Philippine Overseas Shipping Development Act

"Philippine overseas shipping": Transport by Philippine-flagged ships operated by Philippine shipping enterprises, excluding domestic routes.
"Philippine shipping enterprise": Filipino citizens or corporations with at least 60% Filipino ownership engaged exclusively in overseas shipping.
"MARINA": Maritime Industry Authority.
"Monetary authority": Central Bank and other agencies managing foreign exchange controls.
"Regulations": Rules promulgated under the Act.

Foreign exchange for purchasing, repairing, or operating oceangoing vessels is available to Philippine shipping enterprises upon MARINA's recommendation, subject to regulations.

Vessels acquired must be approved by MARINA and financed without Philippine banking system guarantees.
The vessel itself serves as the sole collateral; no other assets are pledged.
All foreign exchange requirements for loan servicing and vessel operation must come from vessel earnings.
Mortgage and financing documents must be filed with monetary authorities.
Excess foreign exchange earnings must be remitted and surrendered to Philippine banking.

Importation of oceangoing vessels and spare parts for repair exempt from import duties and taxes.
Items must be consigned to accredited dry-docking or repair facilities or directly to the vessel.
Unauthorized possession of exempted items results in payment of full duties, surcharges, and penalties.
Local sellers of machinery and parts to Philippine shipping enterprises are entitled to tax credits on import duties paid, subject to Finance Department approval.

Income from overseas shipping exempt from income tax for 10 years post-approval.
Net income, less up to 10% for dividends, must be reinvested in vessels and related equipment or modernization.
Reinvested amounts must remain deposited for 10 years or until full payment of vessels or equipment.
Non-reinvested or prematurely withdrawn amounts are subject to income tax plus penalties.

All vessels owned by enterprises enjoying incentives must be Philippine-flagged.
Vessels may be removed from the registry only if no other Philippine enterprise seeks to acquire them or when scrapping is necessary, subject to MARINA determination.

President may requisition vessels during war or emergencies.
Compensation based on fair market value if taken permanently or fair charter value if temporarily.
Arbitration committee with representatives from MARINA, owner/operator, and a jointly appointed member settles disputes.
Arbitration decisions are final and binding.

MARINA, in collaboration with monetary authority and Finance Department, formulates rules for Act implementation.
Policies consider government programs for overseas shipping development.

MARINA must submit annual reports to President and Congress including:
- Foreign exchange earned and spent.
- Tax exemptions granted.
- Vessel acquisition and improvements.
- Other information as required.

Violations punishable by up to P10,000 fine and/or up to 5 years imprisonment.
Corporate violations also implicate presidents, CEOs, and responsible officials.
Government officials face dismissal and administrative sanctions in addition to penalties.

Act takes effect 15 days after publication in two newspapers of general circulation.