Scope of Application
- Applies to all entities engaged in domestic water transport for compensation.
- Covers passenger and cargo transport between Philippine ports, both liner and tramper services.
Definitions
- Certificate of Public Convenience (CPC): Authorization to operate without franchise.
- Provisional Authority (PA): Temporary operation permit pending CPC decision.
- Liner Service: Scheduled, regular port calls, non-discriminatory service.
- Tramp Service: Contractual, non-regular freight operations.
- Financial Capability: Adequate funding and insurance.
- Public Interest/Convenience: Benefit for majority or all.
- Prior Operator/Applicant Rule: Priority based on existing or earlier applicants.
- Protection of Investment: Safeguarding past operator investments.
- Wholesome/Constructive Competition: Quality and efficiency based competition without financial harm.
- Franchised and Authorized Operators: Hold CPC or PA.
- Authorized Route: Specific ports and patterns under CPC/PA.
- Innovative and Cost-effective Service: New technologies or competitive pricing.
- Monopoly: Single or collusive operator dominance.
- Developmental Routes: Economically desirable but underserved routes.
- Reasonable Spacing of Sailing Schedules: Minimum departure intervals.
- Withdrawal and Abandonment: Temporary or unauthorized service suspensions.
- Vessel Rerouting, Replacement, Expansion: Changes in route or capacity.
- Fork Tariff System: Rate fluctuation within prescribed limits.
- Commodity Classifications: Class A (high value), B, and C (basic goods).
General Policy on CPC Issuance
- Applicants must be Filipino citizens or entities majority-owned by Filipinos.
- Must be financially capable.
- Must promote public interest above other considerations.
- Compliance with safety and service standards required.
- Public interest is paramount over prior rights and investment protection.
Entry and Exit Liberalization
- Minimum of two operators per route to avoid monopoly.
- Encouragement of service on developmental routes.
- Newly acquired vessels allowed entry even in served routes if qualifying.
- Vessel rerouting and route amendments allowed with conditions.
- Market surveys for monitoring only; entry decisions prioritize public need.
- Limitations may apply based on port capacity.
- Withdrawal or suspension must be notified; unauthorized abandonment for 4+ months leads to forfeiture.
- Capacity expansion and vessel substitution allowed.
- Cargo liner vessel swapping and port sequence changes permitted within authorized limits.
Quality Standards and Service Improvement
- Implementation of Minimum Service Standards for passenger comfort.
- Routes may be declared needing improvement based on petition and survey.
Franchise Issuance Guidelines
- Validity of CPC based on vessel age and type (steel, wooden, bancas).
- No CPC for steel vessels over 30 years old or wooden vessels over 20 years unless classed.
- Provisional Authority valid for one year pending CPC decision.
- Failure to comply within one year leads to dismissal of application.
Rate and Fare Policies
- Fork tariff of +10% and -15% around MARINA reference rates.
- Fuel adjustment mechanism applies with 10% fuel price change.
- First and Second Class passage rates deregulated but 50% capacity must be Third Class, except for tourism certified vessels.
- Second Class regulated if no or insufficient Third Class.
- Basic commodity class abolished; certain commodities deregulated.
- Deregulation of certain Class A and B commodities allowed with approval.
Institutional Mechanisms
- Regular vessel inspections for compliance and quality.
- Route capacity monitoring for public advisories on entry.
- Consultations with stakeholders on tariff, service, and regulations.
Financial Capability Determination
- Requirement of sufficient working capital (2 months expenses minus 2 months revenues).
- Satisfactory insurance or security coverage for accident claims.
- Deficiency requires proof of increased capital.
Technical Evaluation
- Ensures safe, adequate service as required by public interest.
- Only vessels meeting standards allowed to operate.
- Competent officers and crew required.
Penalties and Sanctions
- Violations may lead to disapproval, suspension, or revocation of CPC/PA.
- Due notice and hearing required before sanctions.
Repealing Clause
- Supersedes earlier MARINA Memorandum Circulars 26, 39, and 71.
Effectivity
- Circular effective 15 days after publication in a newspaper of general circulation.