Question & AnswerQ&A (MIA)
The primary purpose is to develop and maintain a modern and well-equipped Philippine Merchant Marine, assist in the expansion of Philippine Overseas Shipping to meet international trade demands, encourage private investment in vessel acquisition and modernization without direct government financial aid, and create a healthy climate for private enterprises.
A Philippine Shipping Enterprise is a citizen of the Philippines or an association or corporation organized under Philippine laws, where at least 60% of the capital is owned by Filipino citizens, and is exclusively engaged in Philippine Overseas Shipping.
They are entitled to avail foreign exchange from the Philippine Banking System for the purchase of vessels under the Philippine flag, payment for repairs abroad, importation of spare parts, and other operating expenses incurred in foreign ports or high seas, subject to MARINA approval and Monetary Authority regulations.
When recommended by MARINA, importation of vessels for registration under the Philippine flag and spare parts for repair or overhaul, destined either to an accredited Philippine dry-docking or repair facility or the vessel itself, are exempt from import duties and taxes.
The enterprise must derive income directly from Philippine Overseas Shipping, reinvest the entire net income (minus up to 10% for dividends) in vessel-related activities by May 2005, not distribute reinvested income as dividends until May 2012 or full payment of assets, and submit reports to the BIR. Any withdrawal or failure to reinvest shall be subject to income tax and penalties.
Violations may be penalized by fines up to P10,000, imprisonment of up to five years, or both. If committed by corporations, officers like the President and Treasurer may be held liable, and government officials committing violations shall be dismissed and face administrative penalties.
Appeals from any decision of the MARINA may be taken to the Secretary of Transportation and Communications within thirty days from receipt of the decision.
All vessels owned or operated by Philippine Shipping Enterprises availing of incentives must be registered under the Philippine flag. Deletion from the registry can only be allowed after MARINA finds no other interested enterprises or the vessel needs to be scrapped, supported by specific documents and board resolutions.
In times of war or national emergency, the President may requisition vessels absolutely or temporarily for naval or military purposes, with payment by the government of the fair market value or fair charter value, and any disagreements are subject to arbitration by a committee composed of representatives from MARINA, the vessel owner/operator, and a neutral chairman.
Philippine Shipping Enterprises must ensure that at least 60% of their capital is owned by Filipino citizens to comply with the provisions and be eligible for incentives under the Act.