EXECUTIVE ORDER NO. 185
EXECUTIVE ORDER NO. 185 - OPENING
THE DOMESTIC WATER TRANSPORT INDUSTRY TO NEW OPERATORS AND INVESTORS
WHEREAS, Section 19, Article XII of
the Constitution declares that “[t]he State shall regulate or prohibit
monopolies when the public interest so requires. No combinations in
restraint of trade or unfair competition shall be allowed;”
WHEREAS, Presidential Decree No. 474, otherwise known as the Maritime
Industry Decree of 1974, provides that:
“It
is hereby declared the policy of the State to accelerate the integrated
development of the maritime industry of the Philippines to attain the
following objectives: (a) To increase production and productivity in
the various islands and regions of the archipelago through the
provision of effective sea linkage; (b) To provide for the economical,
safe, adequate and efficient shipment of raw materials, products,
commodities and people; (c) To enhance the competitive position of
Philippine flag vessel in the carriage of foreign trade; (d) To
strengthen the balance of payments position by minimizing the outflow
of foreign exchange and increasing dollar earnings; (e) To generate new
and more job opportunities;”
WHEREAS, Presidential Decree No. 474 likewise states that to attain the
foregoing objectives, the Government, through the Maritime Industry
Authority (MARINA), shall:
“(a)
Adopt and implement a practicable and coordinated Maritime Industry
Development Program which shall include, among others, the early
replacement of obsolescent and uneconomic vessels; modernization and
expansion of the Philippine merchant fleet, enhancement of domestic
capability for shipbuilding, repair and maintenance; and the
development of reservoir of trained manpower;
(b) Provide
and help provide the necessary; (i) financial assistance to the
industry through public and private financing institutions and
instrumentalities; (ii) technological assistance; and (iii) in general,
a favorable climate for expansion of domestic and foreign investments
in shipping enterprises; and
(c) Provide
for the effective supervision, regulation and rationalization of the
organizational management, ownership and operations of all water
transport utilities, and other maritime enterprises.”
WHEREAS, the growth of the national economy on a sustained basis
required an efficient water transport industry to ferry passengers and
cargo at reasonable and competitive rates.
NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the
Philippines, by virtue of the powers vested in me by law, do hereby
order:
1.
The entry of new operators into the domestic water transport industry
shall be liberalized to enhance the level of competition and bring
about reasonable rates and improved quality of services.
1.1.
Opening-up of all Routes
Public interest and public
convenience call for the levelling of the playing field for all
existing and new operators in the domestic water transport industry.
Competition, provided it is not ruinous, should be the norm to open-up
the industry to new investments and to stimulate further economic
activity.
1.1.1.
All routes/links shall have a minimum of two (2) operators.
Routes/links presently serviced by only one (1) operator, or
monopolized or cartelized as determined by MARINA, shall be open for
entry to additional operators.
1.1.2. All
routes/links which have been serviced by any operator for an aggregate
period of at least five (5) years shall be open for entry to additional
operators without limit.
1.2.
Encouraging Entry Into Developmental Routes
The entry of operators in
developmental routes as determined by MARINA shall be encouraged. An
operator who pioneers in the provision of a certain technological
level/type of shipping service in a developmental route shall be
authorized to charge market-accepted freight and passage rates
differing from the authorized fork-tariff, if availed of; Provided,
that the operator shall apply with MARINA for the adjustment in or
adoption of such rates, the approval of which shall be accordingly
granted; and Provided, further, that after five (5) years of such
operation, the continued authorization of such rates, or adjustments
thereof, shall be dependent on an evaluation undertaken by
MARINA.
1.3.
Deregulating Entry of Newly-Acquired Vessels Into Routes Already Served
By Franchised Operators
1.3.1.
An existing or new operator who acquires a vessel through importation,
bareboat charter with option to purchase, lease-purchase, or local
construction, shall be granted a Certificate of Public Convenience
(CPC)/Provisional Authority (PA) and allowed to operate such vessel in
any route, even if already being served by existing franchised
operators for less than five (5) years, including developmental routes;
Provided, that the prescribed application for CPC has been filed, and
the basic requisites prior to issuance thereof have been complied with;
Provided, further, that upon filing of the application for CPC, the
presumption of public need shall be accorded in favor of the applicant,
especially but not necessarily when any of the following conditions
shall be shown to obtain:
1.3.1.1.
The proposed operation shall introduce innovative,
technologically-advanced, or pioneering shipping services in the route
applied for, such as, but not limited to, the deployment of fast
ferries, cruise vessels, container vessels and RoRo vessels, or the
employment of modern and efficient on-board cargo handling equipment as
an integral part of the vessel’s operation;
1.3.1.2. The
proposed operation shall introduce improvements in the quality of
service being provided in the applied route/link;
1.3.1.3. The
vessel proposed to be deployed shall serve as an improvement over the
existing vessels operating therein, either in terms of the vessel’s
age, size, capacity, hull material and other vessel technical features;
1.3.1.4. The
proposed operation shall foster cost-effective/competitive shipping
service in the route proposed to be served;
1.3.1.5. The
proposed operation shall service priority tourist links as identified
by the Department of Tourism in its Tourism Master Plan;
1.3.1.6. The
route/link applied for warrants additional operators/services, as
determined by MARINA or by pertinent local government units, resulting
in public invitations for additional services therein.
This condition covers cases
where there is a duly verified and legitimate public clamor for
additional shipping services and it has been determined that existing
authorized operators in the route/link have not been sensitive to an
increase in demand by offering to increase capacity only after another
operator has offered to provide additional services therein; and
1.3.1.7. Where
existing authorized operators have abandoned their operations in a
given route.
Any oppositor to the application
shall bear the burden of proving that there is no need for the proposed
service.
Provided, finally, that the
vessel, upon issuance of the CPC, shall continuously serve its
franchised route for at least one (1) year.
1.4.
Vessel Rerouting Or Amendment Of Authorized Route And Change In Sailing
Schedules And Frequency
Any change or amendment to the
authorized routing pattern of a vessel can be undertaken by an existing
authorized operator thru the following: (1) omission or deletion of
port(s); (2) addition of other port(s); (3) omission and subsequent
addition of port(s); (4) changing the sequence of port calls; (5)
retention of authorized routing pattern but with addition of one or
more ports. Vacated port(s) or link(s)/route(s) as a result of the
above shall be looked into by MARINA insofar as adequacy or sufficiency
of the remaining existing shipping services is concerned:
1.4.1.
Approval shall be granted to applications for any of the above forms of
change or amendment of authorized routing pattern by existing
franchised liner vessels, Provided, that:
1.4.1.1.
No conflict in sailing schedules with other affected operators in the
applied route/link shall result therefrom, otherwise, the MARINA shall
prescribe, motu propio, sailing schedules that will best serve public
interest and convenience;
1.4.1.2. No
route or link shall be left unserviced by the rerouting or route
amendment, unless a substitute vessel from the applicant will be
deployed therein, or vessel(s) from other existing authorized operators
are left serving the route/link; and
1.4.1.3.
Shipping service in the previous route/link has been continuously
rendered by the vessel for at least one (1) year from issuance of
CPC.
1.4.2.
If the rerouting or route amendment of a vessel is caused by the
deployment of a newly acquired vessel (either through importation,
bareboat charter with option to purchase, lease purchase or local
construction) into the authorized route of an operator, the policy of
liberalized entry into any route under Section 1.3 above shall be
applied.
1.4.3. If no
newly-acquired vessel is involved and an application is filed for the
rerouting or route amendment of a vessel, where an entirely new route
or link will be served, a new application for CPC shall be filed and
entry therein will depend on whether any of the conditions or
circumstances enumerated in Section 1.3 above has been proven to
obtain. Priority shall, however, be given to newly-acquired vessels
brought into the fleet, subject to Section 1.3, in the grant of CPC to
a given route.
1.4.4. In
cases where only a temporary authority has so far been issued to a
vessel, pending resolution of the basic application for CPC, an
application for amendment of route or rerouting may be filed and
considered by the MARINA, but the amended authority to be issued as a
result thereof, shall be subject to the one (1) year maximum period per
issuance to be cumulatively reckoned from the first PA issued in the
original application.
2.
All government departments, offices, agencies, or instrumentalities,
including government-owned or controlled corporations, such as the
Board of Investments, Bureau of Customs, Bureau of Fisheries and
Aquatic Resources, Bureau of Plant Industry, Bureau of Animal Industry,
National Quarantine Office, Philippine Navy, and the Philippine
National Police, are hereby ordered to assist and coordinate with
MARINA in the implementation of this Executive Order.
3. This
Executive Order revokes or amends all executive, department and other
agency issuances or any provision thereof inconsistent with this
Executive Order. The MARINA is hereby directed to issue rules and
regulations to implement this Executive Order.
4. This
Executive Order shall take effect fifteen (15) days after its
publication once in a newspaper of general circulation.
DONE in the City of Manila,
this 28th day of June in the year of Our Lord, Nineteen Hundred and
Ninety-Four.
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