Sei sulla pagina 1di 222

Code of Commerce - Commercial Contracts for Transportation

(Articles 349 to 379)


TITLE VII COMMERCIAL CONTRACTS FOR
TRANSPORTATION
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
commerce.
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
delivered 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


enterprises subject to regulation rate and time schedules, it shall be
sufficient for the bills of lading or the declaration of shipment
furnished by the shipper to refer, with respect to the cost, time and
special conditions of the carriage, to the schedules and regulations
the application 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
transportation 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.
P a g e 2 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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
delivered, 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
provisions 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,
being 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
P a g e 3 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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
occasioned by the examination and that of carefully repacking the
packages 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
ordering the change of consignee the bill of lading signed by the
P a g e 4 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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
fortuitous 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
preceding article if it is proved, as against him, that they arose
through his negligence or by reason of his having failed to take the
precautions 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
nature 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.

P a g e 5 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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
consignee may refuse to receive the latter, when he proves that he
cannot 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
receive them, and he may have them in the hands of the carrier,
demanding 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
distinct and separate pieces and without dividing a single object,
unless the consignee proves the impossibility of conveniently
making use of them in this form.
P a g e 6 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

The same rule shall be applied to merchandise in bales or


packages, separating those parcels which appear sound.
ARTICLE 366. Within the twenty-four hours following the
receipt 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
delivered.
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
differences, the merchandise shall be deposited in a safe warehouse
by order 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,
without any delay or obstruction, the goods which he may have
received, by the mere fact of being named in the bill of lading to
P a g e 7 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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
transportation charges and expenses, or if he refuses to receive the
goods, the municipal judge, where there is none of the first instance,
shall provide for their deposit at the disposal of the shipper, this
deposit producing 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
P a g e 8 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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
accordance 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
respect 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
merchandise to the consignee by virtue of combined agreements or
services 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
transported without reservation.
P a g e 9 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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
expenses 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
P a g e 10 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 COMMERCE
Articles 573 to 579, 585, 589, 591 to 593, 606 to 608 of the Code
of Commerce
P a g e 11 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

ARTICLE 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 order to acquire
ownership.
A captain may not acquire by prescription 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]
Presidential Decree No. 474
PROVIDING FOR THE REORGANIZATION OF MARITIME
FUNCTIONS IN THE PHILIPPINES, CREATING THE
MARITIME INDUSTRY AUTHORITY, AND FOR OTHER
PURPOSES
Section 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;

P a g e 12 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

a. "Maritime Industry", briefly referred to as "industry" in the


broadest concept of the term. All enterprises engaged in the business
of designing, constructing, 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 operated by the Armed Forces of the Philippines and
by foreign governments 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
citizens 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
citizens; 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
P a g e 13 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

enterprise, at least sixty percent 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 transportation.
Section 12(h). Approve the sale, lease or transfer of management
of vessels owned by Philippine Nationals to foreign owned or
controlled enterprises.
Article 574 of the Code of Commerce
ARTICLE 574. Builders of vessels may employ the materials and
follow, with respect to their construction and rigging, the systems
most suitable to their interests. Ship owners and seamen shall be
subject to what the laws and regulations of the public administration
on navigation, customs, health, safety of vessels, and other similar
matters.
ARTICLE 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
time
P a g e 14 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

Article 575 of the Code of Commerce


Refer to Article 1620 of the Civil Code
Article 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
redemption, 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 Commerce
ARTICLE 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.

P a g e 15 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 foreigners 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 instrument shall produce no effect with respect to
third persons if it is not inscribed in the registry of the consulate. The
consul shall immediately 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 receives 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 Filipino, 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.
P a g e 16 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 damage 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 vessel, its rigging, engines, stores, and other
articles shall be appraised, after making an inventory, said
proceedings to be brought to the notice 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 auction 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 governing such cases shall be
observed.
P a g e 17 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

Article 585 of the Code of Commerce


ARTICLE 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 Commerce
ARTICLE 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 resolutions
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 Commerce
ARTICLE 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
P a g e 18 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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, necessary 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 coowners, after a judicial appraisement of the value of the portion 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 public 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
interests, the matter shall be decided by lot.
Articles 606 to 608 of the Code of Commerce
ARTICLE 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 absence of agreement
between the parties, shall be appraised by experts appointed in the
manner established in the law of civil procedure.
P a g e 19 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 4
Common Carriers (n)
SUBSECTION 1
General Provisions
ARTICLE 1732. Common carriers are persons, corporations,
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
P a g e 20 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

safety of the passengers transported by them, according to all the


circumstances of each case.
Such extraordinary diligence in the vigilance over the goods is
further 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 2
Vigilance Over Goods
ARTICLE 1734. Common carriers are responsible 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 article, if the goods are lost,
destroyed or deteriorated, common carriers are presumed to have
been at fault or to have acted negligently, unless they prove that they
observed extraordinary diligence as required in article 1733.
ARTICLE 1736. The extraordinary responsibility of the common
carrier lasts from the time the goods are unconditionally placed in
the possession of, and received by the carrier for transportation until
the same are delivered, actually or constructively, by the carrier to
P a g e 21 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

the consignee, or to the person who has a right to receive them,


without prejudice to the provisions of article 1738.
ARTICLE 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 warehouse 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
proximate 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 incumbent 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.

P a g e 22 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

ARTICLE 1741. If the shipper or owner merely contributed to


the loss, destruction 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 destroyed, the common carrier is not responsible,
provided said public authority had power to issue the order.
ARTICLE 1744. A stipulation 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
rendered by the common carrier; and
(3) Reasonable, just and not contrary to public policy.
ARTICLE 1745. Any of the following or similar 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;
P a g e 23 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

(3) That the common carrier need not observe any diligence in
the custody of the goods;
(4) That the common carrier shall exercise a degree of diligence
less than that of a good father of a family, or of a man of ordinary
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 liability 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 defective
condition of the car, vehicle, ship, airplane or other equipment used
in the contract of carriage.
ARTICLE 1746. An agreement limiting 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 common carrier's liability
cannot be availed of in case of the loss, destruction, or deterioration
of the goods.
ARTICLE 1748. An agreement limiting the common carrier's
liability for delay on account of strikes or riots is valid.

P a g e 24 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

ARTICLE 1749. A stipulation that the common 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 under
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 presumed to have been negligent in
case of their loss, destruction or deterioration.
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 employee. As to other baggage, the rules in articles
1998 and 2000 to 2003 concerning the responsibility of hotelkeepers shall be applicable.
SUBSECTION 3
P a g e 25 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

Safety of Passengers
ARTICLE 1755. A common 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.
ARTICLE 1756. In case of death of or injuries to passengers,
common carriers are presumed to have been at fault or to have acted
negligently, unless they prove that they observed extraordinary
diligence as prescribed in articles 1733 and 1755.
ARTICLE 1757. The responsibility of a common carrier for the
safety of passengers as required in articles 1733 and 1755 cannot be
dispensed with or lessened by stipulation, by the posting of notices,
by statements on tickets, or otherwise.
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
injuries to passengers through the negligence or wilful acts of the
former's employees, although such employees may have acted
beyond the scope of their authority or in violation of the orders of the
common carriers.

P a g e 26 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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.
ARTICLE 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.
ARTICLE 1761. The passenger must observe the diligence of a
good father of a family to avoid injury to himself.
ARTICLE 1762. The contributory negligence of the passenger
does not bar recovery of damages 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 responsible 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 omission.
SUBSECTION 4
Common Provisions
ARTICLE 1764. Damages in cases comprised in this Section
shall be awarded in accordance 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.
P a g e 27 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 prescribed 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.
COMMONWEALTH ACT No. 65
IN 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 ASSEMBLY
WHEREAS, 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;
P a g e 28 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

WHEREAS, the said Act of Congress contains advanced


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 insurance
companies, and various chambers of commerce, which are directly
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
Philippine ports in foreign trade: Provided, That nothing in the Act
shall be construed as repealing any existing provision of the Code of
Commerce 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
P a g e 29 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

for the carriage of goods by sea to or from ports of the United States,
in foreign trade, shall have effect subject to the provisions of the Act.
TITLE I
Section 1. When used in this Act
(a) The term "carrier" includes the owner or the charterer who
enters into a contract of carriage 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 moment at which
such bill of lading or similar document of title regulates the relations
between a carrier and a holder of the same.
(c) The term "goods" includes goods, wares, merchandise, and
articles of every kind whatsoever, except live animals and cargo
which by the contract of carriage is stated as being carried on deck
and is so carried.
(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 discharged
from the ship.
RISKS
Section 2. Subject to the provisions of section 6, under every
contract of carriage of goods by sea, the carrier in relation to the
loading handling, stowage, carriage, custody, care, and discharge of
P a g e 30 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

such goods, shall be subject to the responsibilities and liabilities and


entitled to the rights and immunities hereinafter set forth.
RESPONSIBILITIES AND LIABILITIES
Section 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, refrigerating 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, provided 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
P a g e 31 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 interstate and foreign commerce,"
approved August 29, 1916 (U. S. C. title 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, number, 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
under the contract of carriage, such removal shall be prima facie
evidence 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 damage maybe endorsed upon the receipt
for the goods given by the person taking delivery thereof.
P a g e 32 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 unless 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 delivered
In the case of any actual or apprehended loss or damage the
carrier 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.

P a g e 33 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

(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 favor 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 chambers, 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 damage has resulted from unseaworthiness, the
burden of proving the exercise of due diligence shall be on the
carrier or other persons claiming 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
servants 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 carrier;
(c) Perils, dangers, and accidents of the sea or other navigable
waters;
P a g e 34 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

(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 lockouts 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.

P a g e 35 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

(4) Any deviation in saving or attempting 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 deviation is for the
purpose of loading cargo or unloading cargo or passengers 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 customary 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 declaration, if embodied in the bill of lading, shall be
prima facie evidence, but shall not be conclusive on the carrier.
By agreement between the carrier, master, or agent of the carrier,
and the shipper another 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 shipper 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
P a g e 36 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 compensation, and the
shipper of such goods shall be liable for all damages 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 innocuous by the
carrier without liability on the part of the carrier except to general
average, if any.
SURRENDER OF RIGHTS AND IMMUNITIES AND
INCREASE OF RESPONSIBILITIES AND LIABILITIES
Section 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 issued 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 CONDITIONS
Section 6. Notwithstanding the provisions of the preceding
sections, a carrier, master or agent of the carrier, and a shipper shall,
in regard to any particular goods be at liberty to enter into any
P a g e 37 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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
regard 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
document and shall be marked as such.
Any agreement so entered into shall have full legal effect:
Provided, That this section shall not apply 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 responsibility 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
P a g e 38 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 II
Section 9. Nothing contained in this Act shall be construed as
permitting a common carrier by water to discriminate between
competing shippers similarly place in time and circumstances, either
(a) with respect to the right to demand and receive bills of lading
subject to the provisions 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 carriage of goods by sea, such bill
of lading shall be subject to the provisions of the Carriage of Goods
by Sea Act."
Section 11. Where under 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, notwithstanding 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
P a g e 39 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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," approved February
13,1893, or of any other law which would be applicable 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 foreign 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 transportation to or
from ports of the Philippine Islands. The term "foreign 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 between 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, containing 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
P a g e 40 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 rescind 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 suspension shall take effect on a date named
therein, which date shall be not less than ten days from the issue of
the proclamation.
Any contract 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 period 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
P a g e 41 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

issued, 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.
REPUBLIC ACT No. 1407
AN ACT TO BE KNOWN AS "THE PHILIPPINE OVERSEAS
SHIPPING ACT OF NINETEEN HUNDRED AND FIFTYFIVE."
Section 1. Declaration of policy. Shipping commands a
transcendental position in the economic development and growth of
a nation. One of the urgent needs of the Philippines is a wellbalanced Philippine merchant marine (a) sufficient 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 under the Philippine
flag by citizens of the Philippines, or by 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, and (d)
composed of the best equipped, safest and most suitable types of
modern vessels, and manned with trained and efficient 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 international
trade; (b) to foster the development and encourage the maintenance
of such a Philippine merchant marine; (c) to provide financial aid
and assistance in long-range ship-building program, and at all times,
P a g e 42 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

to promote shipping in such other respects as may be required to


attract private capital and enterprise to the shipping industry and
create a healthy climate to attract private enterprise to invest in the
overseas transportation; and (d) to do whatever may be necessary,
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 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 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 payment of income tax on income derived from his or its
shipping business 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
National Treasury not otherwise appropriated or from loans which
may be contracted either locally or abroad for the purpose, by the
National Development Company through an agency of the Philippine
P a g e 43 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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
citizens, 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 contract to purchase such vessels; to make from the said
sums the loans referred to above; to make or cause to be made
studies and investigations of the person or entity applying for the
loan of the shipping service 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 acquisition 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
exceed seventy-five per cent of the cost of the vessels: Provided,
P a g e 44 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

further, 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 without 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 mortgaged to secure any loan made pursuant to
this Act; to pay the purchase price and any costs and expenses
incurred in connection therewith from the sums authorized in section
three of this Act; to accept title to any vessel, including all its
property and equipment, certificate 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 protect the investment therein;
and to sell such vessel and all its property, 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 Philippines, or
associations or corporations organized under the laws of the
P a g e 45 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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.
Section 8. For the purpose of making the studies and
investigations herein provided for, the National Development
Company may request and utilize, with the approval of the proper
heads of departments, free of charge, such services of national
officers and employees and of officers and employees of any
government-owned or controlled corporation as are available, and
such services shall be considered 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 Development Company, one by the person
P a g e 46 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

whose vessel has been taken, and a third by the two so appointed.
The finding of such appraisers 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 foreign 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
Philippine registry for the purchase of vessels, repair and
improvement, engines, 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 special 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.

P a g e 47 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

Section 13. All laws, executive orders and regulations, or parts


thereof, which are inconsistent with this Act are hereby repealed.
Section 14. This Act shall take effect upon its approval.
Approved: September 9, 1955.
REPUBLIC ACT No. 4136
AN ACT TO COMPILE THE LAWS RELATIVE TO LAND
TRANSPORTATION AND TRAFFIC RULES, TO CREATE A
LAND TRANSPORTATION COMMISSION AND FOR
OTHER PURPOSES
CHAPTER I
PRELIMINARY PROVISIONS ARTICLE
ARTICLE I
Title and Scope of Act
Section 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 II
Definitions
Section 3. Words and phrases defined. - As used in this Act:
P a g e 48 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

(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 purposes.
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 automobiles" shall mean all pneumatic-tire
vehicles of types similar to those usually known under the following
terms: touring car, command car, speedster, sports car, roadster, jeep,
cycle, car (except motor wheel and similar small outfits which are
classified with motorcycles), coupe, landaulet, closed car, limousine,
cabriolet, and sedan.
Motor vehicles with changed or rebuilt bodies, such as jeepneys,
jitneys, or station wagons, using a chassis of the usual pneumatic-tire
passenger automobile type, shall also be classified as passenger
automobile, if their net allowable carrying capacity, as determined by
the Commissioner of Land Transportation, does not exceed nine
passengers and if they are not used primarily for carrying freight or
merchandise.
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
compartments 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.
P a g e 49 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

(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 vehicle. Such a trailer
shall be called as "semi-trailer."
(d) "Driver" shall mean every and any licensed operator of a
motor vehicle.
(e) "Professional 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 registered 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
corporation 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.
P a g e 50 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

(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 Transportation.
(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 representatives, deputies, or assistants as he
may, with the approval of the Secretary 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 shoulder 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 culture.
ARTICLE III
Administration of Act
Section 4. Creation of the Commission. P a g e 51 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

(a) There is created under the Department of Public 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
"Commissioner" is used in this Act, it shall be taken to mean the
Commissioner 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 Motor 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 receive 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 executive 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 regulation
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
directors who shall receive an annual compensation of eight
P a g e 52 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

thousand four hundred pesos each and eight land transportation


assistant regional directors, who shall receive an annual
compensation of seven thousand pesos each and ten assistant
regulation chiefs, who shall receive an annual compensation of seven
thousand pesos each.
(d) The Commission shall have its offices in Quezon City where
the present Motor Vehicle Office is located, and shall establish a
regional branch office 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 director who will have immediate administration,
supervision and control over activities and administration of the
Commission in the respective regions.
The Commissioner shall be responsible for the administration of
this Act and shall have, in connection therewith, the following
powers and duties, in addition to those mentioned elsewhere 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, permits
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,
P a g e 53 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

suspensions, revocations, or judgments of conviction rendered by


competent 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 interested therein.
(3) To give public notice of the certificates, permits, licenses and
badges issued, suspended or revoked and/or motor vehicles
transferred and/or drivers bonded under the provisions of this Act.
(4) The Commissioner of Land Transportation, with the approval
of the Secretary of Public Works and Communications, may
designate as his deputy and agent any employee of the Land
Transportation 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
conductors; and to use all reasonable means within their powers to
secure enforcement of the provisions of this Act.
(6) The Commissioner of Land Transportation or his deputies
may at any time examine 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 provisions hereof within their respective jurisdiction:
P a g e 54 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 disposition, 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 concerned.
CHAPTER II
REGISTRATION OF MOTOR VEHICLES
ARTICLE I
Duty to Register, Reports, Applications, Classifications
Section 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 hereunder
shall become delinquent and invalid:
1. For hire motor vehicles - on or before the last working day of
February.
P a g e 55 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 Vehicles 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 require dealers to furnish him with such information and reports
concerning the sale, importation, manufacture, number of stocks,
transfer or other transactions affecting motor vehicles as may be
necessary 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
replacing 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
explained 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, attachments, 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, attachment and/or
other encumbrances.
P a g e 56 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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" referring to the creation,
cancellation or foreclosure of the aforesaid mortgages, attachments
or to other encumbrances.
The Land Transportation Commission shall collect a fee of five
pesos for every annotation of a mortgage, attachment and/or other
encumbrances, or cancellation thereof.
Section 6. Application and payments for registration. Applications and payments for registration shall be made either
personally or by registered mail, and the date of the cancellation 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 registered under one of the following described
classifications:
(a) private passenger automobiles;
(b) private trucks; and
(c) private motorcycles, scooters, or motor wheel attachments.
Motor vehicles registered under these classifications shall not be
used for hire under any circumstances 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
P a g e 57 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 purpose of this section, a vehicle habitually used to carry
freight not belonging 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-calesas;
(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 classification are intended
to cover generally and successively all the motor vehicles imported
or handled by dealers for sale. Motor vehicles registered 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
P a g e 58 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 prospective
purchaser or for test or demonstration.
(m) Government automobiles;
(n) government trucks; and
(o) government motorcycles. Motor vehicles owned by the
Government of the Philippines or any of its political subdivisions
shall be registered under these classifications. Motor vehicles owned
by government corporations, by government employees or by
foreign governments shall not be registered under this classification.
(p) Tourists bringing their own motor vehicles to the Philippines
may, without registering such motor vehicles, use the same during
but not after ninety 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 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 II
Registration Fees
P a g e 59 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

Section 8. Schedule of registration fees. - Except as otherwise


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) Private 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
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
vehicles weight: Provided, furthermore, That the increase registration
fees herein prescribed shall not apply to jeeps and jeepneys for
private use or for hire and the fees hereof shall be those prescribed
for them before the approval of this Act.
The registered passenger capacity of passenger automobiles
operated for hire or for private use shall be determined as follows:
1. For each adult passenger, a horizontal 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
centimeters wide by sixty centimeters long, provided, that each
continuous row of seats shall not be allowed to have more that onehalf passenger.
P a g e 60 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

(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 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 motor vehicles for hire shall be
sixty percent 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
corresponding 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.
P a g e 61 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

(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 registration fees
provided in this Act, but shall each pay an annual recording and
service 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
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 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 Communications, suitable tables of maximum
allowable loads per wheel for different sizes kinds of tires.
(k) The registration 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.
P a g e 62 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 promulgate, from time to time, as the
conditions of the public highways may warrant and the needs of the
service may require.
Permissible maximum weights:
1. Per most
wheel

heavily

loaded three thousand


kilograms;

2. Per most heavily loaded axle

six

hundred

eight thousand kilograms;

3. Per most heavily loaded axle fourteen thousand five hundred

group (the two axles of the kilograms.


group being at least one
meter and less than two
meters apart)
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 authority 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
P a g e 63 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

Overall length:
Freight vehicles with two axles ten meters
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. Special permits, fees for. - The Commissioner with
the approval of the Secretary of Public Works and Communications,
shall issue regulations 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 dimensions 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
P a g e 64 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 invalid.
In case of request in writing for certification of data or facts
involving 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 payment 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 III
P a g e 65 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

Registration Certificates, Records, Number Plates


Section 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 authority of certificate of registration.
(a) The said certificate shall be preserved and carried in the car
by the owner as evidence of the registration of the motor vehicle
described therein, and shall be presented 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 revoked, be the authority for
the operation of such motor vehicle.
(c) No motor vehicle shall be operated on the public highways in
a manner which would place it under a classification requiring the
payment of a larger registration fee than that stated in the certificate
of registration.
Section 16. Suspension of registration certificate. - If on
inspection, as provided in paragraph (6) of Section four hereof, any
motor vehicle is found to be unsightly, unsafe, overloaded,
improperly marked or equipped, or otherwise unfit to be operated, or
capable 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
P a g e 66 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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
violations 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 exceeding ninety days and, thereupon, shall require the
immediate surrender of the number plates.
Whenever a motor vehicle is found to be underweight the owner
thereof shall pay the difference in the registration 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 vehicle
concerned for one year may be denied.
The Commissioner shall notify the owner of the motor vehicle of
any action taken by him under this section.
Section 17. Number plates, preparation, preparation 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
P a g e 67 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

numerals indicating the year of registry: Provided, 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 designed and
painted with different colors to distinguish one class from another:
Provided, furthermore, That the plates of motor vehicles exempted
from payment of registration fees shall be permanently assigned to
such motor vehicles during their entire lifetime while exempted 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 number plates shall be kept clean and cared for, and shall be
firmly affixed to the motor vehicle in such a manner as will make it
entirely visible and always legible.

P a g e 68 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 motor
vehicle after its sale and delivery to a purchaser.
CHAPTER III
OPERATION OF MOTOR VEHICLE
ARTICLE I
License to Drive Motor Vehicles
Section 19. Duty to procure license. - Except as otherwise
specifically provided in this Act, no person shall operate any motor
vehicle without first procuring a license to drive a motor 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. License for enlisted men operating Government
motor vehicles. - Enlisted 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 therefrom. All licenses so issued shall bear the
P a g e 69 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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. Operation of motor vehicles by tourists. - Bona fide
tourist and similar transients who are duly licensed to operate motor
vehicles in their respective countries may be allowed to operate
motor vehicles during but not after ninety days of their sojourn in the
Philippines.
If any accident involving such tourist or transient occurs, which
upon investigation 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 vehicle.
After ninety days, any tourist or transient desiring to operate
motor vehicles shall pay fees and obtain and carry a license as
hereinafter 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 license 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, gonorrhea, syphilis, and the
like.
P a g e 70 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

Each such application except in the case of enlisted men


operating government-owned vehicles, shall be accompanied 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 effect, signed by a reputable physician.
An examination or demonstration 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
examination, the Commissioner or his deputy believes that the
applicant possesses the necessary qualifications and is proficient in
the operation of motor vehicles, a license shall be issued to such
applicant upon payment of five pesos, but prior to the issuance of
said license, the applicant shall furnish three copies of his recent
photograph 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
P a g e 71 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

secure from the Commissioner, 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 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.
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 invalid, 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.

P a g e 72 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

Every applicant for renewal of license to operate any motor


vehicle shall present to the Commissioner, in person 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-recognized
photograph of the applicant, which photograph shall have been taken
not exceeding three years prior to the date of applicant for renewal.
Lost license. - In case the license for the previous year has been
lost or cannot be produced, the applicant shall obtain a duplicate 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
discretion 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 license.
(a) The Commissioner may suspend for a period not exceeding
three months or, after hearing, revoke any driver's license issued
under 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
operating or using a motor vehicle in, or as an accessory to, the
commission 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
P a g e 73 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

the provisions of this Act: Provided, That such suspension may be


appealed to the Commissioner 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 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 exceeding two years.
(c) The license suspended or revoked under the provisions of
subsections (a) and (b) of this section shall not be reinstated unless
the driver has furnished a bond in accordance with Section twentynine 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 refusing the
reinstatement of a license under the provisions of this Section may
be appealed to the Secretary of Public Works and Communications.
Section 28. Driver's bond. - The Commissioner 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 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
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,
however, That upon written application to the Commissioner for
P a g e 74 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

release from such a bond, the Commissioner may after revoking or


suspending the driver's license, authorize the release of the
bondsmen 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. Confiscation 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 receipt shall not be extended, and
shall become invalid thereafter. Failure 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
issue student-driver's permits, valid for six months to persons not
under eighteen years of age, who desire to learn to operate motor
vehicles. No application for driver's license shall be received unless
P a g e 75 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

the applicant has undergone instruction in the operation of motor


vehicles for at least a month and has a valid student-driver's permit:
Provided, however, That any person who has a license to operate
vehicles in other countries may, upon presentation of appropriate
evidence 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 additional 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 liable 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 II
Illegal 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, certificate, plate, tag or permit, or with
intent to sell or otherwise dispose of the same to another. No person
shall falsely 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 revoked or
suspended.
P a g e 76 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 III
Passenger and Freight
Section 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
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 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.
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 Commissioner: 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 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
endanger the passengers or stability of the truck.
P a g e 77 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

(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 motor 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 numerals not less than five centimeters in height.
ARTICLE IV
Accessories of Motor Vehicles
Section 34.
(a) Tires of motor vehicles. - No motor vehicle with metallic tires
shall be operated upon any public 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 braking 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
P a g e 78 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 whistle of a type approved by the
Commissioner, and no such device shall be installed or used in any
other vehicle.
No vehicle not classified as a motor vehicle under this Act shall
be equipped with a horn or signaling device similar to the horn
customarily used on motor vehicles.
(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 visible
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 vehicles 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
P a g e 79 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

beams downward whenever the vehicle is being operated on welllighted streets within the limits of cities, municipalities, and thickly
populated barrios or districts, or whenever 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 vehicle 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 sustained bright red
light visible under all conditions, even under bright sunlight, when
the brakes are applied. Each bus, truck, trailer or similar vehicle shall
be equipped, as its stop light at or near its rear center, 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, except 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 motor vehicle, or whatever style, kind, make, character, or
nature, when upon a highway during the hours above-mentioned,
whether in motion 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 parking lights
or flares visible one hundred meters away shall be displayed at a
corner of the vehicle whenever such vehicle is parked on highways
P a g e 80 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 vehicle 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 displayed, in lieu of
the required red flags, red lights visible at least fifty meters away.
(j) Mufflers. - Every motor vehicle propelled by an internal
combustion engine shall be equipped with a muffler, and whenever
said motor vehicle passes through a street of any city, municipality,
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
disagreeable odor, smoke or noise.
CHAPTER IV
TRAFFIC RULES
ARTICLE I
Speed Limit and Keeping to the Right
Section 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
P a g e 81 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

a speed greater than will permit him to bring the vehicle to a stop
within the assured clear distance ahead.
(b) Subject to the provisions of the preceding paragraph, the rate
of speed of any motor vehicle shall not exceed the following:
MAXIMUM
ALLOWABLE
SPEEDS

Passengers
Cars and
Motorcycle

Motor trucks and


buses

1. On open country 80 km. per hour


roads,
with
no
"blinds corners" not
closely bordered by
habitations.

50 km. per hour

2.
On
"through 40 km. per hour
streets"
or
boulevards, clear of
traffic, with no "
blind corners," when
so designated.

30 km. per hour

3. On city and 30 km. per hour


municipal
streets,
with light traffic,
when not designated
"through streets".

30 km. per hour

4. Through crowded 20 km. per hour


streets, approaching
intersections
at

20 km. per hour

P a g e 82 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

"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 responds 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
treatment 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 motor 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
P a g e 83 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

ordinance or resolution specifying maximum allowable speeds other


than those provided in this Act.
Section 37. Driving 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 compliance herewith, every person
operating a motor vehicle or an animal-drawn vehicle on a highway
shall pass to the right when meeting persons or vehicles coming
toward him, and to the left when overtaking 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 highway.
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
Commissioner. 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 II
Overtaking and Passing a Vehicle, and Turning at Intersections
Section 39. Overtaking a vehicle. - The driver of any motor
vehicle overtaking another 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
P a g e 84 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 overtaking or passing to be made in safety.
(b) The driver of a vehicle shall not overtake or pass another
vehicle proceeding in the same direction, 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.
P a g e 85 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

(c) The driver of a vehicle shall not overtake or pass any other
vehicle proceeding in the same direction, at any railway grade
crossing, 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
overtaking 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 overtake or pass, or attempt
to pass, any other vehicle, proceeding in the same direction, between
any points indicated by the placing of official temporary warning or
caution signs indicating that men are working on the highway.
(e) The driver of a vehicle shall not overtake or pass, or attempt
to overtake or pass, any other vehicle proceeding in the same
direction in any "no-passing or overtaking zone."
ARTICLE III
Right of Way and Signals
Section 42. Right of way.
(a) When two vehicles approach or enter an intersection at
approximately 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 unlawful speed shall forfeit any right of way which he might
otherwise have hereunder.
(b) The driver of a vehicle approaching but not having 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
P a g e 86 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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, except 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
instead 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 private
road or drive shall yield the right of way to all vehicles approaching
on such highway.
(b) The driver of a vehicle upon a highway 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 intersection" shall yield the right of way to all vehicles
approaching to either direction on such "through highway":
Provided, That nothing in this subsection shall be construed as
relieving the driver of any vehicle 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
P a g e 87 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 pedestrian 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 movement, shall
give a signal plainly visible to the driver of such other vehicles of the
intention to make such movement.
(b) The signal herein required shall be given by means of
extending the hand and arm beyond the left side of the vehicle, or by
an approved mechanical or electrical signal device.
ARTICLE IV
Turning and Parking
Section 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
P a g e 88 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 medial 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 V
Miscellaneous Traffic Rules
P a g e 89 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

Section 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
vehicle, 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
highway, 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 motor 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 person 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.

P a g e 90 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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. Obstruction 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 concerned in a vehicular accident
shall leave the scene of the accident without aiding the victim, except
under any of the following circumstances:
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 V
PENAL AND OTHER PROVISIONS
ARTICLE I
P a g e 91 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

Penalties
Section 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 registration fee than that for which it was
originally registered, or for renewal of a delinquent registration, 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 complied with.
(h) Violations of Sections forty-nine, fifty and fifty-two, a fine
not exceeding fifty pesos.
P a g e 92 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

(i) For making, using or attempting to make or use a driver's


license, badge, certificate or 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, certificate, plate, tag or
permit or with intent to sell or otherwise dispose 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 imprisonment 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 violation 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.
P a g e 93 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

(n) If, as the result of negligence or reckless 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 Revised 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 committed
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 violation 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.
ARTICLE II
Collection of Fees, Taxes and Fines, Liens, Allotment of Funds
Section 59. (a) Collection of fees; national and local taxes; toll
fees. - The collection of all fees, taxes, and fines, under the
provisions of this Act shall be made in accordance with regulations
to be prescribed by the Commissioner and approved jointly by the
Auditor General.
P a g e 94 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

(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 chauffeur,
by any municipal corporation, the provisions of any city charter to
the contrary notwithstanding: Provided, however, That any
provincial 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 jurisdiction, as may be authorized and approved by the
Secretary of Public Works and Communications, and also for the use
of such public roads, as may be authorized by the President of the
Philippines upon recommendation of the Secretary of Public Works
and Communications, 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, remaining unpaid and all fines imposed upon any vehicle
owner, shall constitute a first lien upon the motor vehicle concerned.
The Commission 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, reregistration or delinquent registration 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 attachment or execution is under
any judicial process. Any owner who fails or refuses to surrender any
of such property or vehicle not so surrendered shall be punished by a
fine not exceeding the amount of the fees (including penalties and
P a g e 95 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

interests, if any) for the collection of which such warrant has been
issued, together with the costs and interests, 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 provisions 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 III
Final Provisions
Section 62. No provincial board, city or municipal board or
council shall enact or enforce any ordinance or resolution 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 ordinances. - 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
P a g e 96 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 appropriated out of the fees collected under this Act,
in addition to the appropriations provided in the General
Appropriations Act, for the expense 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 appropriations 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
application thereof to any person or circumstance is held invalid, the
remainder 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
P a g e 97 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

AN ACT AMENDING REPUBLIC ACT NUMBERED ONE


THOUSAND FOUR HUNDRED SEVEN, AS AMENDED, TO
PRESCRIBE THE RULES FOR FINANCING THE
ACQUISITION 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
provision known as Section 11 , which shall read as follows:
"Sec. 11 . 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
encumbrance on such vessels and its equipment with any bank or
other financial 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
instrument;
4.
The interest in the vessel transferred or
affected; and
5.
The amount and date of maturity of any
P a g e 98 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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
provisioning 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
executed, 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
P a g e 99 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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
hundred six, as amended by Republic Act Numbered Nine hundred
thirteen; the Code of Commerce, particularly Articles 580 and 584
thereof; and all other Acts, Executive Orders and regulations
inconsistent herewith are hereby repealed or modified accordingly.
Sec. 3. This Act shall take effect upon its approval.
Approved: August 4, 1969.
REPUBLIC ACT NO. 6374
AN ACT AMENDING REPUBLIC ACT NUMBERED FORTYONE HUNDRED THIRTY-SIX, KNOWN AS THE "LAND
TRANSPORTATION AND TRAFFIC CODE"
Section 1. Paragraph (a) and (c) of Section four of Republic 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 designated and
known as the Land Transportation Commission, composed of one
Commissioner and one Deputy Commissioner, who shall be vested
P a g e 100 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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
"Commissioner" is used in this Act, it shall be taken to mean the
Commissioner or Deputy Commissioner, as the case may be.
"(c) The Commissioner 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 registration regulation chief, one
inspection, examination and licensing regulation 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 officer 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 directors who shall receive an annual
compensation of fourteen thousand five hundred thirty-two pesos
each; ten transportation assistant regional directors, who shall
receive an annual compensation of eleven thousand three hundred
twenty-eight pesos each; and ten land transportation 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
P a g e 101 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

eight thousand eight hundred thirty-two pesos each; the land


transportation 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 collected
under the provisions 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 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
collections 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.
P a g e 102 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 DECREE No. 98
REGULATING THE ISSUANCE OF LICENSE PLATES OF
ALL MOTOR VEHICLES
To 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 Proclamation No. 1081 dated September 21, 1972
and General Order No. 1 dated September 22, 1972, as amended, do
hereby order and decree:
Section 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
vehicles shall bear plates so designed and reflectorized with different
colors as to distinguished one class from another.
P a g e 103 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 motor vehicle.
Section 4. Republic Act No. 4136 is hereby amended
accordingly 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. 109
MODIFYING PRESIDENTIAL DECREE NO. 98
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 Proclamation No. 1081 dated September 21, 1972 and
General Order No. 1 dated September 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 follows:
Section 1. Effective January 1, 1974, the Land Transportation
Commission 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
P a g e 104 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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. 760
ALLOWING THE TEMPORARY REGISTRATION OF
FOREIGN-OWNED VESSELS UNDER TIME CHARTER OR
LEASE TO PHILIPPINE NATIONALS FOR USE IN THE
PHILIPPINE COASTWISE TRADE SUBJECT TO CERTAIN
CONDITIONS
WHEREAS, in the interest of the national economy, it is
imperative that Philippine domestic shipping be expanded to meet
the ever-increasing 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 domestic
shipping, it is necessary to temporarily relax certain aspects of the
P a g e 105 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

restrictive and constrictive legal framework under which vessels 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 Section 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, further, 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 directly protect his rights as owner thereof:
Provided, finally, That the registered vessel shall be manned
completely by a Filipino crew, except 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 President of the Republic of the
Philippines.

P a g e 106 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 protection of Philippine law so long as its
temporary certificate of registration is valid and subsisting.
Correspondingly, the vessel shall also be subject to all requirements,
limitations and all the duties and obligations imposed upon vessels of
Philippine registry.
Section 3. The Maritime Industry Authority shall promulgate the
rules and regulations, together with the procedures and guidelines,
for the implementation of this Decree, subject to approval by the
Office of the President.
Section 4. Any provision of law, decree, executive order, or rules
and regulations inconsistent with this Decree is hereby repealed,
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. 761
AMENDING SECTION EIGHT HUNDRED SIXTY OF THE
TARIFF AND CUSTOMS CODE OF THE PHILIPPINES, AS
AMENDED, BY ALLOWING THE REGISTRATION OF
VESSELS THE OWNERSHIP OF WHICH IS VESTED IN
CORPORATIONS OR ASSOCIATIONS, AT LEAST SIXTY
PERCENT OF THE CAPITAL STOCK OR CAPITAL OF
P a g e 107 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

WHICH BELONG TO CITIZENS OF THE PHILIPPINES,


AND FOR OTHER PURPOSES
Section 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 certificate of Philippine registry shall be issued for it. If the vessel
is of domestic 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 directors 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 Philippine 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
P a g e 108 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 service 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 obligation 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 association 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 ownership"
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
Investments and certified to by said Board as an essential element in
the operation of the registered project.
P a g e 109 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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, licenses 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 modified accordingly.
Section 6. This Decree shall take effect immediately.
Approved. July 31, 1975.
PRESIDENTIAL DECREE No. 843
AMENDING REPUBLIC ACT NO. 4136, AS AMENDED,
OTHERWISE KNOWN AS THE LAND TRANSPORTATION
AND TRAFFIC CODE BY INCREASING THE ANNUAL
REGISTRATION FEE ON PRIVATE AUTOMOBILES AND
IMPOSING AN AD VALOREM TAX THEREON, AND FOR
OTHER PURPOSES
WHEREAS, 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
P a g e 110 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

billion in 1974, thus adversely affecting the country's balance of


payments position;
WHEREAS, there
consumption of fuel;

is

need

to

discourage

uneconomic

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 Registration Fees. Except as otherwise
specifically provided in this Act, each application for the registration
of motor vehicles shall be subject to an annual 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,
P a g e 111 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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
vehicle 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 passenger automobiles
operated for hire or for private use shall be determined as follows:
1. For each adult passenger, a horizontal 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 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 onehalf 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.
P a g e 112 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

(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
corresponding 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 registration fees
P a g e 113 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

provided in this Act, but shall each pay an annual recording and
service 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
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
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 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 Communications, suitable tables of maximum
allowable loads per wheel for different sizes and kinds of tires.
(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 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 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 private passenger
automobile to be paid by the owner thereof prior to the registration
P a g e 114 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

of such automobile with the Land Transportation Commission an


energy tax in an amount equivalent to the percentages 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 under
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
following guidelines shall be observed; for current models, the
prevailing 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 discontinued 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 Commissioner 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
P a g e 115 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

of the Philippines, together with a monthly collection report, copy of


which shall be furnished to the Commissioner of Internal 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 privatelyowned automobiles and all other laws, executive orders,
proclamations, regulations, or parts thereof which are inconsistent
with any provision of this decree are hereby repealed or modified
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.
PRESIDENTIAL DECREE No. 896
FURTHER AMENDING REPUBLIC ACT NO. 4136,
OTHERWISE KNOWN AS THE LAND TRANSPORTATION
AND TRAFFIC CODE
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. Section 8, paragraph (d) of Republic Act No. 4136 as
amended by Presidential Decree No. 843 is hereby amended to read
as follows:
P a g e 116 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

(d) Private motor tricycles for three wheels the sum of P30.00
and private motorcycles, scooters and bicycles with motor
attachments, 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
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 registration fees
provided in this Act, but shall each pay an annual recording and
service 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
registration 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
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 a plate fee as prescribed by the Land
Transportation Commission.
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;
P a g e 117 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 DECREE No. 1057
AMENDING REPUBLIC ACT NO. 4136, OTHERWISE
KNOWN AS THE LAND TRANSPORTATION AND TRAFFIC
CODE
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. Section 7, classification (m), (n) and (o) of Republic
Act No. 4136, is hereby amended to read as follows:
xxx
(m) Government automobiles; (n) government trucks; and (o)
government motorcycles. Motor vehicles owned by the Government
of the Philippines or any of its political subdivisions and those
belonging to the government-owned and/or controlled corporations
shall be registered under this classification although the latter may
under their respective charters pay registration fees.
xxx
Section 2. This Decree shall take effect immediately.

P a g e 118 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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. 1521
THE SHIP MORTGAGE DECREE OF 1978
WHEREAS, it is the declared policy of the State to accelerate
the growth and development of the shipping industry;
WHEREAS, due to the heavy capital requirement for ship
acquisition and operation, the shipping industry 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 deterred
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."

P a g e 119 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 Philippines 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
assign, 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 Station Commander shall record
mortgages delivered to him, in the order of their reception, in books
to be kept for that purpose and indexed 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 residence 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.
P a g e 120 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 affidavit 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, delay, or defraud any existing or future creditor of the
mortgagor or any lien or of the mortgaged vessel;
3. The mortgage does not stipulate 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 preferred 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 preferred 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 endorsed by the provisions of
paragraphs (e) or (f) of this Section.
P a g e 121 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

(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 documentation. The Coast Guard District or Station
Commander of the port of documentation shall give such direction
by wire of letter at the request of the mortgagee and upon the tender
of the cost of communication 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 Commander.
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
Industry Authority at the request of the mortgagee and upon tender
of the cost of communication of such direction. A certificate of such
endorsement, giving the place, time and description of the
endorsement, shall be recorded with the records of registration to be
maintained 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 property by the payment of a specified
portion of the mortgage indebtedness. 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 vessel 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
P a g e 122 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 admiralty, the court shall determine
the portion of the mortgage indebtedness increased by 20 per centum
(1) which, in the opinion of the court, the approximate value of all
the vessels covered by the mortgage, and (2) upon the payment of
which the vessel shall be discharged from the mortgage.
Section 5. Certified Copies of Mortgage; 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 diligence 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-propelled (including
but not limited to, barges, scors, lighters, and car floats).
If the master of the vessel willfully fails to exhibit the documents
of the vessel or the copy of any preferred mortgage thereof, the
Philippine Coast Guard may suspend or cancel the master's license.
Section 6. Prior and Subsequent Maritime Liens on Mortgaged
Vessel. The mortgagor (1) shall, upon request of the mortgagee,
disclose in writing to him prior to the execution of any preferred
P a g e 123 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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
mortgagee, shall not incur, after the execution of such mortgage and
before 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
employed 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 principal 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 thereupon become immediately due and payable
at the election of the mortgagee.
Section 7. Record of Notice of Claim of Lien on Mortgaged
Vessel; discharge of lien
(a) The Coast Guard District or Station Commander of the port of
documentation shall, upon the request of any person, record notice of
his claim of a lien upon a vessel covered by a preferred mortgage,
together with the nature, date of creation, and amount of the lien, and
the name and address of the person. 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 indebtedness, forthwith file with the Coast
P a g e 124 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

Guard District or Station Commander 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 indebtedness, shall forthwith file with the Coast Guard
District or Station Commander for the port of documentation of the
vessel, a certificate 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 documentation 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 certificate 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. Conditions Precedent to Record; interest on Preferred
Mortgage
(a) No mortgage shall be recorded unless it states the interest of
the mortgagor 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 notary public or other officer authorized by a law
of the Philippines to take acknowledgment of deeds or before a
Philippine consul or consular agent.
P a g e 125 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

(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. Inspection of the Copies for Records; fees. Each Coast
Guard District or Station Commander shall permit records made
under the provisions 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 certificate or certified copy
furnished by it.
Section 10. Lien of preferred 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
P a g e 126 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

condition of the mortgage such lien may be enforced by the


mortgagee by suit in remaining admiralty, 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 publication, 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 undischarged lien upon the
vessel, as provided in Section 7 hereof, unless after search by the
mortgage satisfactory to the court, such mortgagor, master, other
ranking officer, caretaker, or claimant is not found within the
Philippines. Failure to give notice to any such person, 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 enforced by a
suit in rem in admiralty or otherwise in any foreign country in which
the vessel may 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.
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
P a g e 127 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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
counterbond 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 behalf, 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 furnishing the same fails to file an
additional co-counterbond, the attaching creditor may apply for a
new order of arrest or seizure.

P a g e 128 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

Section 13. Discharge of Order of Arrest for Improper or


Irregular Issuance 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 purpose 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 immediately take possession of the vessel or vessels for the
purpose of foreclosure 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 include, in addition to a
preferred mortgage made pursuant to the provisions 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
P a g e 129 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 mortgage,
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
supplied in the Philippines.
Section 16. Receiver in Foreclosure; possession 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 possession of the
mortgaged vessel notwithstanding the fact that the vessel 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 Philippines in any suit in rem in
admiralty for the enforcement of a preferred mortgage lien thereon,
all pre-existing claims in the vessel, including any possessory
common-law lien of which a lienor is deprived under the provisions
of Section 16 of this Decree, shall be held terminated and shall
thereafter attach in like amount and in accordance 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
P a g e 130 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

allowed and costs taxed by the court and taxes due to the
Government; (2) crew's wages; (3) general average; (4) salvage;
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 Admiralty 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 mortgagee'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
P a g e 131 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

Philippines or any foreign country) 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 Philippines
covered by a mortgage, shall not be terminated by the forfeiture 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 vessel or
in the business of the mortgagor, without the consent of the
mortgagee, nor the failure by the mortgagor to comply with the
provisions 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 request 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 without the approval of the Maritime
P a g e 132 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 vessels mortgaged under the
provisions of this Decree, whether judicially or extra- judicially,
shall not require the approval of the Maritime Industry Authority.
Section 20. Who May Bid in the Foreclosure Sale The following
persons are qualified to bid in the foreclosure sale of the mortgaged
vessel:
(a) Citizens of the Philippines or corporations 60% of the capital
of which is owned by Filipino citizens.
(b) A foreign mortgagee or foreign national whose country has
diplomatic relations with the Philippines or whose country grants
reciprocal rights to Filipino citizens.
In case the purchaser is a foreign individual or entity, the
Philippine Coast Guard shall, upon presentation 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 furnishing 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 repairs, supplies, towage, use of
P a g e 133 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 vessel.
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
Decree shall be construed to confer a lien when the furnisher know,
or by exercise of reasonable diligence could have ascertained, that
because 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 mortgage lien, to the preferred status of such lien, at any
time by agreement or otherwise.
Section 25. Existing Mortgages Not Affected; exception 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
P a g e 134 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 respective 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 effectivity 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 documented in accordance with
law; and this Section is declared retroactive 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, executive
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,
sentence, clauses or term of this Decree is held to be unconstitutional
P a g e 135 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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. 43
AN ACT PROVIDING FOR THE ISSUANCE 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 Fortyone 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 subject to the approval of the Minister
of Transportation and Communications in consultation with the
Minister of Finance, and, Provided, further, That the identification,
numbers and letters of any motor vehicle number plate shall be
P a g e 136 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

permanently assigned to such motor vehicle 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 designed 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
another 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 purposes 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 Communications in consultation with the
Minister of Finance."
Sec. 2. This Act shall take effect upon its approval.
Approved: November 14, 1979.
BATAS PAMBANSA BLG. 74
AN ACT AMENDING CERTAIN SECTIONS OF REPUBLIC
ACT NUMBERED FORTY-ONE HUNDRED AND THIRTYSIX,
OTHERWISE
KNOWN
AS
THE
LAND
TRANSPORTATION AND TRAFFIC CODE
P a g e 137 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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
follows:
"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
provisions of this Act.
"(b) The dates of annual registration of motor vehicles 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 equitably 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 registration of motor vehicles not renewed or before the
date fixed by the Bureau of Land Transportation shall become
delinquent and invalid.
"(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
information as importation, manufacturing data, and number of
stocks remaining, 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.
P a g e 138 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

"(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 vehicle shall
ever be allowed, and any motor vehicle with a trace of having 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 vehicles, 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 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, attachment and/or
other encumbrances.
"Records of encumbrances of motor vehicles shall be kept by the
Bureau of Land Transportation in chronological and/or alphanumerical 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
Encumbrances" 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."
P a g e 139 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

"Sec. 7. Registration Classification. 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
subclassifications shall be determined by the Director of Land
Transportation 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
classification 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 issued by the Board of Transportation, and shall be
subject to the provisions 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 classification.
"(d) Diplomatic. Motor vehicles owned by foreign
governments or by their duly accredited diplomatic officers in the
Philippines 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
during but not after ninety (90) days of their sojourn: Provided, That
P a g e 140 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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
registered 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 registration 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 Minister 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
factors. 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 P250.00
For Hire 450.00 400.00
Light Cars 1601-1280 cc Private 600.00 550.00
For Hire 900.00 800.00
P a g e 141 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

Heavy Cars 2801-over Private 1,500.00 1,200.00


For Hire 2,500.00 2,000.00
Trucks/Buses, including
all types of utility vehicles
(per 100 kg. of gross
vehicle weight) Private 20.00 2.00
For Hire 30.00 15.00
Trailers (per 100 kg.
of gross weight) Private P10.00
For Hire 12.00
Mopeds (0-49 cc) P60.00
Mopeds (50-cc over)
Without sidecar Private 120.00
With sidecar Private 150.00
Without sidecar For Hire 150.00
With sidecar For Hire 240.00
"Provided, further, That registration fees for vehicles owned by
the government and its political subdivisions shall be determined in
consultation with the Minister of the Budget and within the
constraints imposed by available funds: Provided, further, That all
motor vehicles, regardless of type and/or classification, 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 corresponding to the
year of recording: Provided, finally, that such vehicles 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 purposes.

P a g e 142 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

"For uniformity of registration fees and classification, all


manufacturers and/or assemblers of motor vehicles, prior to the
introduction of a new model motor vehicle, shall submit the
specifications of said model to the Bureau of Land Transportation
which shall determine 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
Numbered Forty-one hundred thirty-six, as amended, shall be
automatically substituted with the words "Bureau of Land
Transportation" and/or "Director", as the case may be; and all other
section or portions 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 THIRTYSIX,
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 follows:
P a g e 143 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

"Sec. 19. Duty to have license. Except as otherwise


specifically provided in this Act, it shall be unlawful for any person
to operate any motor vehicle without having in his possession a valid
license 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 person 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 professional 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 application, except in the case of enlisted men
operating government-owned vehicles, shall be accomplished 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 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 accredited physician.
P a g e 144 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

"An examination, theoretical and practical, to determine 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
language 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, possesses 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 nonprofessional driver's license shall be credited against the period of
instruction required 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 license, fees and validity. If,
after such examination, the Director or his deputies find that the
applicant possesses the necessary qualification 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
P a g e 145 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

professional or nonprofessional license may be issued to such


applicant upon payment of the fee prescribed in accordance 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, license 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 enable the Bureau to detect any unauthorized license.
"Except for student 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, subject 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 license 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 described in such license: Provided, however,
That every licensed professional 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 payment of the sum of five pesos, a driver's
P a g e 146 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 expiry
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 license 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 prescribed, an amount
equivalent to fifty per cent of said basic fee.
"Every applicant for renewal of license to operate any motor
vehicle shall present to the Director or his deputies, in person, the
license issued 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
P a g e 147 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

suffered any injury or illness that impairs his ability to operate motor
vehicles, he shall be required to undergo a theoretical and practical
examination in order to determine his ability and fitness to operate
motor vehicles.
"Lost License. In case the license has been lost or cannot be
produced, the licensee shall apply for a duplicate of the original on
file with the Bureau by filing a sworn statement that such license 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 provided, the
Director shall have exclusive power and authority to suspend or
revoke for cause any driver's license issued under the provisions of
this Act.
"(a) The Director may suspend for a period not exceeding 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 accordance with
paragraph (d) (1) of Section four of this Act, 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 operating or using a
motor vehicle in, or as an accessory to, the commission of any crime
or act which endangers the public. Any deputy of the Director may.
P a g e 148 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

for the same cause, suspend for a period not exceeding 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 regulations issued by the Director or
any municipal or city ordinance relating to motor vehicle traffic not
in conflict with any of the provisions 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
reinstatement of a license under the provisions of this section may be
appealed 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
P a g e 149 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 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 twelvemonth 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 period 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 extended, 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."
P a g e 150 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

Sec. 10. Section thirty of the same Act is hereby amended to read
as follows:
"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 continue as a student-driver and
shall not be allowed to take another examination at least one month
thereafter. No student-driver shall operate a motor vehicle, unless
possessed of a valid student-driver's permit 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 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-driver under his direction."
Sec. 11. Section thirty-two of the same Act is amended to read as
follows:
"Sec. 32. (a) Exceeding registered capacity, issuance of
conductor's license, validity and fee. No person operating any
motor vehicle shall allow more passengers 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 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 permit or license from the
Bureau and pay the fee prescribed in accordance with law, for said
P a g e 151 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 cargocarrying 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 vehicles: 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 distributed 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
follows:
"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 registration fee than for which it was
originally registered, or for a renewal of a delinquent registration, the
penalty shall be a fine of fifty per cent of the registration fees
P a g e 152 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 pesos 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 discretion of the
court.
"(e) Driving a motor vehicle without first securing a driver's
license, five hundred pesos fine and imprisonment of not exceeding
fifteen days.
"(f) Driving a motor vehicle while under the influence of liquor
or narcotic drug, a fine of not less than one thousand pesos or
imprisonment of not less than three nor more than six months, or
both, at the discretion of the court.
"(g) Violation of Sections thirty-two, thirty-four (a), (b), and (b1), thirty-five and forty-six, a fine not exceeding one hundred pesos:
Provided, however, That in the case of violation of Section thirtyfour (b) the vehicle or vehicles affected may not be allowed to
operate, unless the requirement 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 attempting 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
P a g e 153 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 imitation or similitude of those issued under this Act,
the penalties under the provisions of the Revised Penal Code.
"If the violation is committed by a public officer or employee,
the offender shall furthermore suffer perpetual absolute
disqualification.
"(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 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 violation 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.
P a g e 154 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

"(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 reckless 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 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 comparable services
and functions.
Sec. 14. For purposes of simplicity, economy and efficiency in
operations and implementation, the Director, subject to the approval
of the Minister of Transportation and Communications, is hereby
authorized to promulgate rules and regulations for the rational and
equitable issuance and renewal of licenses during the first three years
following the effectivity of this Act, including the said period.
Accordingly, the Director shall proportionately 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. 1958
P a g e 155 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

REPEALING PRESIDENTIAL DECREE NUMBERED


1934 AND 1950 AND IMPOSING A PRIVATE
MOTOR VEHICLE TAX AND FOR OTHER PURPOSES
WHEREAS, the current economic crisis amounts to a
grave emergency which affects the stability of the
nation and require immediate action;
WHEREAS, the issuance of this decree is an
essential and necessary component of the national
economic recovery program promulgated to meet and
overcome the emergency;
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
classified as private shall, upon every annual
registration, pay a private motor vehicle tax in
accordance with the following schedule:
Age of
Vehicle
Vehicle Current 123456Type
year year year year year year
Private 1000
100 100 100 100 100 800
Passenge
0
0
0
0
0
P a g e 156 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

r Cars
Light (01600cc)
Medium 2000
200
(1601cc0
2800cc)
Heavy
4000
400
(2800cc
0
and
above)
Private 1000
Utility
(regardles
Vehicles s of age
(2700 kg of
GVW and vehicle)
below)

200 200 160 160 120


0
0
0
0
0
400 400 400 400 280
0
0
0
0
0

Provided that with respect to tax-exempt vehicles,


they shall pay registration fees.
SEC. 2. The tax imposed herein shall not apply to all
public utility vehicles.
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
regulations or parts thereof, which are inconsistent
with the provisions of this Decree are hereby modified
accordingly.
P a g e 157 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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
Presidential Decree Nos. 1934 and 1950 shall be
adjusted or refunded as the case may be as a result of
this Decree.
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
Print

REORGANIZING
THE
MINISTRY
OF
TRANSPORTATION
AND
COMMUNICATIONS
DEFINING 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
P a g e 158 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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:
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.
P a g e 159 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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
P a g e 160 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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
P a g e 161 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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;
P a g e 162 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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
P a g e 163 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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.
P a g e 164 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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:
P a g e 165 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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;
P a g e 166 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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;

P a g e 167 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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;

P a g e 168 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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;
P a g e 169 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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;
P a g e 170 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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:
P a g e 171 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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.
P a g e 172 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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
P a g e 173 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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.
P a g e 174 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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
P a g e 175 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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
P a g e 176 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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
P a g e 177 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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
P a g e 178 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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
PHILIPPINE OVERSEAS SHIPPING

OF

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
composed 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
Philippine flag by citizens of the Philippines or by associations or
P a g e 179 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

corporations organized under the laws of the Philippines, at least


sixty percent (60%) of the capital of which is owned by citizens of
the Philippines;
(b) Assist in the development, recovery and expansion of
Philippine overseas shipping capable of meeting the requirements of
the expanding international trade of the Philippines;
(c) Provide assistance to Philippine Shipping enterprises and
encourage the long range vessel acquisition development
modernization and expansion through private investments without
direct government 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
operated solely between ports in the Philippines;
(b) "Philippine shipping enterprise" means a citizen of the
Philippines 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
Philippines and any other agency in charge of foreign exchange
controls; and
(e) "Regulation" means the rules and regulations promulgated
pursuant to Section 10 hereof.

P a g e 180 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

SECTION 4. Foreign Exchange Requirements. Foreign


exchange requirements of Philippine Shipping enterprises for the
purchase of oceangoing vessels for registration under the Philippine
flag, for repair or improvement of vessels, for importation of
engines, spare parts, accessories, supplies, containers and for other
expenses 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
regulations.
SECTION 5. Acquisition of Oceangoing Vessels. Philippine
shipping enterprises may likewise acquire oceangoing vessels for
Philippine overseas shipping upon approval by the MARINA,
subject 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
purchase of supplies and related equipment shall be financed solely
from earnings derived from the operation of the vessel and no
foreign 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
P a g e 181 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

(f) Any excess foreign exchange earning shall be inwardly


remitted and surrendered to the Philippine banking system.
SECTION 6. Exemption from Import Duties and Taxes. The
importation by a Philippine shipping enterprise of oceangoing
vessels 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
payment 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
person or entity in possession of such items shall be subject to full
duties 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
shipping enterprise shall be exempt from payment of income tax on
income derived from Philippine overseas shipping for a period of ten
(10) years from the date of approval of this Act: provided, that:
P a g e 182 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

(a) The entire net income, after deducting not more than ten
percent (10%) thereof for distribution of profits or declaration of
dividends, 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
equipment 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
income tax exemption or until the vessel or related equipment so
acquired 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
incentives 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
acquiring 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,
requisition absolutely or temporarily, for any naval or military
purpose, any and all vessels of the Philippine registry. The
Government shall pay the owner or operator of the vessel, based on
normal conditions at the time of requisition;
(a) The fair market value, if the vessel is taken absolutely, or
P a g e 183 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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


case of disagreement, such fair value shall be determined by an
arbitration 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
binding on both parties.
SECTION 10. Rules and Regulations. The MARINA, in
consultation with the monetary authority and the Department of
Finance, shall jointly formulate and promulgate the rules and
regulations necessary 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
P a g e 184 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

(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
responsible for the violation.
If the violation is committed by a government official or
employee, he shall, in addition to the penalties prescribed hereunder,
be dismissed from the government service with all administrative
penalties 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.
REPUBLIC ACT NO. 8506
AN ACT BANNING THE REGISTRATION AND OPERATION
OF VEHICLES WITH RIGHT-HAND STEERING WHEEL IN
ANY PRIVATE OR PUBLIC STREET, ROAD OR HIGHWAY,
P a g e 185 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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
highway, street or road, whether private or public or of the national
or local government except such vehicles that are acknowledged as
vintage automobiles, manufactured before 1960, in showroom
condition, and/or are to be utilized exclusively for officially and
legally sanctioned motorsports events, and off-road special purpose
vehicles.
Section 2. The penalty of prision correccional in its medium
period 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
complete publication in the Official Gazette or in at least two (2)
national newspapers of general circulation.
Approved: February 13, 1998
REPUBLIC ACT NO. 8750
AN ACT REQUIRING THE MANDATORY COMPLIANCE
BY MOTORISTS OF PRIVATE AND PUBLIC VEHICLES TO
USE SEAT BELT DEVICES, AND REQUIRING VEHICLE
P a g e 186 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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
policy 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.
Towards this end, the State shall pursue a more proactive and
preventive approach in order to secure the safety of the passengers
and drivers 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
similar device in the form of pelvic restraint or lap belt, upper torso
restraint or shoulder strap or a combination thereof designed to
secure a person in a motor vehicle in order to mitigate the results of
any accident, including all necessary buckles and other fasteners, and
all hardware designed for installing such seat belt device in a motor
vehicle.
(c) "Motor vehicle" shall refer to both private and public motor
vehicle. The term shall not include the tricycle and motorcycle.
P a g e 187 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

(d) "Private motor vehicle" shall refer to any of the following:


(1) Any motor vehicle owned by individuals and juridical
persons 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
passengers seated on the right side beside the driver for private
motor vehicles.
Section 4. Mandatory Use of Seat Belts. For their own safety,
the driver and front seat passengers of a public or private motor
vehicle 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
Implementing Rules and Regulations (IRR), front and back seat
passengers are likewise required to use their seat belt devices at all
times.
P a g e 188 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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
allowed 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
devices should be provided and used by both drivers and front seat
passengers as defined herein and the first row passengers
immediately behind the driver at all times while inside a vehicle of
running engine.
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
P a g e 189 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

manufacturers, assemblers and distributors of jeepneys may install a


pelvic restraint or lap belt only in the driver's and front seat
passengers' 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
accordance 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
installed 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
allowed initial registration and succeeding renewal of registration
unless 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
registration 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
P a g e 190 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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
necessary.
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
provisions 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
failure 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 hundred 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
instructing front seat
passengers to wear seat belts when inside the vehicle. Noncompliance 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
P a g e 191 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

(2) On any manufacturer, assembler, importer and distributor for


every unit found without seat belt devices installed prior to its
distribution to the public, a minimum fine of Five thousand pesos
(P5,000) but not to exceed Ten thousand pesos (P10,000) and
suspension 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, assemble, import or distribute for a period of two (2)
years for the second violation; and a fine of Twenty thousand pesos
(P20,000) but not to exceed Fifty thousand pesos (P50,000) and
suspension of the license 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
nationwide 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 effective 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
observance 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 provisions of
this Act, including the necessary promotion campaigns for the use of
seat belt devices.
P a g e 192 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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
Republic Act No. 4136 is hereby amended and any law, executive
order, 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
fifteen (15) days after its publication in at least two (2) national
newspapers of general circulation.
Approved: August 5, 1999
REPUBLIC ACT NO. 9295
AN ACT PROMOTING THE DEVELOPMENT OF
PHILIPPINE DOMESTIC SHIPPING, SHIPBUILDING, SHIP
REPAIR 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 I
GENERAL PROVISIONS
P a g e 193 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

SECTION 1. Short Title. - This Act shall be known as the


"Domestic Shipping Development Act of 2004."
SEC. 2. Declaration of Policy. - The State recognize that
shipping is a necessary infrastructure, which is vital to the economic
development of our country.
The Philippines needs a strong and competitive domestic
merchant fleet owned and controlled by Filipinos or by corporations
at least sixty percent (60%) of the capital of which is owned by
Filipinos and manned by qualified Filipino officers and crew which
shall: (a) bridge our islands by ensuring safe, reliable, efficient,
adequate 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 efficient shipping services; (c) ensure the growth of exports by
providing necessary, competitive and economical domestic sea
linkage; (d) serve as a naval and military auxiliary in times of war
and other national 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
under the Philippine flag; (b) attract private capital to invest in the
shipping industry by creating a healthy and competitive investment
and operating environment; (c) provide necessary assistance and
incentives 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)
P a g e 194 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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 seaworthiness 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
compensation, 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
Filipinos, 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;
P a g e 195 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

(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
Republic 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,
communications, 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
licensed 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
limited 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;
P a g e 196 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

(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
renovation 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
Filipinos or a corporation incorporated under the laws of the
Philippines, the capital of which is owned or controlled in any
proportion by Filipinos or by foreign nationals, or by both such
Filipinos or foreign 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 II
INVESTMENT INCENTIVES
SEC. 4. Investment Incentives. - To insure the continued
viability of domestic shipping, and to encourage investments in the
domestic 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
vessels: Provided: That the vessels to be imported shall comply with
the age limit requirement at the time of acquisition counted from the
P a g e 197 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

date of the vessels, original commissioning, as follows; 1) For


passenger 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 highspeed 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
operations.
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
domestically in sufficient quantity, of comparable quality and at
reasonable prices; (2) That said articles are directly imported by a
MARINA-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
importation of said articles shall be granted to all domestic shipping
operators 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
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 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
P a g e 198 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

(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
effectivity of this Act shall be made by informing MARINA in
writing. The purchasers, transferees, or recipients shall be considered
the importers 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 article itself, and such lien shall be superior to all
charges or liens on the goods, irrespective of the possessor thereof.
The Bureau of Internal 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
taxable 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
immediately following the year of such loss subject to the pertinent
provisions 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:
Provided, That the domestic shipping operator notifies the BIR at the
beginning of the depreciation period which depreciation rate allowed
by this section will be used.
P a g e 199 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

CHAPTER III
DEREGULATION OF THE DOMESTIC SHIPPING
INDUSTRY-AUTHORITY OF THE MARITIME INDUSTRY
AUTHORITY
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
allowed 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
convenience 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 accordance 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.
Domestic ship operators who do not intend to operate in a fixed route
P a g e 200 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

shall nevertheless state in its application the service it proposes to


offer.
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
authorized 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
P a g e 201 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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
hearing, 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
services to any coastal area, island or region in the country where
such services are necessary for the development of the area, to meet
emergency 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
operational and safety standards for vessels set by applicable
conventions and regulations, maintain its vessels in safe and
serviceable conditions, meet the standards of safety of life at sea and
safe manning requirements, 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
financial capacity to provide and sustain safe, reliable, efficient and
economic 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
ensure compliance by every domestic ship operator with required
safety standards and other rules and regulations on vessel safety;

P a g e 202 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

(12) Adopt such rules and regulations which ensure the


reasonable stability of passengers and freight rates and, if necessary,
to intervene in order to protect public interest;
(13) Hear and adjudicate any complaint made in writing
involving any violation of this law or the rules and regulations of the
Authority;
(14) Impose such fines and penalties on, including the
revocations 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
domestic ship operator, or any shipper, or any group of shippers
regarding any matter involving violations of the provisions of this
Act;
(16) Upon notice and hearing, impose such fines, suspend or
revoke 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
cannot change or in any way amend or be contrary to the intent and
purposes of this Act.
CHAPTER IV
RATES
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
P a g e 203 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

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
offered by the ship operator, and the available port facilities and
terminal handling services.
CHAPTER V
COMPULSORY 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
annually 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
equivalent 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
P a g e 204 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

(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
required under this section, for purposes of providing financial
capacity, shall be the amount equivalent to the total number of
passenger accommodations, or total cargo capacity, or both, of the
largest operating 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 protection and indemnity association.
SEC. 15. Other Insurance Coverage. - the MARINA shall have
the power to require every ship operator to obtain such other
compulsory insurance coverage necessary to adequately cover claims
for damages.
CHAPTER VI
PROHIBITED ACT AND PRACTICES
SEC. 16. Prohibited Acts and Practices of Domestic Ship
Operators. - 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,
accreditation or other form of authority required by this Act;
(2) Refuse to accept or carry any passenger or cargo without just
cause;
P a g e 205 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

(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 VII
FEE, 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,
regulation, inspection, approval and accreditation of domestic ship
operators and the promotion and development of the country's
maritime industry. The MARINA shall have the power to establish
and manage a trust fund for this purpose.
Fees prescribed by the MARINA under this section shall be
imposed and collected in order to recover the cost for rendering the
service and shall not be used in order to impose a penalty on the
domestic 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,
management, control and regulation of vessels, steamboats,
steamship lines, ferries, water craft and the like, is hereby repealed.

P a g e 206 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

SEC. 18. Fines and Penalties. - The MARINA, upon notice and
hearing and a determination of the existence of any breach or
violation 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,
license, 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,
accreditation 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
passengers or cargo, without just cause, or for engaging in any
prejudicial, discriminatory or disadvantageous act towards any class
of passengers 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
comply 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,
including the revocation of any certificate or license, who fails to
procure 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,
P a g e 207 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

including 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 VIII
SHIPBUILDING
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,
renovation or alteration or any merchant marine vessel operated or to
be operated 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.
P a g e 208 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

Any sale, transfer or disposition of articles under Section 19 (a)


within ten (10) years from the effectivity of this Act to another
registered 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
effectivity of this Act shall be made by Informing MARINA in
writing. The purchaser, transferees or recipients shall be considered
the Importers 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,
irrespective 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
taxable 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 Revenue Code of 1997, as amemded;
(c) Accelerated depreciation. Fixed assets may be depreciated as
follow:

P a g e 209 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

(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.
Provided, 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
MARINA 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
below 500 GRT. If, upon evaluation, the capability of MARINAregistered 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 domestic trade.
The MARINA shall undertake a yearly evaluation of the
progressive 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
P a g e 210 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

adjust the size of vessels which may be sourced from MARINAregistered shipyards.
CHAPTER IX
TRANSITORY 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
acquired or after the effectivity of this Act shall be classed by a
government 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
approved 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
stipulate by MARINA's mandatory vessel retirement program and
which do not carry a class certificate issued by a governmentrecognized classification society shall not be allowed to operate in
the domestic trade and shall be automatically de-listed from the
Philippine Registry.
CHAPTER X
FINAL PROVISIONS
P a g e 211 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

SEC. 24. Temporary Take-Over of Operations. - In times of


national 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
operation. Immediately upon the cessation of the emergency, the
State shall immediately reinstate to the domestic ship operation of its
vessel 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
declaration 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,
management control and regulation of vessels, steamboats,
steamships, lines, ferries, water craft and the like, as well as the
provisions of Presidential 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 provisions of this Act are hereby repealed,
amended or modified accordingly.
SEC. 27. Effectivity. - This Act shall take effect after fifteen (15)
days following its publication in at least two (2) newspapers of
general circulation.
Approved: May 03, 2004.
P a g e 212 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

REPUBLIC ACT NO. 9301


AN ACT AMENDING CERTAIN PROVISIONS OF
REPUBLIC ACT NO. 7471, ENTITLED "AN ACT TO
PROMOTE THE DEVELOPMENT OF PHILIPPINE
OVERSEAS SHIPPING" AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the
Philippines in Congress assembled:
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
between ports in the Philippines."
Section 2. Section 7 of the same Act is reinstated with
amendments, to read as follows;
"SEC. 7. Exemption from Income Tax. - a Philippine shipping
enterprise shall be exempt from payment, of income tax on income
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 fifteen
percent (15%) thereof for distribution of profits or declaration of
dividends, which would otherwise be taxable under the provisions of
Title II of the National Internal Revenue Code, is reinvested for the
P a g e 213 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

construction, purchase, or acquisition of vessels and related


equipment 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
income tax exemption or until the vessel or related equipment so
acquired 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
responsible for the violation.
"If the violation is committed by a government officials or
employees, he/she shall, in addition to the penalties prescribed
hereunder, be dismissed from the government service with all the
administrative penalties accessory thereto."
Section 4. Repealing Clause. - All laws, decrees, executive
orders or rules and regulations inconsistent with this Act are hereby
repealed, amended or modified accordingly.
P a g e 214 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

Section 5. Effectivity. - This act shall take effect after fifteen (15)
days following its publication in at least two (2) newspapers of
general circulation.
Approved: July 27, 2004.
REPUBLIC ACT NO. 10635
AN ACT ESTABLISHING THE MARITIME INDUSTRY
AUTHORITY (MARINA) AS THE SINGLE MARITIME
ADMINISTRATION
RESPONSIBLE
FOR
THE
IMPLEMENTATION AND ENFORCEMENT OF THE 1978
INTERNATIONAL CONVENTION ON STANDARDS OF
TRAINING, CERTIFICATION AND WATCHKEEPING FOR
SEAFARERS, AS AMENDED, AND INTERNATIONAL
AGREEMENTS OR COVENANTS RELATED THERETO
Be it enacted by the Senate and House of Representatives of the
Philippines in Congress assembled:
Section 1. Declaration of Policy.The following are hereby
declared to be the policies of the State:
(a) The State shall ensure compliance with the 1978 International
Convention on Standards of Training, Certification and
Watchkeeping 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
P a g e 215 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

systems and mechanisms for the promotion and protection of the


well-being of the seafarers to ensure their professionalism and
competitiveness, both in local and international trade, consistent with
existing 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
business of Philippine seafaring; establish appropriate institutional
arrangements with other agencies of government; and create an
effective 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
measures which are taken and provided for by government
regulatory agencies and ensure that such measures are appropriate
and consistent with the STCW Convention.
Section 2. Definition of Terms.As used in this Act, the
following terms shall mean:
(a) Certificate of competencya certificate issued to masters,
officers and Global Maritime Distress and Safety System (GMDSS)
radio 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
responsibility specified therein.
(b) Certificate of endorsementan 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
compliance with the requirements of the STCW Convention.
(c) Certificate of proficiencya certificate other than a certificate
of competency issued to a seafarer, stating that the relevant
P a g e 216 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

requirements of training competencies or seagoing service under the


STCW Convention have been met.
(d) Documentary evidenceall the documentation, other than a
certificate of competency or certificate of proficiency, used to
establish 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
government agency mandated to ensure complete and effective
implementation of the STCW Convention.
(f) Seafarerany 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
applies.
(g) STCW Conventionthe 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
Standards 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
seafaring 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:
P a g e 217 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

(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
agreements 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
Regulation 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 certificates of competency, endorsement, proficiency
and documentary evidence required of all seafarers and all such other
matters pertaining 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
Convention. All powers, duties and functions of the PRC on
examination, 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 allowances 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 regulatory boards under the PRC and as provided in the
General Appropriations Act.
P a g e 218 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

(2) The MARINA shall adopt rules and regulations, in


accordance 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,
assessment and monitoring activities undertaken by accredited
institutions 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
Convention. For this purpose, the MARINA shall assess, revalidate
and issue GMDSS radio operators certificate in accordance with the
provisions under the STCW Convention.
(4) The MARINA shall ensure that all maritime education,
including the curricula and training programs, are structured and
delivered in accordance with the written programs, methods and
media of delivery, procedures, and course materials compliant with
international 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
recommend 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,
compliance with the policies, standards, and guidelines of maritime
education in the conduct of maritime education and training
programs;P a g e 219 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

(iii) Review and harmonize the procedures for periodic


evaluation, assessment and monitoring of all maritime education and
training 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
maritime 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
maritime education and training programs, publish such lists in
appropriate 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
companies and State parties to the STCW Convention,

P a g e 220 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

Section 5. Composition of the Maritime Industry Board.To


ensure the proper implementation and enforcement of the STCW
Convention in relation to international maritime safety and
environmental agreements, the Commandant of the Philippine Coast
Guard (PCG), in lieu of the Secretary of National Defense, shall be
included as member of the Maritime Industry Board established
pursuant to Presidential Decree No. 474 creating the MARINA. The
Maritime Industry Board may create an advisory council that will
assist the MARINA in ensuring compliance with the STCW
Convention, as it may deem proper. The number and members of this
council 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
Services, the initial funding of which shall be charged against the
savings or current years 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
accordance 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 issuance, validation, verification, correction,
revocation, or cancellation of certificates of competency,
endorsement, proficiency arid documentary evidence required of
seafarers under the STCW Convention shall be the most efficient and
convenient way for the seafarers including, but not limited to, the
P a g e 221 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

establishment of one-stop shop arrangements, computerization and


automation, and elimination of redundant fees and charges.
Section 8. Transitory Provisions.All certificates of
competency, endorsement, proficiency and documentary evidence
issued prior to the effectivity of this Act shall be deemed valid
without necessity of revalidation or reissuance until the date of
expiration as stated in such certificates or other documents.
Thereafter, new certificates or other documents shall be revalidated
or reissued only in accordance with the implementing rules and
regulations issued pursuant 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,
decrees, rules and regulations or parts thereof inconsistent with the
provisions 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.
P a g e 222 Transportation Law & Jurisprudence Atty. Alvin T. Claridades

Potrebbero piacerti anche