RESTRICTED
WORLD TRADE S/NGMTS/W/2/Add.24
5April 1995
ORGANIZATION(95-0829)
Original: English Negotiating Group onMaritime Transport Services
COMMUNICATION FROM THE PHILIPPINES
Response totheQuestionnaire onMaritime Transport Services
Thefollowing communication iscirculated attherequest ofthePhilippines tomembers ofthe
Negotiating Group onMaritime Transport Services.
___________
I. Market Structure
Vessels
1.
STRUCTURE OFNATIONALLY-OWNED OROPERATED FLEET (ASOF31DECEMBER 1994)
Type ofVessels Number ofVessels
(National Flag)Deadweight Tonnage
(National Flag)
Tankers *
Ore/Bulk Carriers
General Cargo
Container Ships
Reefers
Specialized Cargo **
Ro-Ro
Ferries &Passenger
Multi-purpose11
250
61
10
13
30
6
1
12567,850.50
11,710,124.66
1,134,058.36
183,020.00
93,925.60
268,814.64
46,116.00
8,712.00
155,590.73
AllVessels 394 14,168,112.49
* Includes liquified gascarriers, oiltankers andchemical tankers
** Includes livestock carriers, carcarriers
Trade
2-4. Total International Trade Carried BySea(AsofSeptember 1993)
FOBValue Quantity %Share ofTotal
US$20,763,178,344 48.99 million MT 77.70%S/NGMTS/W/2/Add.24
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Breakdown
Exports
US$8,119,340,549 14.12 million MT 29.00%
Imports
US$12,643,837,795 34.87 million MT 71.00%
Carried byNational Vessels (in1992)
US$2,063,641,000 7.34million MT 14.98%
Nodataavailable ontheshares ofpartners 'andcross trading vessels.
5. Nodataavailable.
Organization ofCargo
6. Nodataavailable.
7. Nodataavailable.
8. Nodataavailable.
9. ThePhilippines hasnoexisting bilateral agreements oncargo-sharing.
10. Nodataavailable.
11. Nodataavailable.
Ports andAuxiliary Services
12. Thetotalnational porttraffic forinternational tradecargoes asofendof1992was48.99 million
metric tons.
International Trade PortTraffic inMajor National Ports:
Batangas - 10.88 million metric tons
Cagayan deOro - 8.55million metric tons
Manila (North Harbor) - 7.74million metric tons
Manila (South Harbor) - 6.30million metric tons
Manila (MICT) - 4.83million metric tons
Tacloban - 2.65million metric tons
Davao - 1.51million metric tons
Iligan - 1.46million metric tons
____________________________
Total 43.92 million metric tonsS/NGMTS/W/2/Add.24
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13. None, foreign equity participation intheseservices islimited to40%. Participation offoreign
suppliers inthegoverning boards isproportionate totheextent offoreign equity participation.
14. None, foreign equity participation inthese services islimited to40%.
II. Regulatory Structure
1. TheMaritime Industry Authority under theDepartment ofTransportation andCommunications
isthemainauthority formatters related toshipping. However, itcoordinates andliaises veryclosely
withthePhilippinesPortsAuthority,(alsoundertheDepartmentofTransportationandCommunications);
thePhilippines Shippers 'Bureau under theDepartment ofTrade andIndustry; thePhilippine Coast
Guard under theDepartment ofNational Defense; andtheNational Economic andDevelopment
Authority.
2-3. There isnospecific legislation regulating bulkorlinershipping operations inthePhilippines.
4. Accreditation withthePhilippine Shippers Bureau isrequired ofPhilippine nationals engaged
asfreight forwarders, break-bulk agents, cargo consolidators andNVOCCS.
5. ThePhilippine Ports Authority isresponsible fortheadministration andoperation ofallports
inthePhilippines. Accreditation ofprivate entities engaged intheprovision ofport-related auxiliary
service activities isvested withthePhilippine Ports Authority.
6. There isnonational definition of"international maritime transport". Itisgenerally understood
however tobethecarriage ofgoods andpassengers byanoceangoing vessel from oneportinthe
Philippines toanother portinanother country orbetween andamong foreign ports.
7. "Nationalshippingenterprise"isdefinedasanentityengagedinshipowing/shipcharteringwhose
equity isatleast60%Filipino.
Market Access
8.aMaritime Transport Services Suppliers
8.a.1 Accreditation withtheMaritime Industry Authority (MARINA) isrequired forentities
wishing toengage inthemaritime business (excluding freight forwarding, break bulk
agents,cargoconsolidation,NVOCCS,shipchartering,shipowing,manningandcrewing,
andportauxiliary services).
8.a.2 Accreditation withthePhilippine Shippers 'Bureau forentities/individuals wishing to
engage infreight forwarding, break bulkagents, cargo consolidation andNVOCC.
8.a.3 Registration/accreditation withMARINA forentities wishing toengage inoverseas
shipping specifically inshipowing andshipchartering.
8.a.4 Accreditation ofmanning/crewing agents isvested with thePhilippine Overseas
Employment Administration (POEA).S/NGMTS/W/2/Add.24
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8.bCargo reservation measures
8.b.1 Section 2:Thetransportation ofpersons orexport orimport ofcargoes bywater
between thePhilippines andanother country which isprocured, contracted foror
obtainedbyanygovernmentoffice,agencyorinstrumentality,includingallgovernment-
owned orcontrolled corporations orthepayment forwhich cargoes ismade orwill
ultimately bemade fromfunds ofthegovernment orsuchinstrumentality orcorporation
must make useofPhilippine flagvessels (orcarriers).
8.b.2 Section 3:Whenever export orimport ofcargoes and/or theirtransportation istobe
paidfrom theproceeds ofgovernments loans, credits orobligation, Philippine flag
vessels must beutilized forsuchcargoes and/or theirtransportation.
Exemptions from Sections 2and3above:
When suitable Philippine-flag vessels arenotavailable atreasonable freight
ratesandwithin areasonable period oftime;
When arelevant international agreement entered into, oraninternational
convention adhered to,bythePhilippine Government provides otherwise;
Onthebasis ofreciprocity; and
Inthecaseofexport commodity groups determined asexempted bythe
Philippine Export Council.
8.b.2 Bilateral agreements entered intobythePhilippines oncargo reservation.
8.c Employment ofAliens
8.c.1 Ship'sCrew -100% manning/crewing ofPhilippine-registered vessels byFilipino
nationals.
Exemptions:
Onspecialized vessels where asupercargo orsupernumerary maybeemployed
foramaximum ofsixmonths only.
Foreign crewmaybeemployed onlyincaseofemergency inaforeign port
butnotexceeding 10percent ofitscomplement untilsuchtimeFilipino citizens
canbeemployed.
8.c.2 Executives andchief operating officers must becitizens andpermanent residents of
thePhilippines.
9.a. None.
9.b. None.
10. ThePhilippine Constitution andtheCorporation LawofthePhilippines bothprovide for40%
maximum foreign capital participation.S/NGMTS/W/2/Add.24
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11. Minimum conditions forgranting therighttoflythenational flag:
11.a Vessel mustbeofdomestic ownership i.e.,ownership isvested incitizens ofthePhilippines,
corporations and/or associations organized under thelawsofthePhilippines atleast60%of
thecapital ofwhich isowned bythecitizens ofthePhilippines.
11.b Vessels chartered byPhilippine nationals accredited withMARINA.
11.c Vessels completely manned byFilipino crew.
11.d Management andoperational control ofthevessel areinthehands oftheFilipino
owner/charterer.
National Treatment
12.a. None.
12.b. None.
Access toandUseofPortFacilities
13. Allsuchservices, except forballast waste disposal, areoffered andavailable totheuserat
theport.
14. Useoftheservices in13(above) isnotmandatory. Itdepends ontheneeds andrequirements
ofthevessel.
15. Allsuchservices areavailable onanon-discriminatory basis.
16. None.
17. None.
18. None.
19. None.
Most-favoured Nation Treatment
20. ThePhilippines isaParty totheUNCTAD Code ofConduct forLiner Conferences.
21. Through bilateral agreements which stipulate theprovisions intheLiner Codeforcargo sharing.
Presently, there arenosuchagreements inforce.
22. Executive Order No.769provides themechanism forthenegotiation andimplementation of
cargo sharing arrangements according totheterms stipulated intheLiner Code.
23. None.
24. None.
25. None.S/NGMTS/W/2/Add.24
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26. Cabotage lawrequires thatonlynational flagvessels mayengage indomestic shipping, i.e.
thecarriage ofgoods andpassengers fromoneportinthePhilippines toanother portinthePhilippines.
Government Procurement
27. Please see8.b(above).
28. AllPhilippine registered vessels mustberepaired/drydocked atPhilippine shipyards/ship repair
facilities.
Competition Law
29. ThePhilippines hasnoanti-trust lawsorregulations thatapply specifically toactivities inthe
maritime transport sector. However, thePhilippine Constitution provides that"....nocombination
inrestraint oftrade orunfair competition shallbeallowed."
Shipping Conferences
30. TheLondon-based FarEastern Freight Conference (FEFC) istheonlyCLOSED conference
whose operation extends tothePhilippines andisrepresented bythePhilippines Europe Conference
(PEC). Theother outbound shipping conferences, namely; theAsiaNorth America Eastbound Rate
Agreement (ANERA) andtheAustralian-New Zealand Eastern Shipping Conference (PAC) areOPEN
Conferences.
31. Nogovernment entity sofarhasrequired thatitbenotified ofconferences 'legitimate activities.
32. Theconferences arerequested toadvise thePhilippine Shippers 'Bureau (PSB) ofanyfreight
rateincreases andtheircorresponding justification. ThePSBmayoppose freight rateincreases itdeems
unjustified. However, thePSBhasnoenforcement mechanism toensure compliance withtariffs whose
notification isrequired.
33. Yes.
34. Loyalty arrangements arerecognized onlywhen theservice contracts entered intobyshippers
andmembers ofaconference (e.g., ANERA) areclassified assuch. Intheimplementation ofthe
Terminal Handling Charge (THC), anagreement between theconference andoutsiders generally
exists.
Shipper/Carrier Relations
35. Depending onthetraderoute, thefollowing areconsidered institutional arrangements between
shippers andcarriers:
a. Time-volume contracts
b. Service contracts
c. Cargo consolidation (another party maybeinvolved inthisactivity, e.g.,thefreight
forwarder orcargo consolidator).
36. Inmost cases, freight ratenegotiations andconsultations areconducted when ageneral rate
increase (GRI) isproposed byalinershipping conference.S/NGMTS/W/2/Add.24
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ThePhilippine Shippers 'Bureau (PSB) conducts consultations andnegotiations withshipping
companies,associationsofshippinginterests,governmentauthorities,andotherinstitutionsandpersons,
whether foreign ordomestic, fortheshipment ofgoods ontimeatreasonable ratesandother shipping
terms andconditions. ThePSBisempowered tomediate and/or arbitrate disputes between members
ofassociations ofshipping interests andbetween thesaidmembers andnon-members.