundred and Seventy-Five.PRESI-DENTIAL DECREE No. 896FURTHER AMENDING REPUB-LIC ACT NO. 4136, OTHERWISE KNOWN AS THE LAND TRANSPORTATION AND TRAFFIC CODEI, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby order and decree: Sec-tion 1. Section 8, paragraph (d) of Republic Act No. 4136 as amended by Presidential Decree No. 843 is hereby amended to read as follows:(d) Private motor tricycles for three wheels the sum of P30.00 and private motorcycles, scooters and bicycles with motor at-tachments, of two wheels, the sum of P50.00.Section 2. Section 8, paragraph (i) of the same Act is hereby amended to read as follows:(1) Motor vehicles not intended to be operated or used upon any pub-lic highway, or which are operated on highways not constructed or maintained by the government, or are intended not to be used or op-erated at all, shall be exempt from payment of the registration fees provided in this Act, but shall each pay an annual recording and ser-vice fee of fifteen pesos: Provided however, That no refund, credit for, or reimbursement of registration fees or part thereof shall be made to any owner on account of the discontinuance of the use or operation of a motor vehicle subsequent to the payment of such reg-istration fees: Provided, however, That in the event motor vehicles exempted under this section shall be found operated on any public


highway, the regular registration fees and surcharges shall be col-lected in addition to whatever penalties may be imposed for violation of this Act. The Commissioner of Land Transportation shall provide distinctive number plates for vehicles exempted from payment of regular registration fees, and the owner of the vehicles concerned shall pay a plate fee as prescribed by the Land Transportation Com-mission. Section 3. Section 8, paragraph (k) of the same Act is hereby amended to read as follows:(k) The registration fees provided in this Act for trucks may be payable in two equal installments, the first to be paid on or before the last working day of March whether for hire or private; and the second to be paid on or before the last working day of August; Provided, That the fifty per cent penalty shall apply only to the unpaid balance of the remaining period of delinquency.Section 4. This Decree shall take effect immediately. Done in the City of Manila, this 26th day February, in the year of Our Lord, nineteen hundred and seventy-six. PRESIDENTIAL DE-CREE No. 1057AMENDING REPUBLIC ACT NO. 4136, OTH-ERWISE KNOWN AS THE LAND TRANSPORTATION AND TRAFFIC CODEI, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby order and decree: Section 1. Section 7, classification (m), (n) and (o) of Republic Act No. 4136, is hereby amended to read as follows:x x x(m) Government automobiles; (n) government trucks; and (o) government motorcycles. Motor vehicles owned by the Gov-ernment of the Philippines or any of its political subdivisions and those belonging to the government-owned and/or controlled corpora-tions shall be registered under this classification although the latter may under their respective charters pay registration fees.x x xSection 2. This Decree shall take effect immediately. Done in the City of Manila, this 30th day of November, in the year of Our Lord, nineteen hundred and seventy-six.PRESIDENTIAL DECREE No.


1521THE SHIP MORTGAGE DECREE OF 1978WHEREAS, it is the declared policy of the State to accelerate the growth and devel-opment of the shipping industry; WHEREAS, due to the heavy capi-tal requirement for ship acquisition and operation, the shipping in-dustry has turned to financial institutions, both local and foreign, for assistance; WHEREAS, Philippine laws on ship mortgage have not been responsive to the needs of vessel financing such that it has de-terred the extensions of needed loans to the industry; WHEREAS, there is a recognized need for extending the benefits accorded to overseas shipping under Presidential Decree No. 214 to domestic shipping. NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby order the enactment of a ship mortgage law as follows: Section 1. Title. This Decree shall be known as "The Ship Mortgage Decree of 1978." Section 2. Who may Constitute a Ship Mortgage. Any citizen of the Philippines, or any association or corporation organized under the laws of the Philippines, at least sixty per cent of the capital of which is owned by citizens of the Philip-pines may, for the purpose of financing the construction, acquisition, purchase of vessels or initial operation of vessels, freely constitute a mortgage or any other lien or encumbrance on his or its vessels and its equipment with any bank or other financial institutions, domestic or foreign. Section 3. Mortgage of Vessel of Domestic Ownership; records. (a) No mortgage, which at the time such mortgage is made includes a vessel of domestic ownership as this term is defined in Presidential Decree No. 761, or any portion thereof, as the whole or any part of the property mortgaged, shall be valid, in respect to such vessel, against any person other than the mortgagor, his heir or as-sign, and a person having actual notice thereof, until such mortgage is recorded in the office of the Philippine Coast Guard of the port of documentation of such vessel. (b) The Coast Guard District or Sta-


tion Commander shall record mortgages delivered to him, in the or-der of their reception, in books to be kept for that purpose and in-dexed to show 1. The name of the vessel; 2. The names of the parties tot he mortgage; 3. The time and date of reception of the instrument; 4. The interest in the vessel so mortgaged; 5. The amount and date of maturity of the mortgage; 6. Name, citizenship, nationality and resi-dence of owner, and 7. Any material change of condition in respect to any of the preceding items. A copy of the instrument or mortgage shall be furnished the Central Bank of the Philippines. Section 4. Preferred Mortgages (a) A valid mortgage which at the time it is made includes the whole of any vessel of domestic ownership shall have, in respect to such vessel and as of the date of recordation, the preferred status given by the provisions of Section 17 hereof, if 1. The mortgage is recorded as provided in Section 3 hereof; 2. An affi-davit is filed with the record of such mortgage to the effect that the mortgage is made in good faith and without any design to hinder, de-lay, or defraud any existing or future creditor of the mortgagor or any lien or of the mortgaged vessel;3. The mortgage does not stipu-late that the mortgagee waives the preferred status thereof; (b) Any mortgage which complies with the above conditions is hereafter called a "preferred mortgage". For purposes of this Decree, a vessel holding a Provisional Certificate of Philippine Registry is considered a vessel of domestic ownership such that it can be subject of pre-ferred mortgage. The Philippine Coast Guard is hereby authorized to enter a vessel holding a Provisional Certificate of Philippine Registry in the Registry of Vessels and to record any mortgage executed thereon. Such mortgage shall have the preferred status as of the date of recordation upon compliance with the above conditions. (c) There shall be endorsed upon the documents of a vessel covered by a pre-ferred mortgage 1. The names of the mortgagor and mortgagee; 2. The time and date the endorsement is made; 3. The amount and date


of maturity of the mortgage; and 4. Any amount required to be en-dorsed by the provisions of paragraphs (e) or (f) of this Section. (d) Such endorsement shall be made (1) by the Coast Guard District or Station Commander of the port of documentation of the mortgaged vessel, or (2) by the Coast Guard District or Station Commander of any port in which the vessel is found, if such Coast Guard District or Station Commander is directed to make the endorsement by the Coast Guard District or Station Commander of the port of documen-tation. The Coast Guard District or Station Commander of the port of documentation shall give such direction by wire of letter at the re-quest of the mortgagee and upon the tender of the cost of communi-cation of such direction. Whenever any new document is issued for the vessel, such endorsement shall be transferred to and endorsed upon the new document by the Coast Guard District or Station Com-mander. In the case of a vessel holding a provincial certificate of Philippine Registry, the endorsement shall be made by the Philippine consul abroad upon direction by wire or letter from the Maritime In-dustry Authority at the request of the mortgagee and upon tender of the cost of communication of such direction. A certificate of such en-dorsement, giving the place, time and description of the endorse-ment, shall be recorded with the records of registration to be main-tained at the Philippine Consulate. (e) A mortgage which includes property other than a vessel shall not be held a preferred mortgage unless the mortgage provides for the separate discharge of such prop-erty by the payment of a specified portion of the mortgage indebted-ness. If a preferred mortgage so provides for the separate discharge, the amount of the portion of such payment shall be endorsed upon the documents of the vessel. (f) A preferred mortgage includes more than one vessel and provides for the separate discharge of each ves-sel by the payment of a portion of mortgage indebtedness, the amount of such portion of such payment shall be endorsed upon the


documents of the vessel. In case such mortgage does not provide for the separate discharge of a vessel and the vessel is to be sold upon the order of a district court of the Philippines in a suit in rem in ad-miralty, the court shall determine the portion of the mortgage indebt-edness increased by 20 per centum (1) which, in the opinion of the court, the approximate value of all the vessels covered by the mort-gage, and (2) upon the payment of which the vessel shall be dis-charged from the mortgage. Section 5. Certified Copies of Mort-gage; exhibition. The Coast Guard District or Station Commander upon the recording of a preferred mortgage shall deliver two certified copies thereof to the mortgagor who shall place, and use due dili-gence to retain, one copy on board the mortgaged vessel notice of which shall be posted in a conspicuous place thereat and cause such copy and the documents of the vessel to be exhibited by the master to any person having business with the vessel, which give rise to a maritime lien upon the vessel or to the sale, conveyance, or mortgage thereof. The master of the vessel shall upon the request of any such person, exhibit to him the documents of the vessel placed on board thereof. The requirement of this Section that a copy of a preferred mortgage be placed and retained on board the mortgaged vessel shall not apply in the case of a mortgaged vessel which is not self-pro-pelled (including but not limited to, barges, scors, lighters, and car floats). If the master of the vessel willfully fails to exhibit the docu-ments of the vessel or the copy of any preferred mortgage thereof, the Philippine Coast Guard may suspend or cancel the master's li-cense. Section 6. Prior and Subsequent Maritime Liens on Mort-gaged Vessel. The mortgagor (1) shall, upon request of the mort-gagee, disclose in writing to him prior to the execution of any pre-ferred mortgage, the existence of any maritime lien, prior mortgage, or other obligation or liability upon the vessel to be mortgaged, that is known to the mortgagor, and (2) without the consent of the mort-


gagee, shall not incur, after the execution of such mortgage and be-fore the mortgagee has had a reasonable time in which to record the mortgage and have indorsements in respect thereto made upon the documents of the vessel, any contractual obligation creating a lien upon the vessel other than a lien for wages of stevedores when em-ployed directly by the owner, operator, master, ship's husband, or agent of the vessel, for wages of the crew of the vessel, for general average, or for salvage, including contract salvage, in respect to the vessel, tonnage dues and all other charges (not to exceed P20,000) of the Philippine Government in respect to the vessel. A mortgagor, who, with intent to defraud, violates the above provision and if the mortgagor is a corporation or association, the president or other prin-cipal executive officer of the corporation or association, shall be punished by a fine of not, more than P5,000 or imprisonment of not more than two years, or both. The mortgage indebtedness shall there-upon become immediately due and payable at the election of the mortgagee. Section 7. Record of Notice of Claim of Lien on Mort-gaged Vessel; discharge of lien (a) The Coast Guard District or Sta-tion Commander of the port of documentation shall, upon the request of any person, record notice of his claim of a lien upon a vessel cov-ered by a preferred mortgage, together with the nature, date of cre-ation, and amount of the lien, and the name and address of the per-son. Any person who has caused notice of his claim of lien to be so recorded shall, upon a discharge in whole or in part of the indebted-ness, forthwith file with the Coast Guard District or Station Com-mander a certificate of such discharge. The Coast Guard District or Station Commander shall thereupon record the certificate. (b) The mortgagor upon a discharge in whole or in part of the mortgage in-debtedness, shall forthwith file with the Coast Guard District or Sta-tion Commander for the port of documentation of the vessel, a cer-tificate of such discharge duly executed by the mortgagee. Such


Coast Guard District or Station Commander shall there upon record the certificate. In case of a vessel covered by a preferred mortgage, the Coast Guard District or Station Commander at the port of docu-mentation shall endorse upon the documents of the vessel, or direct the Coast Guard District or Station Commander at any port in which the vessel is found, to so endorse, the fact of such discharge. A cer-tificate of such endorsement, giving the time, place and description of the endorsement, shall be recorded with the Philippine Coast Guard. Where the endorsement is made by a person other than the Coast Guard District or Station Commander such certificate shall be promptly forwarded to the Philippine Coast Guard. Section 8. Con-ditions Precedent to Record; interest on Preferred Mortgage (a) No mortgage shall be recorded unless it states the interest of the mort-gagor in the vessel, and the interest so mortgaged. (b) No mortgage, notice of claim of lien, or certificate of discharge thereof, shall be recorded unless previously acknowledged before the Coast Guard District or Station Commander of the port of documentation or a no-tary public or other officer authorized by a law of the Philippines to take acknowledgment of deeds or before a Philippine consul or con-sular agent. (c) In case of a change in the port of documentation of a vessel of the Philippines, no mortgage shall be recorded at the new port of documentation unless there is furnished to the Coast Guard District or Station Commander of such port, together with the copy of the mortgage to be recorded, a certified copy of the record of the vessel at the former port of documentation furnished by the Coast Guard District or Station Commander of such port. The Coast Guard District or Station Commander at the new port of documentation is authorized and directed to record such certified copy. Section 9. In-spection of the Copies for Records; fees. Each Coast Guard District or Station Commander shall permit records made under the provi-sions of this decree to be inspected during office hours, under such


reasonable regulation as the Philippine Coast Guard may establish. Upon the request of any person the Coast Guard District or Station Commander shall furnish him from the records of the Coast Guard's office (1) a certificate setting forth the names of the owners of any vessel, the interest held by each owner, and the material facts as to any mortgage covering, or any lien or other encumbrance upon, a specified vessel, (2) a certified copy of any mortgage, notice of claim of lien, or certified copy discharge in respect to such vessel, or (3) a certified copy as required by subsection (c) of Section 8 hereof. The Philippine Coast Guard shall collect the fees as provided for under existing laws and regulations for any mortgage recorded, or any cer-tificate or certified copy furnished by it. Section 10. Lien of pre-ferred Mortgage; foreclosure; jurisdiction; procedure A preferred mortgage shall constitute a lien upon the mortgaged vessel in the amount of the outstanding mortgage indebtedness secured by such vessel. Upon the default of any term or condition of the mortgage such lien may be enforced by the mortgagee by suit in remaining ad-miralty, wherein the vessel itself may be made a partly defendant and be arrested in the manner as provided in Section 11 hereof. Original jurisdiction of all such suits is granted to the Court of First Instance of the Philippines exclusively. In addition to any notice by publica-tion, actual notice of commencement of any such suit shall direct, to (1) the master, other ranking officer, or caretaker of the vessel, and (2) any person who has recorded a notice of claim of an undis-charged lien upon the vessel, as provided in Section 7 hereof, unless after search by the mortgage satisfactory to the court, such mort-gagor, master, other ranking officer, caretaker, or claimant is not found within the Philippines. Failure to give notice to any such per-son, as required by this Section, shall be liable to such person for damages in the amount of his interest in the vessel terminated by the suit. In case of judicial foreclosure as provided herein, the provisions


of Rule 68 of the New Rules of Court, if not inconsistent herewith, shall apply. The lien of a preferred ship mortgage may also be en-forced by a suit in rem in admiralty or otherwise in any foreign coun-try in which the vessel may be found pursuant to the procedure of said country for the enforcement of ship mortgages constituting mar-itime liens on vessels documented under the laws of said country. Section 11. Arrest of Vessels Upon the filing of the petition for the judicial foreclosure of a Preferred Ship Mortgage, or immediately thereafter, the applicant may apply ex-parte for an order for the arrest of the mortgaged vessel or vessels and the judge shall immediately issue the same, provided that it is made to appear by affidavit of the applicant, or of some other person who personally knows the facts that a default in the mortgage has occurred and that applicant files a bond executed to the adverse party in an amount to be fixed by the judge, not exceeding the applicant's claim, conditioned that the latter will pay all the costs which may be adjudged to the adverse party and all damages which he may sustain by reason of such arrest, if the court shall finally adjudge that the applicant was not entitled thereto. Section 12. Discharge of Order of Arrest; Counterbond At any time after an order of arrest has been granted, the party whose vessel or vessels had been arrested, or the person appearing in his behalf, may, upon reasonable notice to the applicant, apply to the judge who granted the order, or to the judge of the court in which the action is pending, for an order discharging the order of arrest. That judge shall order the discharge of the arrest if a cash deposit is made, or counter-bond executed to the creditor is filed, on behalf of the adverse party, with the clerk or judge of the court where the application is made in an amount double the value of the claim to secure the payment of any judgment that the creditor may recover in the action. Upon the filing of such counterbond, copy thereof shall forthwith be served on the creditor or his lawyer. Upon discharge of the order of arrest, the


property arrested or seized shall be delivered to the party making the deposit or giving the counterbond, or the person appearing in his be-half, the deposit or counterbond aforesaid standing in place of the vessel or vessels released. Should such deposit or counterbond for any reason be found to be, or become insufficient, and the party fur-nishing the same fails to file an additional co-counterbond, the at-taching creditor may apply for a new order of arrest or seizure. Sec-tion 13. Discharge of Order of Arrest for Improper or Irregular Is-suance The party whose vessel/s has been arrested may also, at any time either before or after the release of the arrested vessel, or before any arrest or seizure has been effected, upon reasonable notice to the creditor, apply to the judge who granted the order, or to the judge of the court in which the action is pending, for an order to discharge the order of arrest or seizure on the ground that the same improperly or irregularly issued. After hearing, the judge shall order the discharge of the order of arrest or seizure if it appears that it was improperly or irregularly issued and the defect is not cured forthwith. Section 14. Extrajudicial Foreclosure The provisions of the Chattel Mortgage Law on the remedy of extra-judicial foreclosure of mortgages in so far as they are not inconsistent herewith shall still apply. For the pur-pose of taking possession of the vessel or vessels, the foreclosing creditor may secure from a judge of the Court of First Instance of the province where the vessel may be found or where the creditor or debtor resides an order for the arrest or seizure of the vessel. Upon such order of seizure or arrest being issued, the sheriff shall immedi-ately take possession of the vessel or vessels for the purpose of fore-closure and sale. The vessel may only be released in accordance with the provisions of Section 13 of this Act, or when the debtor pays the outstanding obligation. Section 15. Foreign Ship Mortgages As used in Sections 10 to 18 hereof, the term "preferred mortgage" shall in-clude, in addition to a preferred mortgage made pursuant to the pro-


visions of this Decree, any mortgage, hypothecation, or similar charge created as security upon any documented foreign vessel if such mortgage, hypothecation, or similar charge has been duly and validly executed in accordance with the laws of the foreign nation under the laws of which the vessel is documented and has been duly registered in accordance with such laws in a public register either at the port of registry of the vessel or at a central office; and the term "preferred mortgage lien" shall also include the lien of such mort-gage, hypothecation, or similar charge: Provided, however, That such "preferred mortgage lien" in the case of a foreign vessel shall be subordinate to maritime liens for repairs, supplies, towage, use of drydock or marine railway, or other necessaries, performed or sup-plied in the Philippines. Section 16. Receiver in Foreclosure; posses-sion by sheriff In any suit in rem in admiralty for the enforcement of the preferred mortgage lien, the court may appoint a receiver and, in its discretion, authorize the receiver to operate the mortgaged vessel. The sheriff may be authorized and directed by the court to take pos-session of the mortgaged vessel notwithstanding the fact that the ves-sel is in the possession or under the control of any person claiming a possessory common law lien. Section 17. Preferred Maritime Lien, Priorities, Other Liens (a) Upon the sale of any mortgaged vessel in any extra-judicial sale or by order of a district court of the Philip-pines in any suit in rem in admiralty for the enforcement of a pre-ferred mortgage lien thereon, all pre-existing claims in the vessel, in-cluding any possessory common-law lien of which a lienor is de-prived under the provisions of Section 16 of this Decree, shall be held terminated and shall thereafter attach in like amount and in ac-cordance with the priorities established herein to the proceeds of the sale. The preferred mortgage lien shall have priority over all claims against the vessel, except the following claims in the order stated: (1) expenses and fees allowed and costs taxed by the court and taxes due


to the Government; (2) crew's wages; (3) general average; (4) sal-vage; including contract salvage; (5) maritime liens arising prior in time to the recording of the preferred mortgage; (6) damages arising out of tort; and (7) preferred mortgage registered prior in time. (b) If the proceeds of the sale should not be sufficient to pay all creditors included in one number or grade, the residue shall be divided among them pro rata. All credits not paid, whether fully or partially shall subsist as ordinary credits enforceable by personal action against the debtor. The record of judicial sale or sale by public auction shall be recorded in the Record of Transfers and Encumbrances of Vessels in the port of documentation. Section 18. Suit in Personam in Admi-ralty on Default (a) Upon the default of any term or condition of a preferred mortgage upon a vessel, the mortgagee may, in addition to all other remedies granted by this Decree, bring suit in personal in admiralty in a district court of the Philippines, against the mortgagor for the amount of the outstanding mortgage indebtedness secured by such vessel or any deficiency in the full payment thereof. (b) This Decree shall not be construed, in the case of a mortgage covering, in addition to vessels, realty or personality other than vessels, or both, to authorize the enforcement by suit in rem in admiralty of the rights of the mortgage in respect to such realty or personality other than vessels. Section 19. Surrender of Documents; termination of mort-gagee's interest; sale of mortgaged vessel (a) The documents of a vessel of the Philippines covered by a preferred mortgaged may not be surrendered (except in the case of the forfeiture of the vessel or its sale by the order of any court of the Philippines or any foreign coun-try) without the approval of the Maritime Industry Authority. The Administrator shall not grant such approval without the mortgagee's consent. (b) The interest of the mortgage in a vessel of the Philip-pines covered by a mortgage, shall not be terminated by the forfei-ture of the vessel for a violation of any law of the Philippines, unless


the mortgage authorized, consented, or conspired to effect the illegal act, failure, or omission which constituted such violation. Neither shall the chance by the shipowner in the use or character of the ves-sel or in the business of the mortgagor, without the consent of the mortgagee, nor the failure by the mortgagor to comply with the pro-visions of Section 5 hereof affect the validity or preference of the preferred ship mortgage as against third persons. (c) Upon the sale of any vessel of the Philippines covered by a preferred mortgage in any extrajudicial sale or by order of a district court of the Philippines in any suit in rem in admiralty for the enforcement of a maritime lien other than a preferred maritime lien, the vessel shall be sold free from all pre-existing claims thereon; but the court shall, upon the re-quest of the mortgagee, the plaintiff, or any intervenor, require the purchase at such sale to give and the mortgagee to accept a new mortgage of the vessel for the balance of the term of the original mortgage. The conditions of such new mortgage shall be the same, so far as practicable, as those of the original mortgage and shall be subject to the approval of the court. If such new mortgage is given, the mortgagee shall not be paid from the proceeds of the sale and the amount payable as the purchase price shall be held diminished in the amount of the new mortgage indebtedness. (d) No vessel of domestic ownership shall be mortgaged, nor, any rights under said mortgage shall be assigned, to any person not a citizen of the Philippines with-out the approval of the Maritime Industry Authority. The penalties and sanctions provided for under Commonwealth Act No. 606 shall apply in case of any violation hereof. (e) The foreclosure sale of ves-sels mortgaged under the provisions of this Decree, whether judi-cially or extra- judicially, shall not require the approval of the Mar-itime Industry Authority. Section 20. Who May Bid in the Foreclo-sure Sale The following persons are qualified to bid in the foreclo-sure sale of the mortgaged vessel: (a) Citizens of the Philippines or


corporations 60% of the capital of which is owned by Filipino citi-zens. (b) A foreign mortgagee or foreign national whose country has diplomatic relations with the Philippines or whose country grants re-ciprocal rights to Filipino citizens. In case the purchaser is a foreign individual or entity, the Philippine Coast Guard shall, upon presenta-tion of the certificate of sale, cancel the registration of the vessel and issue a certificate to that effect upon request. Section 21. Maritime Lien for Necessaries; persons entitled to such lien Any person fur-nishing repairs, supplies, towage, use of dry dock or marine railway, or other necessaries to any vessel, whether foreign or domestic, upon the order of the owner of such vessel, or of a person authorized by the owner, shall have a maritime lien on the vessel, which may be enforced by suit in rem, and it shall be necessary to allege or prove that credit was given to the vessel. Section 22. Persons Authorized to Procure Repairs, Supplies, and Necessaries The following persons shall be presumed to have authority from the owner to procure re-pairs, supplies, towage, use of dry dock or marine railway, and other necessaries for the vessel: The managing owner, ship's husband, master or any person to whom the management of the vessel at the port of supply is entrusted. No person tortuously or unlawfully in possession or charge of a vessel shall have authority to bind the ves-sel. Section 23. Notice to Person Furnishing Repairs, Supplies, and Necessaries The officers and agents of a vessel specified in Section 22 of this Decree shall be taken to include such officers and agents when appointed by a character, by an owner pro hac vice, or by an agreed purchaser in possession of the vessel; but nothing in this De-cree shall be construed to confer a lien when the furnisher know, or by exercise of reasonable diligence could have ascertained, that be-cause of the terms of a charter party, agreement for sale of the vessel, or for any other reason, the person ordering the repairs, supplies, or other necessaries was without authority to bind the vessel therefor.


Section 24. Waiver of Right to Lien Nothing in this Decree shall be construed to prevent the furnisher of repairs, supplies, towage, use of dry dock or marine railway, or other necessaries, or the mortgagee, from waiving his right to a lien, or in the case of a preferred mort-gage lien, to the preferred status of such lien, at any time by agree-ment or otherwise. Section 25. Existing Mortgages Not Affected; ex-ception This Decree shall not apply (1) to any existing mortgage, or (2) to any mortgage hereafter placed at any vessel under an existing mortgage, so long as such existing mortgage remains undischarged. The Decree shall, however, apply to mortgages executed pursuant to Presidential Decree No. 214, provided, that no vested rights of third parties are affected thereby. Section 26. Rules and Regulations by Philippine Coast Guard and the Maritime Industry Authority The Philippine Coast Guard and the Maritime Industry Authority are hereby authorized to make such rules and regulations within their re-spective spheres of jurisdiction, as they may deem necessary for the efficient execution of the provisions of this Decree. Section 27. Port of Documentation Whenever in the Ship Mortgage Decree of 1978 the words "port of documentation" are used, they shall be deemed to mean the port of registry of the vessel. Section 28. Instruments and Acts Validated All mortgages of any vessel of any part thereof, and all documentations, recordations, indorsements and indexing thereof, and proceedings incidental thereto made or done, prior to the effec-tivity of this Decree are declared valid to the extent they would have been valid if the port or ports at which it should have been docu-mented in accordance with law; and this Section is declared retroac-tive so as to accomplish such validations: Provided, That nothing herein contained shall be construed to deprive any person of any vested right. Section 29. Repealing Clause The provisions of the New Civil Code, the Code of Commerce, the Chattel Mortgage Law, the Revised Rules of Court and of such other laws, decrees, execu-


tive orders, rules and regulations which are in conflict or inconsistent with the provisions of this Decree are hereby repealed, amended or modified accordingly. If for any reason, any section, subsection, sen-tence, clauses or term of this Decree is held to be unconstitutional such decision shall not affect the validity of the other provisions of this Decree. Section 30. Effectivity This Decree shall take a effect upon its approval. Done in the City of Manila, this 11th day of June, in the year of Our Lord, nineteen hundred and seventy-eight.BATAS PAMBANSA BILANG. 43AN ACT PROVIDING FOR THE IS-SUANCE OF PERMANENT NUMBER PLATES TO OWNERS OF MOTOR VEHICLES AND TRAILERS, AMENDING FOR THE PURPOSE SECTION SEVENTEEN OF REPUBLIC ACT NUMBERED FORTY-ONE HUNDRED AND THIRTY-SIX Section 1. Section seventeen of Republic Act Numbered Forty-one hundred and thirty-six otherwise known as the Land Transportation and Traffic Code, is hereby amended to read as follows: "Sec. 17. Number plates, preparation and issuance of. —"The Bureau of Land Transportation shall cause reflective number plates to be prepared and issued to owners of motor vehicles and trailers registered and recorded in the Bureau of Land Transportation under this Act, as amended, for a reasonable fee: Provided, That the fee shall be sub-ject to the approval of the Minister of Transportation and Communi-cations in consultation with the Minister of Finance, and, Provided, further, That the identification, numbers and letters of any motor ve-hicle number plate shall be permanently assigned to such motor vehi-cle during its lifetime. No motor vehicles shall be exempted from payment of registration fees. Motor vehicles for hire and privately owned motor vehicles shall bear plates of reflective materials so de-signed and painted with different colors to distinguish one class from another."The transfer of motor vehicle plates whether temporary or regular, validating tags and/or stickers from one motor vehicle to an-


other without permit from the Bureau of Land Transportation, except security number plates on authorized vehicles, shall be punishable with a fine of not less than Five Thousand Pesos (P5,000.00) and/or imprisonment of six months at the discretion of the Court."For pur-poses of renewal of registration of motor vehicles, the Director or his Deputies shall issue validating tags and stickers indicating the year of registry, charging a reasonable fee: Provided, That the fee shall be subject to the approval of the Minister of Transportation and Com-munications in consultation with the Minister of Finance." Sec. 2. This Act shall take effect upon its approval.Approved: November 14, 1979.BATAS PAMBANSA BLG. 74AN ACT AMENDING CER-TAIN SECTIONS OF REPUBLIC ACT NUMBERED FORTY-ONE HUNDRED AND THIRTY-SIX, OTHERWISE KNOWN AS THE LAND TRANSPORTATION AND TRAFFIC CODE Section 1. Sections five, seven and eight of Republic Act Numbered Forty-one hundred and thirty-six, otherwise known as the Land Transportation and Traffic Code, are hereby amended to read as fol-lows: "Sec. 5. Compulsory registration of motor vehicles. — (a) All motor vehicles and trailer of any type used or operated on or upon any highway of the Philippines must be registered with the Bureau of Land Transportation for the current year in accordance with the pro-visions of this Act."(b) The dates of annual registration of motor ve-hicles shall be based on a registration scheme to be prepared by the Bureau of Land Transportation subject to approval of the Minister of Transportation and Communications. The scheme shall provide for a system that will distribute the registration of motor vehicles equi-tably over different months in a calendar year. Said scheme and rates shall not be changed more often than once every three (3) years, and only upon due notice given to the public at least ninety (90) calendar days before the effectivity of such registration scheme."Any registra-tion of motor vehicles not renewed or before the date fixed by the


Bureau of Land Transportation shall become delinquent and in-valid."(c) Dealer's Report. — Dealers shall submit to the Director of Land Transportation a report concerning the sale or transfer of or any other transaction involving motor vehicles, including such informa-tion as importation, manufacturing data, and number of stocks re-maining, as the Director may require for the effective enforcement of the provision of this Act within five (5) working days from such sale, transfer or transaction. Such dealers shall furnish also the buyer with a duplicate copy thereof, duly authenticated by the Director of Land Transportation."(d) Unauthorized repair of change of engine serial number. — Unless satisfactorily explained to and approved by the Director of Land Transportation, no repair involving the restoration of the original or registered serial number as stamped on the engine shall be allowed. No change involving an alteration of or tampering with the original or registered engine serial number of a motor vehi-cle shall ever be allowed, and any motor vehicle with a trace of hav-ing its engine serial number altered or tampered with shall be refused registration or re-registration."(e) Encumbrances of motor vehicles. — Mortgages, attachments, and other encumbrances of motor vehi-cles, in order to be valid against third parties must be recorded in the Bureau. Voluntary transactions or voluntary encumbrances shall likewise be properly recorded on the face of all outstanding copies of the certificates of registration of the vehicle concerned."Cancellation or foreclosure of such mortgages, attachments, and other encum-brances shall likewise be recorded, and in the absence of such can-cellation, no certificate of registration shall be issued without the corresponding notation of mortgage, attachment and/or other encum-brances."Records of encumbrances of motor vehicles shall be kept by the Bureau of Land Transportation in chronological and/or alpha-numerical and/or any other sequence and shall contain, among other things, the time, date, number of the entry, and other cross-indexing


entries for immediate data retrieval, in a "Book of Motor Vehicle En-cumbrances" referring to the creation, cancellation or foreclosure of the aforesaid mortgages, attachments or to other encumbrances."The Bureau of Land Transportation shall collect a fee of Fifty Pesos (P50.00) for every annotation of a mortgage, attachment and/or other encumbrances or cancellation thereof.""Sec. 7. Registration Classifi-cation. — The classification of vehicles shall be:(1) Private(2) For Hire(3) Government(4) Diplomatic"Within ninety days from the approval of this Act, appropriate sub-classifications shall be determined by the Director of Land Trans-portation with the approval of the Minister of Transportation and Communications, taking into consideration the body configuration, weight, cubic displacement and/or number of cylinders of the motor vehicle."(a) Private. — Motor vehicles registered under this classifi-cation shall not be used for hire under any circumstance."(b) For Hire. — Motor vehicles registered under this classification are those covered by certificates of public convenience, or special permits is-sued by the Board of Transportation, and shall be subject to the pro-visions of the Public Service Act and the rules and regulations issued thereunder, as well as the provisions of this Act."(c) Government. — Motor vehicles owned by the government of the Philippines or any of its political subdivisions shall be registered under this classifica-tion."(d) Diplomatic. — Motor vehicles owned by foreign govern-ments or by their duly accredited diplomatic officers in the Philip-pines and used in the discharged of their official duties.

Tourists bringing their own motor vehicles to the Philippines may, however, without registering such motor vehicles, use the same dur-ing but not after ninety (90) days of their sojourn: Provided, That the


motor vehicle displays the number plates for the current year of some other country or state, and said number plates as well as the name and address (permanent and temporary) of the thereof are reg-istered in the Bureau of Land Transportation prior to the operation of the motor vehicle."If such tourists remain in the Philippines longer than ninety (90) days, the motor vehicle shall not be operated unless registered in accordance with this Act and the corresponding regis-tration fees paid.""Sec. 8. Schedule of Registration Fees. — Except as otherwise specifically provided in this Act, each application for registration of motor vehicles shall be accompanied by an annual registration fee in accordance with a schedule to be prepared by the Bureau of Land Transportation subject to the approval of the Minis-ter of Transportation and Communications in consultation with the Minister of Finance. The fees in the schedule shall be fixed on the basis of the model, body configuration, weight, cubic displacement or number of cylinders of the motor vehicle and other relevant fac-tors. Said schedule shall not be changed more often than once every three (3) years, and only upon due notice given to the public at least ninety (90) calendar days before the effectivity of such schedule: "Provided, however, That beginning the calendar year 1981 and until changed pursuant to this section, the schedule of registration fees shall be as follows: Type Gas Diesel Bantam Cars 0-1600 cc Private P300.00 P250.00For Hire 450.00 400.00Light Cars 1601-1280 cc Private 600.00 550.00For Hire 900.00 800.00Heavy Cars 2801-over Private 1,500.00 1,200.00For Hire 2,500.00 2,000.00Trucks/Buses, including all types of utility vehicles (per 100 kg. of gross


vehicle weight) Private 20.00 2.00For Hire 30.00 15.00Trailers (per 100 kg. of gross weight) Private P10.00For Hire 12.00Mopeds (0-49 cc) P60.00Mopeds (50-cc over) Without sidecar Private 120.00With sidecar Private 150.00Without sidecar For Hire 150.00With sidecar For Hire 240.00"Provided, further, That registration fees for vehicles owned by the government and its political subdivi-sions shall be determined in consultation with the Minister of the Budget and within the constraints imposed by available funds: Pro-vided, further, That all motor vehicles, regardless of type and/or clas-sification, which are exclusively used and operated on private roads shall be subject to a recording fee of One Hundred Pesos (P100.00) only, for which stickers in lieu of regular plates shall be issued corre-sponding to the year of recording: Provided, finally, that such vehi-cles shall not be required to be physically brought to the office of the Bureau of Land Transportation for recording nor to be covered by compulsory vehicle insurance as required for registration pur-poses."For uniformity of registration fees and classification, all man-ufacturers and/or assemblers of motor vehicles, prior to the introduc-tion of a new model motor vehicle, shall submit the specifications of said model to the Bureau of Land Transportation which shall deter-mine under what schedule of registration fees the said model should fall."Sec. 2. All references to the "Land Transportation Commission" or "Commissioner" in any other provision of Republic Act Num-bered Forty-one hundred thirty-six, as amended, shall be automati-cally substituted with the words "Bureau of Land Transportation"


and/or "Director", as the case may be; and all other section or por-tions thereof which are inconsistent with this Act and/or Executive Order Numbered Five Hundred forty-six are hereby repealed.Sec. 3. This Act shall take effect upon its approval.Approved: June 11, 1980.BATAS PAMBANSA BILANG 398 AN ACT AMENDING CERTAIN SECTIONS OF REPUBLIC ACT NUMBERED FORTY-ONE HUNDRED AND THIRTY-SIX, OTHERWISE KNOWN AS THE LAND TRANSPORTATION AND TRAFFIC CODE. Section 1. Section nineteen of Republic Act Numbered Forty-one hundred and thirty six otherwise known as the Land Transportation and Traffic Code, is hereby amended to read as fol-lows: "Sec. 19. Duty to have license. — Except as otherwise specifi-cally provided in this Act, it shall be unlawful for any person to oper-ate any motor vehicle without having in his possession a valid li-cense to drive a motor vehicle. "The license shall be carried by the driver at all times when operating a motor vehicle, and shall be shown and/or surrendered for cause and upon demand to any person with authority under this Act to confiscate the same." Sec. 2. Section twenty of the same Act is hereby repealed. Sec. 3. Section twenty-two of the same Act is hereby amended to read as follows: "Sec. 22. Application for driver's license, fees, examination. — Every per-son who desires to personally operate any motor vehicle shall file an application to the Director or his deputies for a license to drive motor vehicles: Provided, however, That no person shall be issued a profes-sional driver's license who is suffering from contagious diseases, such as tuberculosis, sexually transmitted diseases and epilepsy or who is an alcohol or drug addict or dependent. "Each such applica-tion, except in the case of enlisted men operating government-owned vehicles, shall be accomplished by a fee of five pesos, and shall con-tain such information respecting the applicant and his ability to oper-ate motor vehicles, as may be required by the Bureau. "The Director


or his deputies shall also ascertain that the applicant's health, sight and hearing are sound and normal, and is physically and mentally fit to operate motor vehicles. To this end, the Director or his deputies shall require a certificate to that effect, signed by a reputable accred-ited physician. "An examination, theoretical and practical, to deter-mine every applicant's ability and fitness to operate motor vehicles to be conducted by the Director in such form and manner as he shall prescribe shall also be required. A manual containing the general scope of the examinations and such information as may be necessary for the guidance of the applicants and for the purpose of effectivity and implementation of this Act may be published in an official lan-guage and distributed at no cost to the applicants. "No application for a driver's license shall be received, unless the applicant: "(1) For a professional driver's license, is at least eighteen years of age, pos-sesses a valid student-driver's permit and has undergone instruction in the operation of motor vehicles for at least five months under a qualified instructor: Provided, however, That the period of time the applicant has operated a motor vehicle with a non-professional driver's license shall be credited against the period of instruction re-quired herein; and (2) For a non-professional driver's license, is at least seventeen years of age, possesses a valid student-driver's permit and has undergone instruction in the operation of motor vehicles for at least a month." Sec. 4. Section twenty-three of the same Act is hereby amended to read as follows: "Sec. 23. Issuance of driver's li-cense, fees and validity. — If, after such examination, the Director or his deputies find that the applicant possesses the necessary qualifica-tion and proficiency in the operation of motor vehicles, is able to read and write any of the official languages or a major dialect and knows how to read and interpret various traffic signs, signals and road markings, a professional or nonprofessional license may be is-sued to such applicant upon payment of the fee prescribed in accor-


dance with law, but prior to the issuance of said license, the applicant shall present himself in person and have his photograph taken by the bureau. All driver's licenses issued shall be signed in the presence of the Director or his deputies and shall bear, among others, the full name, date of birth, height, weight, sex, color of eyes, blood type, complete current address, right hand thumbprint of the licensee, li-cense number, and its date of issue and expiration. "In the issuance of licenses, the Bureau shall use such process or adopt such measure as will prevent any alteration or falsification of a license or will en-able the Bureau to detect any unauthorized license. "Except for stu-dent permits and new licenses, all driver's licenses shall be valid for three consecutive years reckoned from the birthdate of the licensee, unless sooner revoked or suspended: Provided, however, That, sub-ject to Section twenty-six hereof, any holder of a professional or nonprofessional driver's license who has not committed any violation during the three-year period shall be entitled to a renewal of such li-cense for five-year period." Sec. 5. Section twenty-four of the same Act is hereby amended to read as follows: "Sec. 24. Use of driver's license and identification card. — Every license issued under the provisions of this Act to any driver shall entitle the holder thereof, while the same is valid and effective, to operate motor vehicles de-scribed in such license: Provided, however, That every licensed pro-fessional driver, before operating a public utility vehicle registered under classification (b) of Section seven hereof, as amended by Batas Pambansa Bilang 74, shall secure from the Director, upon pay-ment of the sum of five pesos, a driver's identification card which he shall, at all times while so operating a public utility vehicle, display in plain sight in the vehicle being operated. The identification card shall be issued simultaneously with the license. "It shall be unlawful for any duly licensed driver to transfer, lend or otherwise allow any person to use his license for the purpose of enabling such person to


operate a motor vehicle. "No owner of a motor vehicle shall engage, employ, or hire any person to operate such motor vehicle, unless the person sought to be employed is a duly licensed professional driver." Sec. 6. Section twenty-six of the same Act is hereby amended to read as follows:"Sec. 26. Renewal or replacement of lost license. — Any license not renewed on or before the last working day prior to the ex-piry date of such license as provided for in the third paragraph of Section twenty-three of this Act shall become delinquent and invalid, except when the license is surrendered to the Director or his deputies on or before the last working day prior to the expiry date of such li-cense as hereinabove specified in order to avoid payment of the delinquency fees. "For a renewal of a delinquent license, there shall be collected as delinquency fee, in addition to the basic fee as pre-scribed, an amount equivalent to fifty per cent of said basic fee. "Ev-ery applicant for renewal of license to operate any motor vehicle shall present to the Director or his deputies, in person, the license is-sued to the applicant for the previous period, together with the basic fee hereinabove prescribed, and, in the case of professional drivers, three copies of a readily recognizable photograph of the applicant taken by the Bureau. In case the applicant for renewal has committed three or more offenses within a period of one year, or has suffered any injury or illness that impairs his ability to operate motor vehi-cles, he shall be required to undergo a theoretical and practical exam-ination in order to determine his ability and fitness to operate motor vehicles. "Lost License. — In case the license has been lost or can-not be produced, the licensee shall apply for a duplicate of the origi-nal on file with the Bureau by filing a sworn statement that such li-cense has been lost and that a thorough and diligent search was futile and in accordance with the procedure which the Director is hereby authorized to promulgate, subject to the approval of the Minister of Transportation and Communications. "The Director or his deputies


are hereby authorized to administer the oath in connection with such application." Sec. 7. Section twenty-seven of the same Act is hereby amended to read as follows: "Sec. 27. Authority to suspend, revoke and reinstate driver's license. — Without prejudice to the authority of the court in appropriate cases and except as herein otherwise pro-vided, the Director shall have exclusive power and authority to sus-pend or revoke for cause any driver's license issued under the provi-sions of this Act. "(a) The Director may suspend for a period not ex-ceeding three months or, after hearing, revoke any driver's license and may order such license, whether confiscated by, and/or in the possession of, any other law enforcement agencies deputized in ac-cordance with paragraph (d) (1) of Section four of this Act, to be de-livered to him whenever he has reason to believe that the holder thereof is an improper person to operate motor vehicles, or in operat-ing or using a motor vehicle in, or as an accessory to, the commis-sion of any crime or act which endangers the public. Any deputy of the Director may. for the same cause, suspend for a period not ex-ceeding three months any driver's license issued under the provisions of this Act; Provided, that such suspension may be appealed to the Director who may, after reviewing the case, confirm, reverse or modify the action taken by such deputy. "(b) Whenever during any twelve-month period a driver shall have been convicted at least three times for the violations of any provisions of this Act or of any regu-lations issued by the Director or any municipal or city ordinance re-lating to motor vehicle traffic not in conflict with any of the provi-sions of this Act, the Director may revoke or suspend the license of such driver for a period not exceeding two years. "(c) The license suspended or revoked under the provisions of subsections (a) and (b) of this section shall not be reinstated by the Director, unless the driver has furnished a bond in accordance with Section twenty-nine of this Act and only after the Director has satisfied himself that such


driver may again safely be permitted to operate a motor vehicle. "(d) A decision of the Director revoking or refusing the reinstate-ment of a license under the provisions of this section may be ap-pealed to the Minister of Transportation and Communications." Sec. 8. Section twenty-eight of the same Act is hereby amended to read as follows:"Sec. 28. Driver's bond. — The Director before reinstating any driver's license which has been suspended or revoked under the provisions of the preceding section or of any provisions of this Act, may require such driver to post a bond in the sum of five thousand pesos conditioned upon the satisfaction and payment of any claim which may be filed or of any execution which may be issued against such driver in any case wherein said driver may be held answerable while operating motor vehicles. The bond required in this section shall be in such form as to render sureties liable at least for a period of not less than one year nor more than three years: Provided, how-ever, That upon written application to the Director for release from such bond, the Director may, after revoking or suspending the driver's license, authorize the release of the bondsmen from further responsibility thereunder: Provided further, That should the director decide not to revoke the license of a driver who has been convicted of homicide through reckless imprudence, or of violation of the speed limit or of reckless driving at least three times within a twelve-month period, the said driver shall post a bond in the sum of not less than ten thousand pesos, conditioned upon the payment of any claim which may be filed or any execution which may be issued against him in any case wherein said driver may be held answerable while operating motor vehicles." Sec. 9. Section twenty-nine of the same Act is hereby amended to read as follows:"Sec. 29. Confiscation of driver's license. — Law enforcement and peace officers of other agencies duly deputized by the Director shall, in apprehending a driver for any violation of this Act or any regulations issued pursuant


thereto, or of local traffic rules and regulations not contrary to any provisions of this Act, confiscate the license of the driver concerned and issue a receipt prescribed and issued by the Bureau therefor which shall authorize the driver to operate a motor vehicle for a pe-riod not exceeding seventy-two hours from the time and date of issue of said receipt. The period so fixed in the receipt shall not be ex-tended, and shall become invalid thereafter. Failure of the driver to settle his case within fifteen days from the date of apprehension will be a ground for the suspension and/or revocation of his license." Sec. 10. Section thirty of the same Act is hereby amended to read as fol-lows:"Sec. 30. Student-driver's permit. — Upon proper application and the payment of the fee prescribed in accordance with law, the Director or his deputies may issue student-driver's permits, valid for one year to persons not under sixteen years of age, who desire to learn to operate motor vehicles. "A student-driver who fails in the examination on a professional or non-professional license shall con-tinue as a student-driver and shall not be allowed to take another ex-amination at least one month thereafter. No student-driver shall oper-ate a motor vehicle, unless possessed of a valid student-driver's per-mit and accompanied by a duly licensed driver. "The licensed driver duly accredited by the Bureau, acting as instructor to the student-driver, shall be equally responsible and liable as the latter for any vi-olation of the provisions of this Act and for any injury or damage done by the motor vehicle on account or as a result of its operation by a student-driver under his direction." Sec. 11. Section thirty-two of the same Act is amended to read as follows: "Sec. 32. (a) Exceed-ing registered capacity, issuance of conductor's license, validity and fee. — No person operating any motor vehicle shall allow more pas-sengers or more freight or cargo in his vehicle than its registered car-rying capacity. In the case of public utility trucks or buses, the con-ductor shall be exclusively liable for the violations of this section or


of Section thirty-two, letter (c) hereof: Provided, That the conductor before being employed by any public service operator shall get a per-mit or license from the Bureau and pay the fee prescribed in accor-dance with law, for said license or permit issued in his favor, which shall be valid for three years, and the same is renewable on or before the last working day prior to or on his birthdate, attaching a readily recognizable photograph taken by the Bureau and after presentation of a medical certificate of fitness of applicant. "Passenger trucks may be allowed to construct any cargo-carrying device at the rear or at the side of the truck, subject to the approval of the Director: Provided, however, That the total weight of the device, including the cargo, shall not exceed one hundred kilos. "(b) Carrying of passengers and freight on top of vehicles. — No person operating a motor vehicle shall allow any passenger to ride on the cover or top of such vehi-cles: Provided, however, That, subject to such conditions as may be contained in permits that may be issued by the Director, baggage or freight may be carried on the top of a truck so long as the weight thereof does not exceed twenty kilos per square meter and is distrib-uted in such a manner as not to endanger the passengers or stability of the truck."(c) Riding on running boards. — No driver shall allow any person to ride on the running board, step board, or mudguard of his motor vehicle for any purpose while the vehicle in motion.Sec. 12. Section fifty-six of the same Act is amended to read as fol-lows:"Sec. 56. Penalty for violation. — The following penalties shall be imposed for violations of this Act: "(a) For registering later than seven days after acquiring title to an unregistered motor vehicle or after conversion of a registered motor vehicle requiring larger regis-tration fee than for which it was originally registered, or for a re-newal of a delinquent registration, the penalty shall be a fine of fifty per cent of the registration fees corresponding to the portion of the year for which the vehicle is registered for use. "(b) For failure to


sign driver's license or to carry same while driving, one hundred pe-sos fine. "(c) Driving a vehicle with a delinquent or invalid driver's license, two hundred pesos fine or imprisonment not exceeding ten days, at the discretion of the court. "(d) Driving a motor vehicle with delinquent, suspended or invalid registration, or without registration or without the proper license plate for the current year, three hundred pesos fine or imprisonment not exceeding fifteen days, at the discre-tion of the court. "(e) Driving a motor vehicle without first securing a driver's license, five hundred pesos fine and imprisonment of not ex-ceeding fifteen days. "(f) Driving a motor vehicle while under the in-fluence of liquor or narcotic drug, a fine of not less than one thou-sand pesos or imprisonment of not less than three nor more than six months, or both, at the discretion of the court. "(g) Violation of Sec-tions thirty-two, thirty-four (a), (b), and (b-1), thirty-five and forty-six, a fine not exceeding one hundred pesos: Provided, however, That in the case of violation of Section thirty-four (b) the vehicle or vehicles affected may not be allowed to operate, unless the require-ment provided in this section are complied with. "(h) Violations of Sections forty-nine, fifty-one, and fifty-two, a fine of not less than twenty-five pesos nor more than fifty pesos. "(i) For using or at-tempting to use a driver's license, identification card, certificate of registration, number plate, tag or permit in similitude of those issued under this Act, or falsely or fraudulently representing as valid and in force any driver's license under this Act which is delinquent or which has been suspended or revoked, a fine of not less than one thousand nor more than three thousand pesos or imprisonment of not more than six months, or both, at the discretion of the court. "For making, manufacturing, distributing or selling a driver's license, identification card, certificate of registration, number plate, tag or permit in imita-tion or similitude of those issued under this Act, the penalties under the provisions of the Revised Penal Code. "If the violation is com-


mitted by a public officer or employee, the offender shall further-more suffer perpetual absolute disqualification. "(j) For using private passenger automobiles, private trucks, private motorcycles, and mo-tor wheel attachments for hire, in violation of Section seven, subsec-tions (a), (b), and (c), of this Act, a fine of two hundred pesos and suspension of driver's license for a period of three months for the first conviction; a fine of three hundred pesos and six months impris-onment of one year and permanent revocation of the driver's license for the third conviction. "(k) For permitting, allowing, consenting to, or tolerating the use of privately-owned motor vehicles for hire in vi-olation of Section seven, subsections (a), (b), and (c), of this Act, there shall be imposed upon the owner of the vehicle as fine of five hundred pesos and the certificate of registration shall be suspended for a period of three months for the first conviction, and an increase of one hundred pesos in the fine and one month's suspension of the registration for each subsequent conviction. "(l) For violation of any provisions of this Act or regulations promulgated pursuant hereto, not hereinbefore specifically punished, a fine of not less than one hundred nor more than five hundred pesos shall be imposed. "(m) In the event an offender cannot pay any fine imposed pursuant to the provisions of this Act, he shall be made to undergo subsidiary im-prisonment as provided for in the Revised Penal Code. "(n) If, as the result of negligence or reckless or unreasonable fast driving, any ac-cident occurs resulting in death or injury of any person, the motor vehicle operator at fault shall, upon conviction, be punished under the provisions of the Revised Penal Code." Sec. 13. The fees and charges herein provided as well as those provided in other sections of the same Act may be revised by the Minister of Transportation and Communications, upon the recommendation of the Director, subject to the approval of the Cabinet. Such fees and charges shall be revised at just and reasonable rates sufficient to cover administrative


costs, and, whenever practicable, be uniform for similar or compara-ble services and functions. Sec. 14. For purposes of simplicity, econ-omy and efficiency in operations and implementation, the Director, subject to the approval of the Minister of Transportation and Com-munications, is hereby authorized to promulgate rules and regula-tions for the rational and equitable issuance and renewal of licenses during the first three years following the effectivity of this Act, in-cluding the said period. Accordingly, the Director shall proportion-ately reduce the fees corresponding to the period of validity of the driver's license.Sec. 15. This Act shall take effect upon its approval. Approved: May 18, 1983 PRESIDENTIAL DECREE NO. 1958REPEALING PRESIDENTIAL DECREE NUM-BERED 1934 AND 1950 AND IMPOSING A PRI-VATE MOTOR VEHICLE TAX AND FOR OTHER PUR-POSESWHEREAS, the current economic crisis amounts to a grave emergency which affects the stability of the nation and require immediate action;WHEREAS, the is-suance of this decree is an essential and necessary component of the national economic recovery program promulgated to meet and overcome the emer-gency;NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby order and decree:SECTION 1. In lieu of the registration fee and energy tax imposed under existing laws, all motor vehicles clas-sified as “private” shall, upon every annual registration, pay a “pri-vate motor vehicle tax” in accordance with the following schedule:

Age of Vehicle

Vehicle Current 1- 2- 3- 4- 5- 6-


Type year year year year year yearPrivate Passen-ger Cars Light (0-1600cc)

₱1000 ₱1000

₱1000

₱1000

₱1000

₱1000

₱800

Medium (1601cc-2800cc)

₱2000 ₱2000

₱2000

₱2000

₱1600

₱1600

₱1200

Heavy (2800cc and above)

₱4000 ₱4000

₱4000

₱4000

₱4000

₱4000

₱2800

Private Utility Vehicles (2700 kg GVW and below) –

₱1000 (regard-less of age of ve-hicle)

Provided that with respect to tax-exempt vehicles, they shall pay registration fees.SEC. 2. The tax im-posed herein shall not apply to all public utility vehi-cles.SEC. 3. Presidential Decree Nos. 1934 and 1950 are hereby repealed and Republic Act No. 4136, as amended by Presidential Decree No. 843 and Batas Pambansa Blg. 74 and all laws, decrees, rules and reg-ulations or parts thereof, which are inconsistent with the provisions of this Decree are hereby modified ac-cordingly.SEC. 4. The Minister of Transportation and Communications shall issue the necessary rules and


regulations to implement the provisions of this Decree, including the manner by which collections under Presi-dential Decree Nos. 1934 and 1950 shall be adjusted or refunded as the case may be as a result of this De-cree.SEC. 5. This Decree shall take effect immediately.-DONE in the City of Manila, this 10th day of October, in the year of Our Lord, nineteen hundred and eighty-

four.Executive Order No. 125 font size

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REORGANIZING THE MINISTRY OF TRANSPORTATION AND COMMUNICATIONSDEFINING ITS POWERS AND FUNCTIONS AND FOR OTHER PURPOSE

RECALLING that the reorganization of the government is mandated expressly in Article II, Section 1(a), and Article III of the Freedom Constitution:

HAVING IN MIND that pursuant to Executive Order No. 5 (1996), it is directed that necessary and proper changes in the organizational and functional structures of the government, its agencies and instrumentalities, be effected in order to promote efficiency and effectiveness in the delivery of public service:

CONSIDERING that viable and dependable transportation and communication networks are necessary tools for economic recovery:


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CONSIDERING further that rapid technological advances in communication facilities require a distinct response to the peculiar problem of this field:

REALIZING that the growing complexity of the transportation sector has necessitated its division into various sub-sectors to facilitate the regulation and promotion of the sector as a whole: and

REALIZING further that the state needs to regulate this network and promote their continuous upgrading in order to preserve their viability and enhance their dependability:

NOW, THEREFORE, I, CORAZON C. AQUINO, President of the Philippines , by virtue of powers vested in me by the sovereign will of the Filipino people and the Freedom Constitution, do hereby order:

SECTION 1. Title. This Executive Order shall otherwise be known as the Reorganization Act of the Ministry of Transportation and Communication.

SECTION 2. Reorganization. The Ministry of Transportation and Communication is hereby reorganized, structurally and functionally, in accordance with the provisions of this Executive Order.

SECTION 3. Declaration of Policy. The state is committed to the maintenance and expansion of viable, efficient and dependable transportation and communication system as effective instrument for national recovery and economic progress. It shall not compete as a matter of policy with private enterprises and shall operate transportation and communication facilities only in those areas


where private initiatives are inadequate or non-existent.

SECTION 4. Mandate. The Ministry shall be the primary policy, planning, programming, coordinating, implementing, regulating, and administrative entity of the Executive Branch of the government in the promotion, development and regulation of dependable and coordinated networks of transportation and communication system, as well as in the fast, sale, efficient and reliable postal, transportation and communication services.

To accomplish such mandate, the Ministry shall have the following objectives:

1. Promote the development of dependable and coordinated networks of transportation and communication systems;

2. Guide government and private investment in the development of the country's inter- model transportation and communication systems in a most practical, expeditious, and orderly fashion for maximum safety, service, and cost effectiveness;

3. Impose appropriate measure so that technical, economic and other condition for the continuing economic viability of the transportation and communication entities are not jeopardized and do not encourage inefficiency and distortion of traffic patronage;

4. Develop an integrated plan for a nationwide transmission system in accordance with the national and international telecommunication service requirement including, among others,radio and television broadcast relaying, leased channel services and data transmission;


5. Guide government and private investment in the establishment, operation and maintenance of an international switching system for incoming and outgoing telecommunication services;

6. Encourage the development of a domestic telecommunication industry in coordination with the concern entities particularly, the manufacture of communications/ electronics equipment and components to complement and support as much as possible, the expansion, development, operation and maintenance of the nationwide telecommunications network;

7. Provide for a safe, reliable and efficient postal system for the country.

SECTION 5. Powers and functions. To accomplish its mandate, the Ministry shall have the following powers and functions:

Formulate and recommend national policies and guidelines for the preparation and implementation of integrated and comprehensive transportation and communication system at the national, regional and local levels;

1. Establish and administer comprehensive and integrated program for transportation and communications, and for its purpose, may call on any agency corporation, or organization, whether public or private, whose development progress include transportation and communications, as an integral part thereof, to participate and assist in the preparation and implementation of such programs;


2. Assess , review and provide direction to transportation and communication research and development programs of the government in coordination with other institutions concerned;

3. Administer all laws, rules and regulations in the field of transportation and communication;

4. Coordinate with the Ministry of Public Works and Highways in the design, development, rehabilitation, improvement, construction, maintenance and repair of telecommunications,ports, airports and railways project and facilities including navigational aids and implement its development works through competitive bidding,negotiated, contracts or other methods as the President may authorize;

5. Establish, operate and maintain a nationwide postal system that shall include mail processing delivery services, and money order services and promote the art of philately;

6. Sub-allocate series of frequencies of bands allocated by the International Telecommunications Union to the specific services;

7. Accredit foreign aircraft manufacturer and/or international organizations for aircraft certification in accordance with procedures and standards established by the Bureau of Air Transportation;

8. Deputize the Philippine Airlines and/or the Airline Pilots Association of the Philippines for licensing of pilots in accordance with the rules, procedures and the standards established by the Bureau of Air Transportation;


9. Perform such other power and function as may be prescribed by law.

SECTION 6. Authority and Responsibility. The authority and responsibility for the exercise of the candidate of the Ministry and for the discharge of its powers and functions shall be vested in the Minister of transportation and communication, herein after referred to as the Minister, who shall have supervision and control over the Minister and shall be appointed by the President.

SECTION 7. Office of the Minister. The Office of the Minister shall consist of the Minister and his immediate staff.

SECTION 8. Deputy Ministers. The Minister shall be assisted by four(4) Deputy Ministers appointed by the president upon the recommendation of the Minister, one to be responsible for the attached Agency and Corporation, one for Transportation, one for Communication and one for Minister Regional Offices.

SECTION 9. Assistant Ministers. The Minister shall also be assisted by seven (7) assistant Ministers appointed by the Minister upon the recommendation of the Minister, each of whom shall head each of the following:

1. Administrative and Legal Services;

2. Finance and Management Services;

3. Planning and Research Services;

4. Technical Services;


5. Luzon Regional Offices;

6. Visayas Regional Offices;

7. Mindanao Regional Offices.

SECTION 10. Structural Organization. The Ministry, aside from the Ministry Proper which is comprised of the Offices of the Minister, Deputy and Assistant Ministers, shall be composed of the Bureaus and Ministry Regional Offices.

There shall be four (4) Bureaus, namely: Bureau of Land Transportation, Bureau of Air Transportation, Bureau of Post, and Bureau of Telecommunications.

The Office of the Minister shall have direct line supervision and control over the Bureaus and Ministry Regional Offices. The Ministry Proper shall be responsible for developing and implementing policies, plans programs, and projects for the Ministry.

The Bureau shall be essentially staff in character.

SECTION 11. Ministry Regional Offices. The Ministry shall have two (2) Ministry Regional Offices in each of the administrative regions of the country: the Ministry Regional Office for Transportation and the Ministry Regional Office for Communications. The present Regional Offices of the Bureau of Air Transportation and Land Transportation Commission are hereby abolished and their functions are transferred to the respective Ministry Regional Offices for Transportation. A Ministry Regional Office for Transportation shall be headed by a Ministry Regional


Directed assisted by two(2) Assistant Ministry Regional Directors responsible for Air and land affairs, respectively. The present Regional Offices of the Bureau of Post and Bureau of Telecommunications are hereby abolished and their functions are transferred to respective Ministry Regional Office for Communications. A Ministry Regional Office for Communications shall be headed by a Ministry Regional Director assisted by two(2) Assistant Ministry Regional Directors for telecommunications and postal services, respectively. The abolition of the herein Regional Offices and the transfer of their function shall be govern by the provision of Section 19 (b) hereof.

The Ministry Regional Offices shall be under the direct supervision of the Deputy Minister for Regional Offices. The Ministry Regional Offices shall be essentially line in character and shall be responsible for the delivery of all front line services of the Ministry.

For such purposes, a Ministry Regional Offices shall have its administrative region, the following functions:

1. Implement laws, and policies, plans, programs, projects, rules and regulation of the Ministry;

2. Provide efficient, and effective service to the people;

3. Coordinate with regional offices of other ministries, offices and agencies;

4. Coordinate with local government units;


5. Perform such other functions as may be provided by law.

SECTION 12. Bureau of Air Transportation. The Bureau of Air Transportation, as reorganized herein, shall have the function of developing, formulating and recommending plans, policies, program, projects, standards, specification and guidelines related to Air Transportation including air space utilization, air traffic control and aeronautics communication and information services, aircraft and air navigational facilities, services, maintenance and operations. For such purposes, it shall, with the approval of the Minister:

1. Establish and prescribe rules and regulations for the inspection and registration of aircraft's;

2. Establish and prescribe rules and regulations for the issuance of licenses to qualified airmen;

3. Establish and prescribe rules and regulations for the enforcement of laws governing air transportation, including the penalties for violations thereof, and for the deputization of appropriate law enforcement agencies in pursuant thereof;

4. Determine, fix and/or prescribe charges and/or rates pertinent to the operation of public air utility facilities and services except in cases where charges or rates are established by international bodies or associations of which the Philippines is a participating member or by bodies or associations reorganized by the Philippine Government as the proper arbiter of such charges or rates;

5. Administer and operate the Civil Aeronautics Training Center;


6. Perform such other function as may be provided by law.

SECTION 13. Bureau of Land Transportation. The Bureau of Land Transportation is hereby created and shall have the functions of developing, formulating and recommending plans, programs, policies, standards, specifications and guidelines pertaining to land transportation. For such purposes, it shall, with the approval of the Minister:

1. Establish a prescribe rules and regulations for routes, zones and/or areas of particular operators of public land services;

2. Establish and prescribe rules and regulations for the issuance of certificates of public convenience for the operation of public and land transportation utilities and services such as motor vehicles, trimobiles, and railroad lines;

3. Establish and prescribe rules and regulation for the inspection and registration of public and land transportation facilities such as motor vehicles, trimobiles, and railroad lines;

4. Establish and prescribe rules and regulations for the issuance of licenses to qualified motor vehicle drivers, trimobile drivers, motor vehicle conductors, train engineers and train conductors;

5. Establish and prescribe the corresponding rules and regulation for the enforcement of laws governing land transportation, including the penalties for violation thereof, and for the deputation of appropriate law enforcement agencies in pursuance thereof;


6. Determine, fix and/or prescribe charges and/or rates pertinent to the operation of public and land utility facilities and services except in cases where charges or rates are established by international bodies or association of which the Philippines is a participating member or by bodies or association recognized by the Philippine Government as the proper arbiter of such charges or rates;

7. Establish and prescribe the rules, regulations, procedures and standards for the accreditation of driving schools;

8. Performs such other functions as may be provided by law.

SECTION 14. Maritime Industry Authority. The Maritime Industry Authority is hereby retained and shall have the following functions:

9. Develop and formulate, plans, policies, programs, project, standards, specifications and guidelines geared towards the promotion and development of the Maritime Industry, the growth and effective regulation of shipping enterprises, for the national security objectives of the country;

10. Establish, prescribe and regulate routes, zones and /or areas of operation of particular operators of public water services;

11. Issue certificates of public convenience for the operation of domestic and overseas water carriers;

12. Register vessels as well as issue certificates, licenses or documents necessary or incident thereto;


13. Undertake the safety regulatory functions pertaining to vessels construction and operations including the determination of manning levels and issuance of certificates competency to seamen;

14. Enforce laws, prescribe and enforce rules and regulation, including penalties for violation thereof, governing water transportation and the Philippine merchant marine with the aid of other law enforcement agencies;

15. Undertake the issuance of licenses to qualified seamen and harbor, bay and river pilots;

16. Determine, fix and/or prescribe charges and/or rates pertinent to the operation of public water transport utilities, facilitate all services except in cases where charges or rates are established by international bodies or association of which the Philippine is a participating member or by bodies or association recognized by the Philippine Government as the proper arbiter of such charges or rates;

17. Accredit marine surveyors and maritime enterprises engaged in shipbuilding, ship repair, ship breaking, domestic and overseas shipping, ship management and agency;

18. Supervise the Philippine Merchant Marine Academy as recognized herein in accordance with its charter, the provision hereof and applicable laws, rules and regulation under the chairmanship of the maritime administrator;

19. Issue and register the Continuous Discharge Book of Filipino Seamen;


20. Establish and prescribe rules and regulation, standards and procedures for the efficient and effective discharge of the above functions;

21. Perform such other function as may now or hereafter be provided by the law.

SECTION 15. Bureau of Telecommunications. The Bureau of Telecommunications, as reorganized herein, shall develop, formulate and recommend plans, policies, programs, standards, specifications and guidelines to provide telecommunications facilities, including telecommunications systems for purposes of augmenting limited or inadequate existing private telecommunication service; provide telecommunications in areas where no such services are available; and assist the private sector engage in telecommunication services. For such purposes, it shall, with the approval of the Minister:

1. Establish and prescribe rules and regulation for the operation and maintenance of such telecommunications facilities in areas not adequately served by the private sector in order to render such domestic and overseas services that are necessary or proper with due consideration for advances in technology;

2. Administer and operate the Telecommunication Training Institute;

3. Perform such other function as may be provided by law.

SECTION 16. Bureau of Post. The Bureau of Posts, presently existing, shall have the function of developing, formulating and recommending plans, policies, programs, standards, specification


and guidelines to provide safe, fast, reliable and efficient postal service in the country. For such purposes, it shall, with the approval of the Minister:

1. Establish and prescribe rule and regulation for the enforcement of laws governing postal service, including the penalties for the violation thereof and for the deputation of appropriate law enforcement agencies in pursuance thereof;

2. Determine, fix and/or prescribe charges and/or rates for postal services except in cases where charges or rates are establish by international bodies or association of which the Philippines is a participating member or by bodies or association recognized by the Philippine Government as the proper arbiter of such charges or rates;

3. Establish and prescribe rules and regulation for the operation and maintenance of a nationwide postal system that shall include mail processing, delivery services, and money order services and the promotion of philately;

4. Perform such other functions as may be provided by law.

SECTION 17. Abolition/Transfer/Consolidation:

1. The Land Transportation Commission hereby abolished and its staff functions are transferred to the Bureau of Land Transportation as provided in Section 13 herein and its line functions are transferred to the Ministry Regional Offices as provided in Section 11 herein, such transfer of functions is subject to the provision of Section 19 (b) hereof.


2. PNL Leasing, Inc. is hereby abolished and its functions are transferred to the Philippine National Lines, Inc. subject to the provision of Section 19 (b) hereof.

3. The National Aero Manufacturing, Inc. and the Philippine Aero Systems, Inc. are hereby abolished in accordance with the provision of Section 19 (a) hereof.

4. The Civil Aeronautics Board is hereby transferred from the Ministry of Tourism to the Ministry as an attached agency in accordance with the provision of Section 19 (a) hereof.

SECTION 18. Attached Agencies and Corporation.

1. The following agencies and corporation are attached to the Ministry: the Philippine National Railways, the Maritime Industry Authority, the Philippine National Lines, the Philippine Aerospace Development Corporation, the Metro Manila Transit Corporation, the Office of Transportation Cooperatives, the Philippine Ports Authority, the Philippine Merchant Marine Academy, the Toll Regulator Board, the Light Rail Transit Authority, the Transport Training Center, the Civil Aeronautics Board, the National Telecommunications Commission and the Manila International Airport Authority.

2. An Airport Security Center is hereby created within the Manila International Airport Authority, to plan, supervise, control, coordinate, integrate and direct intelligence and operational activities of all police and military units, security and safety service units, government monitoring and intelligence units and other security operating units employed by government entities and/or by private


agencies in the Manila International Airport. The center is under the direct supervision and control of MIAA General Manager. Moreover, the Authority shall be Authorized to organize a Manila International Airport Police Force with all the police powers necessary to implement the objectives of the Center.

3. The exercise of supervision and control by the Airport Security Center does not include the transfer of appropriation, equipment and personnel and the said authority; PROVIDED, that the Airport Security Center may cause the deployment of equipment and the personnel in such manner it deems necessary in the discharge of its functions.

SECTION 19. Transitory Provision. In accomplishing the acts of reorganization herein prescribed, the following transitory provisions shall be complied with, unless otherwise provided elsewhere in this Executive Order:

1. The transfer of a government unit shall include the function, appropriation, funds, records, equipment, facilities, chooses in actions, rights, other assets, and liabilities, if any, of the transferred unit as well as the personnel thereof, as may be necessary, who shall, in a hold over capacity, continue to perform their respective duties and responsibilities and receive the corresponding salaries and benefits unless in the meantime they are separated from the government service pursuant to Executive Order No.17 (1986) or Article III of the Freedom Constitution. Those personnel of the transferred unit whose positions are not included in the Ministry's new position structures and staffing pattern approved and prescribed by the Minister or who are not re-appointed shall be deemed


separated from the service and shall be entitled to the benefits provided in the second paragraph of Section 20 hereof.

2. The transfer of functions which results in the abolition of the government unit that has exercised them shall include the appropriations, funds, records, equipment, facilities, &chooses in action, rights, other assets and personnel as may be necessary to the proper discharge of the transferred functions. The abolished units remaining appropriations and funds, if any, shall revert to the General Funds and its remaining assets, if any, shall be allocated to such appropriate units as the Minister shall determine or shall otherwise be disposed in accordance with the Government Auditing Code and other pertinent laws, rules and regulations. Its liabilities, if any, shall likewise be treated in accordance with the Government Auditing Code and other pertinent laws, rules and regulations. Its personnel shall, in a hold-over capacity, continue to perform their duties and responsibilities and receive the corresponding salaries and benefits unless in the meantime they are separated from the service pursuant to Executive Order No. 17 (1986) or Article III of the Freedom Constitution. Its personnel, whose positions are not included in the Ministry's new position structure and staffing pattern approved and prescribed by the Minister under Section 20 hereof or who are not re-appointed, shall be deemed separated from the service and shall be entitled to the benefits provided in the second paragraph of the same Section 20.

3. The transfer of functions which does not result in the abolition of the government unit that has exercised them shall include the appropriations, funds, records, equipment, facilities, chooses in action, rights, other assets and personnel as may be necessary to the proper discharge of the transferred functions. The liabilities, if any,


that may have been incurred in connection with the discharge of the transferred functions, shall be treated in accordance with the Government Auditing Code and other pertinent laws, rules and regulations. Such personnel shall, in a hold-over capacity continue to perform their respective duties and responsibilities and received the corresponding salaries and benefits unless in the meantime they are separated from the service pursuant to the Executive Order No. 17 (1986) or Article III of the Freedom Constitution. Personnel, whose positions are not included in the Ministry's new position structure and staffing pattern approved and prescribe by the Minister under Section 20 hereof or who have not been re-appointed, shall be deemed separated from the service and shall be entitled to the benefits provided in the second paragraph of the same Section 20.

4. In case, of the abolition of a government unit which does not result in the transfer of its functions to another unit, the appropriations and funds of the abolished unit shall revert to the General Fund, while the records, equipment, facilities, chooses in action, rights, and other assets, thereof shall be allocated to such appropriate units as the Minister shall determine or shall otherwise be disposed in accordance with the Government Auditing Code and other pertinent laws, rules and regulations. The liabilities of the abolished units shall be treated in accordance with the Government Auditing Code and other pertinent laws, rules and regulations, while the personnel thereof, whose positions are not included in the Ministry's new position structure and staffing pattern approved and prescribed by the Minister under Section 20 hereof or who have not been re-appointed, shall be deemed separated from the service and shall be entitled to the benefits provided in the second paragraph of the same Section 20.


5. In case of merger or consolidation of government units, the new or surviving unit shall exercise the functions (subject to the reorganization herein prescribe and the laws, rules and regulations pertinent to the exercise of such function) and shall acquire the appropriation, funds, records, equipment, facilities, chooses in action, rights, other assets, liabilities if any, and personnel, as may be necessary, of (1) the units that composed the merged unit or (2) the absorbed unit as the case mat be. Such personnel shall, in a hold over capacity, continue to perform their respective duties and responsibilities and receive the corresponding salaries and benefits unless in the meantime they are separated from the service pursuant to Executive Order No.17 (1986) or Article III of the Freedom Constitution. Any such personnel, whose position is not included in the Ministry's new position structure and staffing pattern approved and prescribed by the Minister under Section 20 hereof or who is not re-appointed, shall be deemed separated from the service and shall be entitled to the benefits provided in the second paragraph of the same Section 20.

6. In case of termination of a function which does not result in the abolition of the government unit which has performed such function, the appropriation and funds intended to finance and discharge of such functions shall revert to the General Fund, while the records, equipment, facilities, chooses in action, rights and other assets used in connection with the discharge of such functions shall be allocated to the appropriate units as the Minister shall determine or shall otherwise be disposed in accordance with the Government Auditing Code and other pertinent laws, rules and regulations. The liabilities, if any, that may have been incurred in connection with the discharge of such functions shall likewise be treated in accordance with the Government Auditing Code and other pertinent laws, rules


and regulation. The personnel who have performed such function, whose positions are not included in the Ministry's new position structure and staffing pattern approved and prescribed by the Minister under Section 20 hereof or who have not been re-appointed, shall be deemed separated from the service and shall be entitled to the benefits provided in the second paragraph of the same Section 20.

SECTION 20. New Structure and Pattern. Upon approval of this Executive Order, the officers (the term "officer" as used in this Executive Order is intended to be within the meaning of the term "official" as used in the Freedom Constitution) and employees of the Ministry shall, in a hold over capacity, continue to perform their respective duties and responsibilities receive the corresponding salaries and benefits unless in the meantime they are separated from the government service pursuant to Executive Order No.17 (1986) or Article III of the Freedom Constitution.

The new position structure and staffing pattern of the Ministry shall be approved and prescribed by the Minister, for the Ministry, within one hundred twenty (120) days from the approval of this Executive Order and the authorized positions created there under shall be filled with regular appointments by him of by the President as the case may be. Those in incumbents whose position are not included there in or who are not re-appointed shall be deemed separated from the service. Those separated from the service shall receive the retirement benefits to which they may be entitled under existing laws, rules and regulations. Otherwise, they shall be paid the equivalent of one month basic salary for every year of service, or the equivalent nearest fraction thereof favorable to them on the basis of the highest salary received, but in no case shall such payment exceed the


equivalent of 12 months salary.

No court or administrative body shall issue any writ or preliminary injunction or restraining order to enjoin the separation/ replacement of any office or employee effected under this Executive Order.

SECTION 21. Prohibition Against Changes. No changes in the reorganization herein prescribe shall be valid except upon prior approval of the President for the purposes of promoting efficiency and effectiveness in the delivery of public services.

SECTION 22. Implementing Authority of Ministry. The Minister shall issue such orders, rules, regulations and other issuance's as may be necessary to ensure to the effective implementation of the provisions of this Executive Order.

SECTION 23. Notice or Consent Requirements. If any reorganization change herein authorized is of such substance or materiality as to prejudice third person with rights recognized by law or contract such that notice to or consent of creditors is required to be made or obtained pursuant to any agreement entered into with any of such creditors, such notice or consent requirements shall be complied with prior to the implementation or such reorganization change.

SECTION 24. Funding. Funds needed to carry out the provisions of this Executive Order shall be taken from funds available in the Ministry.

SECTION 25. Change of Nomenclature. In the event of adoption of a new Constitution which provides for a presidential form of


government, the Ministry shall be called Department of Transportation and Communication and the titles of Minister, Deputy Minister, and Assistant Minister shall be changed to Secretary, Undersecretary and Assistant Secretary, respectively.

SECTION 26. Separability. Any portion or provision of this Executive Order that may be declared unconstitutional shall not have the effect of nullifying other portion or provisions hereof, as long as such remaining portions or provisions can still subsist and be given effect in their entirety.

REPUBLIC ACT NO. 7471

AN ACT TO PROMOTE THE DEVELOPMENT OF PHILIP-PINE OVERSEAS SHIPPING

SECTION 1. Title. — This Act shall be known and cited as the "Philippine Overseas Shipping Development Act."

SECTION 2. Declaration of Policy. — It is hereby declared the policy of the Government of the Philippines to:

(a) Develop and maintain a Philippine Metropolitan Marine com-posed of well-equipped, safe and modern vessels most suited for, Philippine requirements and conditions, manned by qualified Filipino officers and crew, and owned and operated under the Philip-pine flag by citizens of the Philippines or by associations or corpora-tions organized under the laws of the Philippines, at least sixty per-cent (60%) of the capital of which is owned by citizens of the Philip-pines;


(b) Assist in the development, recovery and expansion of Philip-pine overseas shipping capable of meeting the requirements of the expanding international trade of the Philippines;

(c) Provide assistance to Philippine Shipping enterprises and en-courage the long range vessel acquisition development moderniza-tion and expansion through private investments without direct gov-ernment financial assistance; and

(d) Create a Healthy climate to attract private enterprises.

SECTION 3. Definition. — As used this Act:(a) "Philippine overseas shipping" means the transport of goods

and/or passengers by a ship owned and operated under the Philippine flag by a Philippine shipping enterprise, except when the ship is op-erated solely between ports in the Philippines;

(b) "Philippine shipping enterprise" means a citizen of the Philip-pines or an association or corporation organized under the laws of the Philippines, at least sixty percent (60%) of the capital of which is owned by citizens of the Philippines and engaged exclusively in Philippine overseas shipping;

(c) "MARINA" means the Maritime Industry Authority;(d) "Monetary authority" means the Central Bank of the Philip-

pines and any other agency in charge of foreign exchange controls; and

(e) "Regulation" means the rules and regulations promulgated pursuant to Section 10 hereof.

SECTION 4. Foreign Exchange Requirements. — Foreign ex-change requirements of Philippine Shipping enterprises for the pur-chase of oceangoing vessels for registration under the Philippine flag, for repair or improvement of vessels, for importation of en-


gines, spare parts, accessories, supplies, containers and for other ex-penses required for the operation of vessels in foreign ports or in the high seas, when recommended by the MARINA, shall be made available to the Philippine shipping enterprise subject to the regula-tions.

SECTION 5. Acquisition of Oceangoing Vessels. — Philippine shipping enterprises may likewise acquire oceangoing vessels for Philippine overseas shipping upon approval by the MARINA, sub-ject to the guidelines prescribed in the regulations: provided, that:

(a) The funds utilized in the acquisition of the vessel are financed from sources other than the Philippine banking system;

(b) No guaranty of the monetary authority or of any Philippine government or private financial institution is granted or extended for the purpose;

(c) The vessel serves as sole collateral for the financing of the vessel and no other asset of the Philippine shipping enterprise is pledge, mortgaged, or used as security in case of default;

(d) All foreign exchange requirements for the servicing of the loan, the operation, maintenance and repair of the vessel, the pur-chase of supplies and related equipment shall be financed solely from earnings derived from the operation of the vessel and no for-eign exchange shall be made available by the monetary authority and the Philippine banking system for these purposes;

(e) Mortgage documents and/or other financial agreements shall be filed with the monetary authority and such other government agencies in charge of such mortgage formalities; and

(f) Any excess foreign exchange earning shall be inwardly remit-ted and surrendered to the Philippine banking system.


SECTION 6. Exemption from Import Duties and Taxes. — The importation by a Philippine shipping enterprise of oceangoing ves-sels for registration under the Philippine flag shall be exempt from the payment of import duties and taxes. The spare parts for the repair and/or overhaul of vessels shall likewise be exempt from the pay-ment of import duties and taxes provided, that such items are destined or consigned either to:

(a) A Philippine dry-docking or repair facility, accredited by the MARINA and registered as a customs-bonded warehouse, which will undertake the necessary repairs and works on the vessel; and

(b) The vessel in which the items are to be installed: provided That, if such items are found in locations other than the two (2) aforementioned ones or in places not authorized by customs, the per-son or entity in possession of such items shall be subject to full du-ties and taxes, including surcharges and penalties.

Local manufactures or dealers who sell machinery, equipment, materials and spare parts to a Philippine shipping enterprise shall be entitled to tax credits for the full amount of import duties and taxes actually paid thereon, or on parts or components thereof, subject to the approval of the Secretary of Finance, upon the recommendation of the MARINA.

SECTION 7. Exemption from Income Tax. — A Philippine ship-ping enterprise shall be exempt from payment of income tax on in-come derived from Philippine overseas shipping for a period of ten (10) years from the date of approval of this Act: provided, that:

(a) The entire net income, after deducting not more than ten per-cent (10%) thereof for distribution of profits or declaration of di-vidends, which would otherwise be taxable under the provisions of Title II of the National Internal Revenue Code, is reinvested for the


construction, purchase, or acquisition of vessels and related equip-ment and/or in the improvement of modernization of its vessels and related equipment in accordance with the regulations; and

(b) The cumulative amount so reinvested shall not be withdrawn for a period of ten (10) years after the expiration of the period of in-come tax exemption or until the vessel or related equipment so ac-quired have been fully paid, whichever date comes earlier. Any amount not so invested or withdrawn prior to the expiration of the period stipulated herein shall subject to the corresponding income tax, including penalties, surcharges and interests.

SECTION 8. Registration and Deletion of Vessels. — All vessels owned by Philippine shipping enterprises and availing of the incent-ives under this Act shall be registered under the Philippine flag. Said vessels can only be deleted from the Philippine registry after the MARINA has determined that:

(a) No other Philippine shipping enterprise is interested in ac-quiring the vessel; or

(b) The vessel has to be scrapped.

SECTION 9. Requisition of Vessels. — The President of the Philippines may, in times of war and other national emergency, re-quisition absolutely or temporarily, for any naval or military pur-pose, any and all vessels of the Philippine registry. The Government shall pay the owner or operator of the vessel, based on normal condi-tions at the time of requisition;

(a) The fair market value, if the vessel is taken absolutely, or(b) The fair charter value, if the vessel is taken temporarily. In

case of disagreement, such fair value shall be determined by an arbit-ration committee composed of:

i. One (1) member to be appointed by the MARINA;


ii. One (1) member to be appointed by the owner or operator of the vessel; and

iii. One (1) member to be appointed by the two (2) members so appointed.

The decision of the arbitration committee shall be final and bind-ing on both parties.

SECTION 10. Rules and Regulations. — The MARINA, in con-sultation with the monetary authority and the Department of Finance, shall jointly formulate and promulgate the rules and regulations ne-cessary for the implementation of this Act taking into consideration the policies and programs of the Government for the development of the Philippine overseas shipping.

SECTION 11. Annual Report. — The MARINA, in coordination with the monetary authority and the Department of Finance, shall submit an annual report to the President of the Philippines and the Congress of the Philippines on the implementation of this Act, which report shall include:

(a) The amount of foreign exchange earned, acquired and spent by Philippine shipping enterprises;

(b) The amount of income tax and import duties and taxes for which exemption have been granted;

(c) The additional oceangoing vessels constructed, purchased or acquired, the improvement made thereon and the additional related equipment procured; and

(d) Such other information as the MARINA may deem necessary or the President of the Philippines may require.


SECTION 12. Penal Provisions. — Violation of the provisions of this Act or the rules and regulations promulgated to implement the same shall be punished by a fine of not more than Ten thousand pesos (P10,000) or imprisonment for not more than five (5) years, or both such fine and imprisonment, at the discretion of the court.

If the violation is committed by an association or corporation, the penalties prescribed hereunder shall be imposed on the president the chief executive officer and the other officials and employees re-sponsible for the violation.

If the violation is committed by a government official or em-ployee, he shall, in addition to the penalties prescribed hereunder, be dismissed from the government service with all administrative penal-ties accessory thereto.

SECTION 13. Repealing Clause. — All laws, executive orders, regulations, or parts thereof, inconsistent with the provisions of this Act are hereby repealed, amended or modified accordingly.

Approved: May 5, 1992.


AN ACT BANNING THE REGISTRATION AND OPERA-TION OF VEHICLES WITH RIGHT-HAND STEERING WHEEL IN ANY PRIVATE OR PUBLIC STREET, ROAD OR HIGHWAY, PROVIDING PENALTIES THEREFOR AND FOR OTHER PURPOSES


Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled::

Section 1. It shall be unlawful for any person to import, cause the importation of, register, cause the registration of, use, or operate any vehicle with its steering wheel right-hand side thereof in any high-way, street or road, whether private or public or of the national or lo-cal government except such vehicles that are acknowledged as vin-tage automobiles, manufactured before 1960, in showroom condi-tion, and/or are to be utilized exclusively for officially and legally sanctioned motorsports events, and off-road special purpose vehi-cles.

Section 2. The penalty of prision correccional in its medium pe-

riod and a fine of fifty thousand pesos (P50,000) shall be imposed upon any person violating the provisions of this Act.

Section 3. This Act shall take effect immediately after its com-plete publication in the Official Gazette or in at least two (2) national newspapers of general circulation.

Approved: February 13, 1998


AN ACT REQUIRING THE MANDATORY COMPLIANCE BY MOTORISTS OF PRIVATE AND PUBLIC VEHICLES TO USE SEAT BELT DEVICES, AND REQUIRING VEHICLE MANUFACTURERS TO INSTALL SEAT BELT DEVICES IN ALL THEIR MANUFACTURED VEHICLES


Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled::

Section 1. Short Title. — This Act shall be known as the "Seat Belts Use Act of 1999."

Section 2. Declaration of Policy. — It is hereby declared the pol-icy of the State to secure and safeguard its citizenry, particularly the passengers and drivers of private and public motor vehicles, from the ruinous and extremely injurious effects of vehicular accidents. To-wards this end, the State shall pursue a more proactive and preven-tive approach in order to secure the safety of the passengers and driv-ers at all times with the mandatory enforcement of the use of seat belt devices by the drivers and front seat passengers of private and public motor vehicles.

Section 3. Definition of Terms. — For purposes of this Act, the term:

(a) "Motorist" shall refer to the driver of a motor vehicle. (b) "Seat belt device" shall refer to any strap, webbing or simi-

lar device in the form of pelvic restraint or lap belt, upper torso re-straint or shoulder strap or a combination thereof designed to secure a person in a motor vehicle in order to mitigate the results of any ac-cident, including all necessary buckles and other fasteners, and all hardware designed for installing such seat belt device in a motor ve-hicle.

(c) "Motor vehicle" shall refer to both private and public motor vehicle. The term shall not include the tricycle and motorcycle.

(d) "Private motor vehicle" shall refer to any of the following:(1) Any motor vehicle owned by individuals and juridical per-

sons for private use;


(2) Any motor vehicle owned by the National Government or any of its agencies, instrumentalities or political subdivisions, including government-owned or controlled corporations or their subsidiaries for official use; and

(3) Any diplomatic vehicle. (e) "Public motor vehicle" shall refer to public utility vehicle or

vehicle for hire. (f) "Motor vehicle of running engine" shall refer to a vehicle

as stated herein, operating and standing on any road or thoroughfare with engine running.

(g) "Front seat passengers" shall refer to persons on board a public utility vehicle seated at the right side beside the driver for public utility jeepneys (PUJs) and to passengers seated at the right side beside the driver and those at the first row immediately behind the driver in the case of public utility buses (PUBs) and to passen-gers seated on the right side beside the driver for private motor vehi-cles.

Section 4. Mandatory Use of Seat Belts. — For their own safety, the driver and front seat passengers of a public or private motor vehi-cle are required to wear or use their seat belt devices while inside a vehicle of running engine on any road or thoroughfare: Provided, That for private vehicles, except for jeeps, jeepneys, vans, buses and such other private vehicles as may be determined in the Implement-ing Rules and Regulations (IRR), front and back seat passengers are likewise required to use their seat belt devices at all times.

In the case of public motor vehicles, the driver shall be required to immediately inform and require the front seat passengers upon boarding a vehicle of running engine to wear the prescribed seat


belts. Any passenger who refuses to wear seat belts shall not be al-lowed to continue his/her trip.

For special public service vehicles such as school services and other similar vehicles as may be determined by the IRR, seat belt de-vices should be provided and used by both drivers and front seat pas-sengers as defined herein and the first row passengers immediately behind the driver at all times while inside a vehicle of running en-gine.

Operational motor vehicles, both public and private, which are not equipped with the required seat belt devices, are given one (1) year from the issuance of the IRR by the Land Transportation Office (LTO) to retrofit appropriate seat belt devices in their vehicles.

Section 5. Children Prohibited to Sit in Front Seat. — Infants and/or children with ages six (6) years and below shall be prohibited to sit in the front seat of any running motor vehicle.

Section 6. Coverage. — This Act, in the interest of public safety, shall apply to drivers and front seat passengers of public and private motor vehicles and other vehicles as may be determined by the IRR thereon.

Section 7. Provisions for Seat Belt. — This Act further requires car manufacturers, assemblers and distributors to ensure that seat belt devices are properly installed before the distribution and sale of the said vehicles as determined by the IRR thereon: Provided, That man-ufacturers, assemblers and distributors of jeepneys may install a pelvic restraint or lap belt only in the driver's and front seat passen-


gers' seats and this shall be considered as substantial compliance with the requirements of this Act.

Section 8. Importation. — It shall be unlawful for any person to import or cause the importation of any vehicle without appropriate and operational seat belt devices as required herein and in accor-dance with the IRR thereon.

Section 9. Type of Seat Belt Devices Required. — The seat belt devices required to be installed in all motor vehicles shall comply with the standards and specifications established by the Bureau of Product Standards of the Department of Trade and Industry (DTI) in consultation with the LTO of the Department of Transportation and Communications (DOTC): Provided, That the seat belt devices in-stalled in imported second-hand motor vehicles shall conform to the standards and specifications of the Bureau of Product Standards for purposes of importation and registration.

Section 10. Registration. — No new motor vehicle shall be al-lowed initial registration and succeeding renewal of registration un-less it is equipped with the necessary seat belt devices. Renewal of registration of in-use vehicles without necessary seat belt devices shall not be allowed one (1) year after the passage of the IRR as specified in Section 11 of this Act. For this purpose, the LTO shall include in the implementing guidelines a system of vehicle registra-tion where compliance with Section 4 hereof is required.

Section 11. Period of Implementation. — The LTO shall be the agency primarily responsible in the enforcement and implementation of this Act. Within sixty (60) days from the effectivity of this Act, the LTO shall formulate and issue the necessary implementing rules,


regulations and guidelines and shall mobilize available resources to assure the effective implementation of this Act: Provided, That the LTO or its successor tasked with the implementation of this Act may require the use of special car seats for infants, if it is deemed neces-sary.

Section 12. Penalties and Fines. — In the enforcement of this Act, the LTO shall impose fines against drivers, operators, owners of vehicles, manufacturers, assemblers, importers and/or distributors for violation of this Act.

The following shall be the basis in defining fine and penalty pro-visions of the IRR to be promulgated pursuant to Section 11 hereof, provided that six (6) months grace period shall be allowed to lapse to conduct a nationwide information campaign:

(1) On the driver (a) For failure to wear the prescribed seat belt devices and/or fail-

ure to require his passengers to wear the prescribed seat belt device, a minimum fine of One hundred pesos (P100) but not to exceed One thousand pesos (P1,000) for the first violation; a minimum fine of Two hundred pesos (P200) but not to exceed Two thousand pesos (P2,000) for the second violation; and a minimum fine of Five hun-dred pesos (P500) but not to exceed Five thousand pesos (P5,000) and suspension of driver's license for a period of one (1) week for the third and succeeding violations;

(b) Public utility vehicles shall post appropriate signages instruct-ing front seat

passengers to wear seat belts when inside the vehicle. Non-com-pliance hereof will hold both the driver and the operator liable and shall be fined a minimum of Three hundred pesos (P300) but not to exceed Three thousand pesos (P3,000) for every violation; and

(2) On any manufacturer, assembler, importer and distributor for every unit found without seat belt devices installed prior to its distri-


bution to the public, a minimum fine of Five thousand pesos (P5,000) but not to exceed Ten thousand pesos (P10,000) and sus-pension of the license to manufacture, assemble, import or distribute for a period of one (1) year for the first violation; a minimum fine of Ten thousand pesos (P10,000) but not to exceed Twenty thousand pesos (P20,000) and suspension of the license to manufacture, as-semble, import or distribute for a period of two (2) years for the sec-ond violation; and a fine of Twenty thousand pesos (P20,000) but not to exceed Fifty thousand pesos (P50,000) and suspension of the li-cense to manufacture, assemble, import or distribute for a period of five (5) years for the third violation.

Section 13. Nationwide Public Information Campaign. — (a) The LTO, in coordination with the Philippine Information Agency (PIA) the Department of Education, Culture and Sports (DECS) and private agencies and organizations, shall undertake a regular nation-wide Information, Education and Communication (IEC) campaign for the attainment of the objectives of this Act. The campaign shall stress the safety and health value of seat belts to support the most ef-fective enforcement of this Act.

(b) The LTO, in coordination with the local government units, shall likewise utilize the services of citizen groups and community organizations for the promotion of public safety awareness in obser-vance of this Act.

(c) The fines that will be collected for the enforcement of this Act shall be used exclusively for the implementation of the provi-sions of this Act, including the necessary promotion campaigns for the use of seat belt devices.


Section 14. Separability Clause. — If any provision, or part hereof, is held invalid or unconstitutional, the remainder of the law or provision not otherwise affected shall remain valid and subsisting.

Section 15. Repealing Clause. — Section 34, Article IV of Re-public Act No. 4136 is hereby amended and any law, executive or-der, decree, issuance, ordinance, rule and regulation or any part thereof contrary or inconsistent with the provisions of this Act is also hereby repealed, modified or amended accordingly.

Section 16. Effectivity Clause. — This Act shall take effect fif-teen (15) days after its publication in at least two (2) national news-papers of general circulation.

Approved: August 5, 1999


AN ACT PROMOTING THE DEVELOPMENT OF PHILIP-PINE DOMESTIC SHIPPING, SHIPBUILDING, SHIP RE-PAIR AND SHIP BREAKING, ORDAINING REFORMS IN GOVERNMENT POLICIES TOWARDS SHIPPING IN THE PHILIPPINES AND FOR OTHER PURPOSES.

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

CHAPTER IGENERAL PROVISIONS


SECTION 1. Short Title. - This Act shall be known as the "Do-mestic Shipping Development Act of 2004."

SEC. 2. Declaration of Policy. - The State recognize that ship-ping is a necessary infrastructure, which is vital to the economic de-velopment of our country.

The Philippines needs a strong and competitive domestic mer-chant fleet owned and controlled by Filipinos or by corporations at least sixty percent (60%) of the capital of which is owned by Fil-ipinos and manned by qualified Filipino officers and crew which shall: (a) bridge our islands by ensuring safe, reliable, efficient, ade-quate and economic passenger and cargo services; (b) encourage the dispersal of industry and the economic development of our regional communities by ensuring the availability of regular, reliable and effi-cient shipping services; (c) ensure the growth of exports by provid-ing necessary, competitive and economical domestic sea linkage; (d) serve as a naval and military auxiliary in times of war and other na-tional emergencies; and (e) function as an employment support base for our Filipino seafarers.

To attain these objectives, it is hereby declared to the policy of the State to; (a) promote Filipino ownership of vessels operated un-der the Philippine flag; (b) attract private capital to invest in the ship-ping industry by creating a healthy and competitive investment and operating environment; (c) provide necessary assistance and incen-tives for the continued growth of the Philippine domestic merchant marine fleet; (d) encourage the improvement and upgrading of the existing domestic merchant marine fleet and Filipino crew to meet international standards; (e) ensure the continued viability of domestic shipping operations; and (f) encourage the development of a viable


shipbuilding and ship repair industry to support the expansion and modernization of the Philippine domestic merchant marine fleet and its strict adherence to safety standards which will ensure the seawor-thiness of all sea-borne structures.

SEC. 3. Definition of Terms. - As used in and for purposes of this Act, the following terms, whether in singular or plural are hereby defined as follows:

(a) "Domestic shipping" shall mean the transport of passenger or cargo, or both, by ships duly registered and licensed under Philippine law to engage in trade and commerce between Philippine ports and within Philippine territorial or internal waters, for hire or compensa-tion, with general or limited clientele, whether permanent occasional or incidental, with or without fixed routes, and done for contractual or commercial purposes;

(b) "Domestic trade" shall mean the sale, barter or exchange of goods, materials or products within the Philippines;

(c) "Domestic Ship Operator" or "Domestic Ship Owner" may be used interchangeably and shall mean a citizen of the Philippines, or a commercial partnership wholly owned by Filipinos, or a corporation at least sixty percent (60%) of the capital of which is owned by Fil-ipinos, which is duly authorized by the Maritime Industry Authority (MARINA) to engage in the business of domestic shipping;

(d) "Shipper" shall mean any person, partnership or corporation who shall procure for itself the services of a domestic ship operator for the carriage of its cargo in the domestic trade upon payment of proper compensation;

(e) "MARINA" shall mean the Maritime Industry Authority;(f) "Ship" or "Vessel" may be used interchangeably and shall

mean any kind, class or type of craft or artificial contrivance capable of floating in water, designed to be used, or capable of being used as


a means of water transport in the domestic trade for the carriage of passengers or cargo, or both, utilizing its own motive power or that of another;

(g) "Importation" shall mean the direct purchase, lease or charter of newly constructed or previously owned ships, or the purchase of ship's spare parts from foreign sources or from registered enterprises operating in special economic zones as this terms is defined in Re-public Act No. 7916 entitled, "The Special Economic Zone Act of 1995,"

(h) "Spare parts" shall mean the replacement parts or components of vessel, including but not limited to its hull, engines, machineries, equipment, appurtenances, necessaries accessories, article, supplies, materials, steelplates, aluminum plates, other metal plates, communi-cations, equipment, and other parts or components thereof, installed abroad the ships necessary for its safe and efficient navigation and operation;

(i) "Certificate of Public Convenience' shall mean the license on authority issued by MARINA to a domestic ship operator to engage in domestic shipping;

(j) "Cargo handling equipment' shall mean any machinery, gear or equipment used by the ship operator or a duly authorized and li-censed port operator to service or handle cargo, on board the vessel at the port or in the terminal or container yard such as, but not lim-ited to cranes, forklifts, top lifts, stackers, tractor heads, containers, pallet boards and the like, including all spare parts, replacement parts, appurtenances accessories, articles, supplies and materials thereof;

(k) "Shipbuilding" shall mean the design, construction, launching and outfitting of all types of ships and watercraft;


(l) "Ship repair" shall mean the overhaul, refurbishment renova-tion improvement, or alteration of the hull, machineries, equipment, outfits and components of all types of ships;

(m) "Shipyard" shall mean the shipbuilding or repair facilities which have the capability to lift vessels above the waterline in order to effect ship work on vessels, appendages, structure, machinery and equipment; and

(n) "Shipbuilder" or "Ship repairer" shall mean a citizen of the Philippines, or a commercial partnership owned by majority of Fil-ipinos or a corporation incorporated under the laws of the Philip-pines, the capital of which is owned or controlled in any proportion by Filipinos or by foreign nationals, or by both such Filipinos or for-eign nationals, or by corporations whether Filipino or foreign-owned, which is duly authorized by the MARINA to engage in the business of shipbuilding or ship repair or to otherwise operate a shipyard, graving dock or marine repair yard.

CHAPTER IIINVESTMENT INCENTIVES

SEC. 4. Investment Incentives. - To insure the continued viabil-ity of domestic shipping, and to encourage investments in the domes-tic shipping industry, the following incentives shall be granted to qualified domestic ship operators:

(a) Exemption from value-added tax on the importation and local purchase of passenger and/or cargo vessels of one hundred fifty (150) tons and above, including engine and spare parts of said ves-sels: Provided: That the vessels to be imported shall comply with the age limit requirement at the time of acquisition counted from the date of the vessels, original commissioning, as follows; 1) For pas-senger and/or cargo vessels, the age limit is fifteen (15) years old, 2)


For tankers, the age limit is ten (10) years old, and 3) For high-speed passenger crafts, the age limit is five (5) years old; and

(b) Exemption from value-added tax on the importation of life saving equipment , safety and rescue equipment and communication and navigational safety equipment, steel plates and other metal plates including marine-grade aluminum plates, used for transport opera-tions.

The importation of the articles under Section 4(a) and (b) of the Act shall be granted exemption from value-added tax subject to the following conditions: (1) That said articles are not manufactured do-mestically in sufficient quantity, of comparable quality and at rea-sonable prices; (2) That said articles are directly imported by a MA-RINA-registered domestic shipping operator; (3) That said articles are reasonably-needed and will be used exclusively by the registered domestic shipping operator in its transport operations; (4) That the approval of MARINA was obtained prior to the importation of said articles; and (5) That exemption from value-added tax on the impor-tation of said articles shall be granted to all domestic shipping opera-tors within a period of ten (10) years from the effectivity of this Act.

Any sale, transfer or disposition of articles covered under Section 4 (a) and (b) within ten (10) years from the effectivity of this Act to another registered shipping operator enjoying similar incentive shall require prior approval of MARINA. If the sale, transfer or disposi-tion was made without prior approval of MARINA, both the vendor and the transferee or assignee shall be liable to pay twice the amount of value-added tax exemption given him: Provided, further, That if the sale transfer or disposition was made to nonexempt entity or to a party other than a registered domestic ship operator within ten (10) years from the effectivity of this Act, both the vendor and the trans-feree or assignee shall be solidarily liable to pay twice the amount of the value-added tax waived: Provided, finally. That the sale, transfer


or disposition made after ten (10) years from the effectivity of this Act shall be made by informing MARINA in writing. The pur-chasers, transferees, or recipients shall be considered the importers thereof, who shall be liable for any internal revenue tax on such im-portation. The tax due on such importation shall constitute a lien on the article itself, and such lien shall be superior to all charges or liens on the goods, irrespective of the possessor thereof. The Bureau of In-ternal Revenue (BIR) shall be furnished with notice of actions taken by the MARINA.

(c) Net operating loss carry over. A net operating loss in any tax-able year immediately preceding the current taxable year, which had not been previously offset as a deduction from gross income shall be carried over for the next three (3) consecutive taxable years immedi-ately following the year of such loss subject to the pertinent provi-sions of the National Internal Revenue Code of 1997, as amended.

(d) Accelerated depreciation. Fixed assets my be depreciated as follows:

(i) To the extent of not more than twice as fast as the normal rate of depreciation or depreciated at normal rate of depreciation if the expected life is ten (100 years or less; or

(ii) Depreciation over any number of years between five (5) years and the expected life if the latter is more than ten (10) years, and the depreciation thereon allowed as deduction from taxable Income: Pro-vided, That the domestic shipping operator notifies the BIR at the be-ginning of the depreciation period which depreciation rate allowed by this section will be used.

CHAPTER IIIDEREGULATION OF THE DOMESTIC SHIPPING INDUS-TRY-AUTHORITY OF THE MARITIME INDUSTRY AU-

THORITY


SEC. 5. Authority to Operate. - No franchise, certificate or any other form authorization for the carriage of cargo or passenger, or both in the domestic trade, shall be granted except of domestic ship owners or operators.

SEC. 6. Foreign Vessels Engaged in Trade and Commerce in the Philippines Territorial Waters. - No foreign vessel shall be al-lowed to transport passengers or cargo between ports or place within the Philippine territorial waters, except upon the grant Special Permit by the MARINA when no domestic vessels is available or suitable to provide the needed shipping service and public interest warrants the same.

SEC. 7. Issuance of Authority to operate. - the MARINA shall have the power and authority to issue certificates of public conve-nience to qualified domestic ship operators, taking into consideration the economic and beneficial effect which the proposed services shall have to the port province or region which it proposes to serve, and the financial capacity of the domestic ship operator to provide and sustain safe, reliable, adequate, efficient and economic service in ac-cordance with the standards set by the government regulation.

Every domestic ship operator shall state in its application the route it proposes to serve, and the service it proposes to offer. Do-mestic ship operators who do not intend to operate in a fixed route shall nevertheless state in its application the service it proposes to of-fer.

SEC. 8. Deregulation of the Domestic Shipping Industry. - In order to encourage investments in the domestic shipping industry by existing domestic ship operators and attract new investment from


new operators and investors, domestic ship operators are hereby au-thorized to establish their own domestic shipping rates: Provided, That effective competition is fostered and public interest is served.

The MARINA shall monitor all shipping operations and exercise regulatory intervention where it is established after due process that public interest needs to be protected and safeguarded.

SEC. 9. Safety Standards. - All vessels operate by domestic ship operators shall at all times be in seaworthy condition properly equipped with adequate life-saving, communication, safety and other equipment operated and maintained in accordance with the standards set by MARINA, and manned by duly licensed and competent vessel crew.

The MARINA shall have the power to inspect vessels and all equipment on board to ensure compliance with safety standards.

SEC. 10. Jurisdiction; Power; and Duties of MARINA. - The MARINA shall have the power and authority to:

(1) Register vessels;(2) Issue certificates of public convenience or any extensions or

amendments thereto, authorizing the operation of all kinds. Classes and types of vessels in domestic shipping: Provided, That no such certificate shall be valid for a period of more than twenty-five (25) years;

(3) Modify, suspend or revoke at any time upon notice and hear-ing, any certificate, license or accreditation it may have issued to any domestic ship operator;

(4) Establish and prescribe routes, zones or areas of operations of domestic ship operators;


(5) Require any domestic ship operator to provide shipping ser-vices to any coastal area, island or region in the country where such services are necessary for the development of the area, to meet emer-gency sealift requirements, or when public interest so requires;

(6) Set safety standards for vessels in accordance with applicable conventions and regulations;

(7) Require all domestic ship operators to comply with opera-tional and safety standards for vessels set by applicable conventions and regulations, maintain its vessels in safe and serviceable condi-tions, meet the standards of safety of life at sea and safe manning re-quirements, and furnish safe, adequate, efficient, reliable and proper service at all times;

(8) Inspect all vessels to ensure and enforce compliance with safety standards and other regulations;

(9) Ensure that all domestic ship operators shall have the finan-cial capacity to provide and sustain safe, reliable, efficient and eco-nomic passenger or cargo service, or both;

(10) Determine the impact which any new service shall have to the locality it will serve;

(11) Adopt and enforce such rules and regulations which will en-sure compliance by every domestic ship operator with required safety standards and other rules and regulations on vessel safety;

(12) Adopt such rules and regulations which ensure the reason-able stability of passengers and freight rates and, if necessary, to in-tervene in order to protect public interest;

(13) Hear and adjudicate any complaint made in writing involv-ing any violation of this law or the rules and regulations of the Au-thority;

(14) Impose such fines and penalties on, including the revoca-tions of licenses of any domestic ship operator who shall fail to


maintain its vessels in safe and serviceable condition, or who shall violate or fail to comply with safety regulations;

(15) Investigate any complaint made in writing against any do-mestic ship operator, or any shipper, or any group of shippers regard-ing any matter involving violations of the provisions of this Act;

(16) Upon notice and hearing, impose such fines, suspend or re-voke certificates of public convenience or other license issued, or otherwise penalize any ship operator, shipper or group of shippers found violating the provisions of this Act; and

(17) Issue such rules and regulations necessary to implement the provisions of this Act: Provided, That such rules and regulations can-not change or in any way amend or be contrary to the intent and pur-poses of this Act.

CHAPTER IVRATES

SEC. 11. Rates. - Every domestic ship operator shall have the right to fix its own passenger or cargo rates, or both.

SEC. 12. Government Cargo. - Every domestic ship operator 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.

SEC. 13. Monopolized Routes. - The MARINA shall have the authority to draw up such rules and regulations necessary for service in monopolized routes to determine the fairness of passenger and cargo rates needed to sustain the service taking into consideration the economic and beneficial effect which the service shall have to the port, province, island or region it proposes to serve, the volume of


passengers and cargo available, the level and quality of service of-fered by the ship operator, and the available port facilities and termi-nal handling services.

CHAPTER VCOMPULSORY INSURANCE COVERAGE

SEC. 14. Compulsory Insurance Coverage for Passenger and Cargo. - To meet its financial responsibility for any liability which a domestic ship operator may incur for any breach of the contract of carriage, every domestic ship operator shall be required to submit an-nually the following;

(1) Adequate insurance coverage for each passenger in an amount to be computer in accordance with existing laws, rules and regulations, and the total amount of such coverage shall be equiva-lent to the total number of passenger accommodations being offered by the vessel;

(2) Adequate insurance coverage for cargo in an amount to be computed in accordance with existing laws, rules and regulations, and the total amount of such coverage shall be equivalent to the total cargo capacity being offered by the vessel; and

(3) If a domestic ship operator should offer both passenger and cargo service, then the total insurance coverage shall be in the total sum equivalent to that stipulated in paragraphs (1) and (2) of this section. Provided, That if a domestic ship operator should operate more than one (1) vessels, the amount of insurance coverage re-quired under this section, for purposes of providing financial capac-ity, shall be the amount equivalent to the total number of passenger accommodations, or total cargo capacity, or both, of the largest oper-ating vessel which the domestic ship operator may have: Provided, further, That the total insurance coverage which may be required of


any domestic ship operator shall not exceed the value of such vessel: Provided, finally, that adequate insurance coverage shall be obtained from any duly licensed insurance company or international protec-tion and indemnity association.

SEC. 15. Other Insurance Coverage. - the MARINA shall have the power to require every ship operator to obtain such other com-pulsory insurance coverage necessary to adequately cover claims for damages.

CHAPTER VIPROHIBITED ACT AND PRACTICES

SEC. 16. Prohibited Acts and Practices of Domestic Ship Oper-ators. - the MARINA shall have the power to impose such fines and penalties against every domestic ship operator who shall:

(1) Operate without a valid certificate of public convenience, ac-creditation or other form of authority required by this Act;

(2) Refuse to accept or carry any passenger or cargo without just cause;

(3) Fail to maintain its vessels in safe and serviceable condition, or violate safety rules and regulations;

(4) Fail to obtain or maintain adequate insurance coverage;(5) Fail to meet or maintain safe manning requirements; and(6) Such other acts which the MARINA shall determine, after

due notice and hearing, to be detrimental or prejudice to the safety, stability and integrity of domestic shipping.

CHAPTER VIIFEE, FINES AND PENALTIES


SEC. 17. Fees. - The MARINA shall have the power to impose, fix, collect and receive, in accordance with the schedules approved by its Board, such fees necessary for the licensing, supervision, regu-lation, inspection, approval and accreditation of domestic ship opera-tors and the promotion and development of the country's maritime industry. The MARINA shall have the power to establish and man-age a trust fund for this purpose.

Fees prescribed by the MARINA under this section shall be im-posed and collected in order to recover the cost for rendering the ser-vice and shall not be used in order to impose a penalty on the domes-tic ship operator. Excessive fees, multiple fees and duplicative fees shall at all times be avoided.

The supervision fee provided in Section 40(e) of Commonwealth Act No. 146 insofar as the same applies to the operation, manage-ment, control and regulation of vessels, steamboats, steamship lines, ferries, water craft and the like, is hereby repealed.

SEC. 18. Fines and Penalties. - The MARINA, upon notice and hearing and a determination of the existence of any breach or viola-tion of the provisions of this Act or any rules and regulations issued pursuant thereto, shall have the power and authority to:

(1) Suspend or revoke any certificate of public convenience, li-cense, permit, accreditation, or other form of authority issued to any domestic ship operator who shall violate any provision of this Act or any rules and regulations issued pursuant thereto, or any condition impose on such certificate of public convenience, license, permit or accreditation;


(2) Impose a fine on a domestic ship operator who shall operate without a valid certificate of public convenience, license, permit, ac-creditation or other form of authority;

(3) Impose a fine on a domestic ship operator in an amount to be determined by the MARINA for refusing to accept, or to carry pas-sengers or cargo, without just cause, or for engaging in any prejudi-cial, discriminatory or disadvantageous act towards any class of pas-sengers or shippers;

(4) Impose a fine on any domestic ship operator in an amount to be determined by the MARINA, or suspend or revoke the certificate of public convenience of such domestic ship operator, or both, who shall fail to meet the standards of such safety or who refuses to com-ply with or violates safety regulations imposed by the MARINA or fails to maintain its vessels in safe and serviceable condition;

(5) Impose a fine on any domestic ship operator in an amount to be determined by the MARINA, or impose such other penalty, in-cluding the revocation of any certificate or license, who fails to pro-cure or renew required insurance policies;

(6) Impose a fine on any domestic ship operator in an amount to be determined by the MARINA or impose such other penalty, in-cluding the revocation of any certificate or license who fails to meet or maintain safe manning requirements; and

(7) Impose such other fines and penalties the MARINA may deem necessary and appropriate in order to enforce the provision of this Act.

CHAPTER VIIISHIPBUILDING

Sec. 19. Shipbuilding and Ship Repair Investment Incentives. - To encourage investments and to and ensure the development of a


viable shipbuilding and ship repair industry, the following incentives are hereby granted:

(a) Exemption from value-added tax on the importation of capital equipment, machinery, spare parts, life-savings ang navigational equipment, steel plates and other metal plates including marine -grade aluminum plates to be used in the construction, repair, renova-tion or alteration or any merchant marine vessel operated or to be op-erated in the domestic trade.

The importation of the above articles shall be granted exemption from value-added tax subject to the following conditions: (1) That said articles are not manufactured domestically in sufficient quantity, of comparable quality and at reasonable prices; (2) That said articles are directly imported by a MARINA-registered shipbuilders and ship repairer; (3) That said articles are reasonably needed and will be used exclusively by the registered shipbuilders and ship repairer; (4) That the approval of MARINA was obtained prior to the importation of said articles ; and (5) That shipbuilders and ship repairers may avail of the exemption from value-added tax provided herein within a period of ten (10) years from the approval of this Act.

Any sale, transfer or disposition of articles under Section 19 (a) within ten (10) years from the effectivity of this Act to another regis-tered shipbuilder or repairer enjoying similar incentive shall require prior approval of MARINA. If the sale, transfer or disposition was made without prior approval of MARINA, both the vendor and the transferee or assignee shall be liable to pay twice the amount of the value-added tax exempt given him: Provided, further, That if the sale, tranfer or disposition was made to a nonexempt entity or to a party other than that a registered shipbuilder or repairer within ten (10) years from the effectivity of this Act, both the vendor and the transferee or assignee shall be solidarily liable to pay twice the amount of the value-added tax waived; Provided, finally, That the


sale, transfer or disposition made after ten (10) years from the effec-tivity of this Act shall be made by Informing MARINA in writing. The purchaser, transferees or recipients shall be considered the Im-porters thereof, who shall be liable for any internal revenue tax on such importation. The tax due on such importation shall constitute a lien on the foods superior to all changes or liens on the goods, irre-spective of the possessor thereof. The BIR shall be furnished with notice of actions taken by the MARINA.

(b) Net operating loss carry-over. A net operating loss in any tax-able year immediately preceding the current taxable year, which had not been previously offset as a deduction from gross income shall be carried over as a deduction from gross income for the next three (3) consecutive taxable years immediately following the year of such loss subject to the pertinent provisions of the National Internal Rev-enue Code of 1997, as amemded;

(c) Accelerated depreciation. Fixed assets may be depreciated as follow:

(i) To the extent of not more than twice as fast as the normal rate of depreciation or depreciated at normal rate of depreciation if the expected life is ten (10) years or less; or

(ii) Depreciated over any number of years between five (5) years and the expected life if the latter is more than ten (10) years, and the depreciation thereon allowed as deduction from taxable income. Pro-vided, That the registered shipbuilder and ship repairer notifies the BIR at the beginning of the depreciation period which depreciation rate allowed by this section will be used.

SEC. 20. Restrictions on Vessel Importation. - Ten (10) years from the effective date of this Act and every year thereafter, the MA-RINA shall evaluate and determine the progressive capability of


MARINA- registered shipyards to build and construct new vessels for the domestic trade.

In the first year of evaluation, the MARINA shall determine the capability of MARINA-registered shipyards to build new vessels be-low 500 GRT. If, upon evaluation, the capability of MARINA-regis-tered shipyards to build classed vessels below 500 GRT in quantities sufficient to meet domestic demand is proven, then all domestic ship operators shall be discouraged from importing new or previously owned vessels that are less than 500 GRT for the domestic trade and vessels built in MARINA-registered shipyards shall be given priority for entry in the Philippines Registry and allowed to operate in the do-mestic trade.

The MARINA shall undertake a yearly evaluation of the progres-sive capabilities of all MARINA-registered shipyards to build larger classed vessels for the domestic trade in quantities sufficient to meet the demand of domestic ship owners and shall correspondingly ad-just the size of vessels which may be sourced from MARINA-regis-tered shipyards.

CHAPTER IXTRANSITORY PROVISIONS

SEC. 21. Period of Transition. - Upon the approval of this Act existing liner operators shall continue to operate in their route.

SEC. 22. Classification of Vessels in the Domestic Trade. - A vessels, whether newly built or previously owned, which are ac-quired or after the effectivity of this Act shall be classed by a gov-


ernment recognized classification society on the date of acquisition prior to the operation in the domestic trade.

SEC. 23. Retirement of Old Vessels. - Immediately upon the ap-proved of this Act, the MARINA shall prepare and implement a mandatory vessel retirement program for all unclassed vessels that fail to meet the classification standards of a government-recognized classification society.

All vessels which have attained the maximum vessel age stipu-late by MARINA's mandatory vessel retirement program and which do not carry a class certificate issued by a government-recognized classification society shall not be allowed to operate in the domestic trade and shall be automatically de-listed from the Philippine Reg-istry.

CHAPTER XFINAL PROVISIONS

SEC. 24. Temporary Take-Over of Operations. - In times of na-tional emergency, when the public interest so requires, the State may during emergencies and under reasonable terms prescribed by it, temporary take over or direct the operations or any vessel engaged in domestic trade and commerce, or prescribe its rates or routes of oper-ation. Immediately upon the cessation of the emergency, the State shall immediately reinstate to the domestic ship operation of its ves-sel under the same terms and conditions prior to the occurrence of the emergency.

SEC. 25. 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 declara-tion shall remain in full force and effect.

SEC. 26. Repealing Clause. - The provisions of Commonwealth Act No. 146, insofar as the same applies to the operation, manage-ment control and regulation of vessels, steamboats, steamships, lines, ferries, water craft and the like, as well as the provisions of Presiden-tial Decree No. 474, Executive Order Nos. 125 and 125-A, and such other laws, presidential decrees, executive orders, issuances, rules and regulations or parts thereof, which are inconsistent with the pro-visions of this Act are hereby repealed, amended or modified accord-ingly.

SEC. 27. Effectivity. - This Act shall take effect after fifteen (15) days following its publication in at least two (2) newspapers of gen-eral circulation.

Approved: May 03, 2004.


AN ACT AMENDING CERTAIN PROVISIONS OF REPUB-LIC ACT NO. 7471, ENTITLED "AN ACT TO PROMOTE THE DEVELOPMENT OF PHILIPPINE OVERSEAS SHIP-PING" AND FOR OTHER PURPOSES


Section 1. Section 3(a) of Republic Act No. 7471 is hereby amended as follows:


"SEC. 3. Definitions. As used in this Act:"(a) Philippine overseas shipping means the operation of a

Philippine shipping enterprise in the overseas trade of any type of Philippine registered ship for any kind of shipping operation, which shall include, but shall not be limited to the transport of goods and/or passengers, and the purchase of ships for operation and the sale of ships after operation, except when the ship is operated solely be-tween ports in the Philippines."

Section 2. Section 7 of the same Act is reinstated with amend-ments, to read as follows;

"SEC. 7. Exemption from Income Tax. - a Philippine shipping en-terprise shall be exempt from payment, of income tax on income de-rived from Philippine overseas shipping for a period of ten (10) years from the date of approval of this Act. Provided, that:

"(a) The entire net income, after deducting not more than fifteen percent (15%) thereof for distribution of profits or declaration of div-idends, which would otherwise be taxable under the provisions of Ti-tle II of the National Internal Revenue Code, is reinvested for the construction, purchase, or acquisition of vessels and related equip-ment and/or in the improvement or modernization of its vessels and related equipment in accordance with the regulation; and

"(b) The cumulative amount so reinvested shall not be withdrawn for a period of seven (7) years after the expiration of the period of in-come tax exemption or until the vessel or related equipment so ac-quired have been fully paid, which ever date comes earlier.

"Any amount not so invested or withdrawn prior to the expiration of the period stipulated herein shall be subject to the corresponding income tax, including penalties, surcharges and interests."


Section 3. Section 12 of the same Act is hereby likewise amended to read as follows:

"SEC. 12. Penal Provisions. - Violation of the provisions of this Act or the rules and regulations promulgated to implement the same shall be punished by a fine of not more than One hundred thousand pesos (P100,000.00) or imprisonment for not more than five (5) years or both such fine and imprisonment at the discretion of the court.

"If the violation is committed by an association or corporation, the penalties prescribed hereunder shall be imposed on the president, the chief executive officer and the other officials and employees re-sponsible for the violation.

"If the violation is committed by a government officials or em-ployees, he/she shall, in addition to the penalties prescribed hereun-der, be dismissed from the government service with all the adminis-trative penalties accessory thereto."

Section 4. Repealing Clause. - All laws, decrees, executive or-ders or rules and regulations inconsistent with this Act are hereby re-pealed, amended or modified accordingly.

Section 5. Effectivity. - This act shall take effect after fifteen (15) days following its publication in at least two (2) newspapers of gen-eral circulation.

Approved: July 27, 2004.


AN ACT ESTABLISHING THE MARITIME INDUSTRY AU-THORITY (MARINA) AS THE SINGLE MARITIME ADMIN-ISTRATION RESPONSIBLE FOR THE IMPLEMENTATION


AND ENFORCEMENT OF THE 1978 INTERNATIONAL CONVENTION ON STANDARDS OF TRAINING, CERTIFI-CATION AND WATCHKEEPING FOR SEAFARERS, AS AMENDED, AND INTERNATIONAL AGREEMENTS OR COVENANTS RELATED THERETO


Section 1. Declaration of Policy.—The following are hereby de-clared to be the policies of the State:

(a) The State shall ensure compliance with the 1978 International Convention on Standards of Training, Certification and Watchkeep-ing for Seafarers (STCW Convention), as amended; all international agreements implementing or applying the STCW Convention; and other international maritime safety conventions or agreements that the STCW Convention seeks to promote compliance with;

(b) The State recognizes the vital contribution of the seafarers to the national economy. Toward this end, the State shall establish sys-tems and mechanisms for the promotion and protection of the well-being of the seafarers to ensure their professionalism and competi-tiveness, both in local and international trade, consistent with exist-ing local labor laws and applicable international laws;

(c) The State shall create a single maritime administrative system and structure that shall provide an enabling environment for the busi-ness of Philippine seafaring; establish appropriate institutional ar-rangements with other agencies of government; and create an effec-tive regulatory framework conducive to the efficiency, transparency and competitiveness of the Philippine seafaring industry consistent with the STCW Convention; and


(d) The State shall harmonize all legal and administrative mea-sures which are taken and provided for by government regulatory agencies and ensure that such measures are appropriate and consis-tent with the STCW Convention.

Section 2. Definition of Terms.—As used in this Act, the follow-ing terms shall mean:

(a) Certificate of competency—a certificate issued to masters, of-ficers and Global Maritime Distress and Safety System (GMDSS) ra-dio operators in accordance with the provisions of Chapters II, III, IV or VII of the Annex to the STCW Convention entitling the lawful holder to serve and perform the functions involved at the level of re-sponsibility specified therein.

(b) Certificate of endorsement—an attestation of the maritime administration as to the authenticity and validity of the certificates, incorporated in the format of the certificates issued to masters and officers, stating that the issuance of the relevant certificate is in com-pliance with the requirements of the STCW Convention.

(c) Certificate of proficiency—a certificate other than a certifi-cate of competency issued to a seafarer, stating that the relevant re-quirements of training competencies or seagoing service under the STCW Convention have been met.

(d) Documentary evidence—all the documentation, other than a certificate of competency or certificate of proficiency, used to estab-lish that the relevant requirements of the STCW Convention have been met.

(e) Maritime administration or single maritime administration—the Maritime Industry Authority (MARINA), as the single govern-ment agency mandated to ensure complete and effective implementa-tion of the STCW Convention.


(f) Seafarer—any person who is employed, engaged or works onboard seagoing ships, whether or not such ships are engaged in the domestic or overseas trade, and to whom the STCW Convention ap-plies.

(g) STCW Convention—the 1978 International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, and its subsequent amendments.

Section 3. MARINA as the Single Maritime Administration.—The MARINA, created under Presidential Decree. No. 474, as amended, shall be the single maritime administration mandated to implement and enforce the 1978 International Convention on Stan-dards of Training, Certification and Watchkeeping for Seafarers. It shall carry out an effective regulatory framework conducive to the efficiency, transparency and competitiveness of the Philippine sea-faring industry.

Section 4. Powers and Functions of the MARINA.—In addition to the mandate of the MARINA under Presidential Decree No. 474, as amended, and in order to carry out the provisions of this Act, the MARINA shall exercise the following powers and functions:

(a) Act as the single and central maritime administration for all purposes relating to compliance with the STCW Convention.

(b) Administer and ensure the effective implementation of the STCW Convention; including all international conventions or agree-ments implementing or applying the same, as well as international maritime safety conventions or agreements that it seeks to promote compliance with.

(c) Assume all powers and functions of the Professional Regula-tion Commission (PRC), the Commission on Higher Education (CHED), the Technical Education and Skills Development Authority


(TESDA), the Department of Health (DOH) and the National Telecommunications Commission (NTC) relative to the issuance, validation, verification, correction, revocation or cancellation of cer-tificates of competency, endorsement, proficiency and documentary evidence required of all seafarers and all such other matters pertain-ing to the implementation of the STCW Convention, subject to the following:

(1) The MARINA shall ensure that the examination, licensing and certification system for marine deck and engine officers are in accordance with the requirements prescribed under the STCW Con-vention. All powers, duties and functions of the PRC on examina-tion, licensing and certification system for marine deck and engine officers as provided in Republic Act No. 8544, otherwise known as "The Philippine Merchant Marine Officers Act of 1998", shall henceforth be exercised by the MARINA. The compensation and al-lowances of the Board of Marine Deck Officers and Marine Engine Officers under Article TV, Section 8 of Republic Act No. 8544 shall, however, be comparable to the compensation and allowances being received by the chairpersons and members of other existing regula-tory boards under the PRC and as provided in the General Appropri-ations Act.

(2) The MARINA shall adopt rules and regulations, in accor-dance with the STCW Convention, governing able-bodied deck and engine ratings including:

(i) Monitoring and verification of compliance with the standards of ratings;

(ii) Harmonization of the procedures for periodic evaluation, as-sessment and monitoring activities undertaken by accredited institu-tions with registered programs for ratings; and

(iii) Issuance of certificates of proficiency to ratings.


(3) The MARINA shall ensure that all legal and administrative measures relative to the issuance of certificates of competency of GMDSS radio operators are in accordance with the STCW Conven-tion. For this purpose, the MARINA shall assess, revalidate and is-sue GMDSS radio operator’s certificate in accordance with the pro-visions under the STCW Convention.

(4) The MARINA shall ensure that all maritime education, in-cluding the curricula and training programs, are structured and deliv-ered in accordance with the written programs, methods and media of delivery, procedures, and course materials compliant with interna-tional standards as prescribed under the STCW Convention. For this purpose, the MARINA shall:

(i) Chair the Technical Panel on Maritime Education (TPME) of the CHED; the TPME shall among others, formulate, review and rec-ommend to the CHED en banc all policies, standards, and guidelines for maritime education, including curricula, facilities and guidelines;

(ii) Monitor and verify, in coordination with the CHED, compli-ance with the policies, standards, and guidelines of maritime educa-tion in the conduct of maritime education and training programs;-

(iii) Review and harmonize the procedures for periodic evalua-tion, assessment and monitoring of all maritime education and train-ing institutions in accordance with the standards of the CHED and other recognized international organizations;

(iv) Develop, formulate and recommend for implementation, strict quality assurance mechanisms and relevant typology for mar-itime education programs and institutions;

(v) Recommend to the CHED en banc the closure/phase-out of substandard maritime education institutions, in accordance with the rules and regulations, as well as recommend alternative schemes or options for the affected maritime educational institution;


(vi) Maintain an updated list of compliant and phased-out mar-itime education and training programs, publish such lists in appropri-ate media, and provide the public with a clear understanding of the consequences of enrolling in a phased-out program;

(5) The MARINA shall coordinate with the DOH to ensure that the medical standards established to ascertain the medical fitness of seafarers are in accordance with the international conventions/treaties and existing laws. For this purpose, the MARINA shall:

(i) Ensure that the medical examinations and issuance of medical certificates by the DOH accredited hospitals, medical clinics, and laboratories, including medical practitioners are in accordance with the standards prescribed by the STCW Convention; and

(ii) Ensure that medical certificates are issued by a duly-qualified medical practitioner recognized by and accredited with the DOH, and for this purpose, a register of recognized medical practitioners shall be maintained and made available to seafarers, shipping compa-nies and State parties to the STCW Convention,

Section 5. Composition of the Maritime Industry Board.—To en-sure the proper implementation and enforcement of the STCW Con-vention in relation to international maritime safety and environmen-tal agreements, the Commandant of the Philippine Coast Guard (PCG), in lieu of the Secretary of National Defense, shall be in-cluded as member of the Maritime Industry Board established pur-suant to Presidential Decree No. 474 creating the MARINA. The Maritime Industry Board may create an advisory council that will as-sist the MARINA in ensuring compliance with the STCW Conven-tion, as it may deem proper. The number and members of this coun-cil shall be identified and determined by the Maritime Industry Board.


Section 6. Appropriations.—The Secretary of Transportation and Communications, through, the MARINA, shall immediately include in its programs the operationalization requirement of the STCW Ser-vices, the initial funding of which shall be charged against the sav-ings or current year’s appropriations of the MARINA. Thereafter, such sums as may be necessary for the continued implementation of this Act shall be included in the annual General Appropriations Act.

Section 7. Implementing Rules and Regulations.—The MARINA shall issue the required implementing rules and regulations in accor-dance with the provisions of this Act within six (6) months from the effectivity hereof. In the formulation of such rules and regulations, the MARINA shall ensure that the processes and procedures for is-suance, validation, verification, correction, revocation, or cancella-tion of certificates of competency, endorsement, proficiency arid documentary evidence required of seafarers under the STCW Con-vention shall be the most efficient and convenient way for the seafar-ers including, but not limited to, the establishment of one-stop shop arrangements, computerization and automation, and elimination of redundant fees and charges.

Section 8. Transitory Provisions.—All certificates of compe-tency, endorsement, proficiency and documentary evidence issued prior to the effectivity of this Act shall be deemed valid without ne-cessity of revalidation or reissuance until the date of expiration as stated in such certificates or other documents. Thereafter, new cer-tificates or other documents shall be revalidated or reissued only in accordance with the implementing rules and regulations issued pur-suant to this Act, in conformity with the STCW requirements.


Section 9. Separability Clause.—If for any reason any section or provision of this Act is declared unconstitutional or invalid, the other sections, or provisions hereof not affected by such declaration shall remain in force and in effect.

Section 10. Repealing Clause.—The provisions of Presidential Decree No. 474 on the composition of the Maritime Industry Board and all the provisions under Republic Act No. 8544 relating to the examination, licensing and certification system for marine deck and engine officers are hereby amended. All existing laws, orders, de-crees, rules and regulations or parts thereof inconsistent with the pro-visions of this Act are hereby repealed or modified accordingly.

Section 11. Effectivity Clause.—This Act shall take effect fifteen (15) days from its publication in the Official Gazette or in at least two (2) national newspapers of general circulation.

Approved: March 13, 2014.


Transportation Laws

Documents

carrier of merchandise

bill of lading

bills of lading

contract of transportation

cost of transportation

article of commerce

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cases of transportation