Guidelines for Temporary Philippine Registry

Legal basis and controlling framework

P.D. 866 and P.D. 1711 are the governing statutes for chartering and temporary Philippine registry issuance addressed by these guidelines.
The Circular requires compliance with the legal and regulatory framework on Philippine flag vessels, including other laws, rules, and regulations pertaining to Philippine flag vessels.
Existing MARINA Memorandum Circulars remain in full force and effect if not inconsistent with this Circular.

Policy, purpose, and governing standards

The Circular establishes eligibility and documentary controls to ensure that vessels chartered under P.D. 866/1711 operate under conditions consistent with Philippine flag registry requirements.
The Circular requires technical, managerial, financial, and documentary readiness before charter authority is approved and maintained after approval.
The Circular imposes administrative accountability for breaches of registry-related post-approval obligations.

Applicant qualifications and eligibility

Only Philippine nationals authorized to principally engage in overseas shipping and duly accredited by MARINA may charter and register any foreign-owned vessel under P.D. 866/1711.
The applicant’s principal officers (e.g., President, Vice-President for Operations, General Manager, Freight/Chartering Managers, or their equivalents) must have at least three (3) years experience in both ship and shipping management.
The applicant must have an owner’s equity or paid-up capital of at least P1.5M for the first three (3) chartered vessels and must increase it to P2.5M for the charter of additional vessels in excess of three.
The corporate name must be indicative of the company’s principal purpose as engaged in chartering or overseas shipping, and any word or term that would create the impression the company is merely an agent or auxiliary must be eliminated or amended.
The applicant’s chartering structure is restricted by ownership and chartering ratios and time limits:
- Where the applicant bareboat charters, the limit is at most seven (7) vessels for every owned vessel of at least 5,000 DWT registered permanently under the Philippine flag.
- Where the applicant does not own any vessel, it may initially bareboat charter five (5) vessels for a maximum of four (4) years per vessel.
- Bareboat contracts in this initial non-ownership scenario cannot be extended beyond four (4) years maximum unless the applicant acquires at least one (1) vessel of at least 5,000 DWT through direct purchase or through conversion of the bareboat charter into a lease-irrevocable purchase financing scheme requiring a downpayment of at least ten percent (10%) and no “balloon” payments beyond the first half of the charter period.
- After meeting the condition of acquiring at least one (1) vessel of at least 5,000 DWT under permanent Philippine registry, the applicant may bareboat charter up to seven (7) vessels, provided the ratio of bareboat chartered tonnage to owned tonnage is maintained at a maximum of 7:1 in terms of number of vessels.
Where the applicant owns the vessel to be bareboat chartered and the vessels are registered under a foreign flag, the applicant may bareboat charter such vessels without limitations, provided evidence of ownership is submitted to MARINA.
The vessel must meet technical requirements at application:
- The vessel must be classed by a recognized international classification society and must have a valid Continuous Machinery Survey (CMS) and Continuous Hull Survey (CHS) at the time of application issued by an international accredited classification society.
- The vessel must not be more than 15 years old, but in meritorious cases it may be more than fifteen (15) years old but in no case more than twenty-five (25) years old.
- Vessel age is reckoned from the date of launching.
The project’s technical, management, financial, and economic evaluation must be favorable.
Applicants must pay a filing fee per vessel:
- P4,000 per vessel; and
- P5,000 per vessel for an application involving vessels sixteen (16) years old and above.
Pro-forma charter documents must follow international standards:
- Pro-forma bareboat (and time charter) contracts must be in accordance with international chartering practices.
The applicant must have submitted proof of withholding tax:
- Proof of payment of withholding tax of 4.5% corresponding to previously chartered vessels of the company must be submitted or must have been submitted.

Pre-approval and post-approval documentary conditions

The applicant must submit a certification by an internationally accredited classification society that the vessel’s class is maintained to MARINA not later than thirty (30) days from approval of the charter.
The applicant must submit copies of duly executed and authenticated bareboat and time charter party to MARINA not later than thirty (30) days from execution, and in no case later than six (6) months from approval of the charter.
The applicant must submit copies of duly executed lease-financing agreements to MARINA not later than thirty (30) days after MARINA approval of the request.
The applicant must remove and take possession of original-flag documents:
- All documents and certificates issued to the vessel by the original flag of registry which are on board must be removed from the vessel and taken possession of by the charterer within thirty (30) days after accepting delivery of the vessel.
The vessel must operate under Philippine registry identifiers immediately and continuously during the charter:
- After registration and acceptance of delivery, the vessel must immediately and at all times during the charter period utilize the Philippine flag and call sign duly authorized by the Philippine Coast Guard and National Telecommunications Commission, respectively.
The vessel’s name must be changed to a Filipino name as required and approved by MARINA; names derived from Filipino language combinations are acceptable where approved.
Manning and crew nationalities must be Philippine-compliant:
- The vessel must be completely manned by Filipino officers and crew, and no foreign officer/crew is allowed onboard except as supernumeraries.
- For specialized vessels, foreign officers/crew may be allowed in lieu of Filipino officers/crew only for a maximum period of six (6) months.
Shipping articles must be filed with MARINA:
- Copies of all shipping articles must be submitted within thirty (30) days from execution.
Visual proof of registry must be filed:
- A colored photograph (at different angles) showing the place of registry in the astern portion of the vessel must be submitted to MARINA within thirty (30) days after registration under Philippine flag.
The company must submit an oath of undertaking within the required timeframe:
- Not later than thirty (30) days from approval of the charter, the company must submit to MARINA an oath of undertaking duly signed by its duly authorized representative pursuant to a resolution of the Board of Directors.
- The undertaking must include the obligations that (a) as bareboat charterer the company will remove original-flag documents/certificates after Philippine registration and delivery acceptance and will take possession of them, and will keep Philippine flag and authorized call sign at all times during the charter period; and (b) if a violation is committed, the approval of charter is cancelled, and the vessel ceases to be a Philippine-registered vessel with involved persons immediately relieved.
- The undertaking must also state that if the company violates the conditions it is subject to an administrative fine of P100,000 and is barred for a maximum of five (5) years from bareboat chartering under P.D. 866/1711.
Withholding tax quarterly proof must be submitted:
- Proof of quarterly payment of withholding tax must be submitted to MARINA within forty-five (45) days after each quarter.
General compliance obligation:
- The company must comply with all laws, rules and regulations pertaining to Philippine flag vessels.
Registry and delivery acceptance documents must be submitted:
- A copy of the Certificate of Philippine Registry and Protocol Delivery and Acceptance must be submitted to MARINA within ninety (90) days from receipt of approval of authority to charter.

Limits and special chartering rules

The charter limits are defined by owned vessel tonnage and the maximum 7:1 ratio expressed in terms of number of vessels for bareboat chartered tonnage versus owned tonnage.
Initial bareboat chartering without owned vessels is limited to five (5) vessels for a maximum of four (4) years per vessel.
Extending the four-year bareboat duration beyond the maximum period is allowed only if the applicant acquires at least one vessel of at least 5,000 DWT through direct purchase or converts the bareboat charter into a lease-irrevocable purchase financing scheme with a required downpayment of at least 10% and no “balloon” payments beyond the first half of the charter period.
Where the applicant owns the bareboat-chartered vessel and it is registered under a foreign flag, bareboat chartering may be done without the chartering ratio limitations, upon submission of evidence of ownership to MARINA.

Sanctions and administrative penalties

Violations of the post-approval conditions are sanctioned based on which conditions are breached:
- Violations of post-approval conditions other than conditions no. 4 and 5 are sanctioned by administrative fines, penalties, or forfeitures as follows:
  - First violation: fine of not more than P10,000.00.
  - Second violation: fine of not more than P20,000.00.
  - Continued willful neglect or refusal to comply: fine of not more than P20,000.00 per month (or a fraction thereof) of default, or revocation of approval of the bareboat charter contract, or cancellation of the Permanent Certificate of Philippine Registry (PCPR) of the vessel.
- Violations of post-approval conditions no. 4 and 5 are sanctioned by an administrative fine of P100,000.00 and bar the company or firm from bareboat chartering under P.D.s 866/1711 for a maximum period of five (5) years.
Violations of other laws, rules, and regulations pertaining to Philippine flag vessels are meted the same penalties and fines provided therein.
For fines under the undertaking clause, the administrative fine stated for company violations is P100,000, and the bar period is a maximum of five (5) years from bareboat chartering under P.D. 866/1711.

Hearing, decision, finality, and execution

For purposes of imposing fines, penalties, or forfeitures, MARINA—through its Legal Office and Office of Overseas Shipping—shall conduct a hearing to allow the shipping entity to explain the circumstances of the violation.
The Legal Office and Office of Overseas Shipping shall adopt their own rules and procedures, provided sufficient notice is given to all parties concerned.
The findings and recommendations of the Legal Office and Office of Overseas Shipping are forwarded to the Administrator for decision.
The Administrator’s decision becomes final and executory after fifteen (15) days from receipt of the decision unless appealed within that period to the Maritime Industry Authority Board.
The Maritime Industry Authority Board decision is final and immediately executory.

Transitory and consistency clauses

Existing MARINA Memorandum Circulars not inconsistent with this Circular remain in full force and effect.
The Circular provides immediate effect upon adoption and issuance.