Transportation Law (Course Outline)

TRANSPORTATION LAW
(2018 EDITION)
COURSE OUTLINE
PART ONE – PUBLIC UTILITIES
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I. General Discussion
a. What is Public Utility?
b. What is Public Service?
c. Legal Basis and Rationale for Regulation
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d. Where does the Power to Regulate Public Utilities Reside?
Relate to Public Service Act 13(a)
Section 13. (a) The Commission shall have jurisdiction, supervision, and control over
all public services and their franchises, equipment, and other properties, and in the
exercise of its authority, it shall have the necessary powers and the aid of the public
force: Provided, That public services owned or operated by government entities or
government-owned or controlled corporations shall be regulated by the Commission
in the same way as privately-owned public services, but certificates of public
convenience or certificates of public convenience and necessity shall not be required
of such entities or corporations: And provided, further, That it shall have no authority
to require steamboats, motor ships and steamship lines, whether privately-owned, or
owned or operated by any Government controlled corporation or instrumentality to
obtain certificate of public convenience or to prescribe their definite routes or lines of
service.
e. What happened to the Public Service Commission?
f. Not a Public Utility
See Public Service Act. Sec 14 for enterprises not covered by definition of public
service
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Section 14. The following are exempted from the provisions of the preceding section:
(a) Warehouses;
(b) Vehicles drawn by animals and bancas moved by oar or sail, and tugboats
and lighters;
(c) Airships within the Philippines except as regards the fixing of their maximum
rates on freight and passengers;
(d) Radio companies except with respect to the fixing of rates;
(e) Public services owned or operated by any instrumentality of the National

Government or by any government-owned or controlled corporation, except
with respect to the fixing of rates. (As amended by Com. Act 454, RA No. 2031,
and RA No. 2677 )
II. Constitutional Provisions

a. See Article XII, Secs 6,11,17,18,19 1987 Constitution
b. Ownership
Additional Readings
SEC MC No. 8-2013 (Guidelines on Compliance with Filipino-Foreign Ownership

Requirements)
Relate to Public Service Act Sec 16(a) and Sec 20(i)
Section 16. Proceedings of the Commission, upon notice and hearing. - The
Commission shall have power, upon proper notice and hearing in accordance with the
rules and provisions of this Act, subject to the limitations and exceptions mentioned
and saving provisions to the contrary :
(a) To issue certificates which shall be known as certificates of public

convenience, authorizing the operation of public service within the Philippines
whenever the Commission finds that the operation of the public service
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proposed and the authorization to do business will promote the public interest
in a proper and suitable manner. Provided, That thereafter, certificates of public
convenience and certificates of public convenience and necessity will be
granted only to citizens of the Philippines or of the United States or to
corporations, co-partnerships, associations or joint-stock companies
constituted and organized under the laws of the Philippines; Provided, That
sixty per centum of the stock or paid-up capital of any such corporations, co-
partnership, association or joint-stock company must belong entirely to citizens
of the Philippines or of the United States: Provided, further, That no such
certificates shall be issued for a period of more than fifty years.
Section 20. Acts requiring the approval of the Commission. - Subject to established
limitations and exceptions and saving provisions to the contrary, it shall be unlawful
for any public service or for the owner, lessee or operator thereof, without the approval
and authorization of the Commission previously had –
(i) To sell, alienate or in any manner transfer shares of its capital stock to any
alien if the result of that sale, alienation, or transfer in itself or in connection
with another previous sale shall be the reduction to less than sixty per
centum of the capital stock belonging to Philippine citizens. Such sale,
alienation or transfer shall be void and of no effect and shall be sufficient
cause for ordering the cancellation of the certificate.
c. Exclusivity
d. Subject to Amendment
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e. Fixed Term
f. Take-over power
g. Privatization of State Operated Public Utilities
III. Regulation of Public Utilities

a. Authority to Operate
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Relate to Public Service Act, Sec 16(a), Sec. 18

Section 18. It shall be unlawful for any individual, co-partnership, association,

corporation or joint-stock company, their lessees, trustees or receivers appointed by
any court whatsoever, or any municipality, province, or other department of the
Government of the Philippines to engage in any public service business without having
first secured from the Commission a certificate of public convenience or certificate of
public convenience and necessity as provided for in this Act, except grantees of
legislative franchises expressly exempting such grantees from the requirement of
securing a certificate from this Commission as well as concerns at present existing
expressly exempted from the jurisdiction of the Commission, either totally or in part,
by the provisions of section thirteen of this Act.
i. General Qualifications
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ii. Revocation or Cancellation
iii. CPC vs. CPCN
See Public Service Act, Section 15
Section 15. With the exception of those enumerated in the preceding section, no
public service shall operate in the Philippines without possessing a valid and
subsisting certificate from the Public Service Commission known as "certificate of
public convenience," or "certificate of public convenience and necessity," as the case
may be, to the effect that the operation of said service and the authorization to do
business will promote the public interests in a proper and suitable manner.
The Commission may prescribe as a condition for the issuance of the certificate
provided in the preceding paragraph that the service can be acquired by the Republic
of the Philippines or any instrumentality thereof upon payment of the cost price of its
useful equipment, less reasonable depreciation; and likewise, that the certificate shall
be valid only for a definite period of time; and that the violation of any of these
conditions shall produce the immediate cancellation of the certificate without the
necessity of any express action on the part of the Commission.
In estimating the depreciation, the effect of the use of the equipment, its actual
condition, the age of the model, or other circumstances affecting its value in the market
shall be taken into consideration.
The foregoing is likewise applicable to any extension or amendment of certificates

actually in force and to those which may hereafter be issued, to permit to modify
itineraries and time schedules of public services, and to authorizations to renew and
increase equipment and properties.
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i. Undue Delegation
ii. Provincial Rates
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iii. Rate Refund
iv. Vis-à-vis Power to Grant Authority
C. Area Operation
d. Approval of Sale and Mortgages of Public Utility Assets or Equity
Public Service Act. Section 20(g), (h), and (i)
and authorization of the Commission previously had -
(g) To sell, alienate, mortgage, encumber or lease its property, franchises, certificates,
privileges, or rights or any part thereof; or merge or consolidate its property, franchises
privileges or rights, or any part thereof, with those of any other public service. The
approval herein required shall be given, after notice to the public and hearing the
persons interested at a public hearing, if it be shown that there are just and reasonable
grounds for making the mortgaged or encumbrance, for liabilities of more than one
year maturity, or the sale, alienation, lease, merger, or consolidation to be approved,
and that the same are not detrimental to the public interest, and in case of a sale, the
date on which the same is to be consummated shall be fixed in the order of approval:
Provided, however, that nothing herein contained shall be construed to prevent the
transaction from being negotiated or completed before its approval or to prevent the
sale, alienation, or lease by any public service of any of its property in the ordinary
course of its business.
(h) To sell or register in its books the transfer or sale of shares of its capital stock, if
the result of that sale in itself or in connection with another previous sale, shall be to
vest in the transferee more than forty per centum of the subscribed capital of said
public service. Any transfer made in violation of this provision shall be void and of no
effect and shall not be registered in the books of the public service corporation. Nothing
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herein contained shall be construed to prevent the holding of shares lawfully acquired.
(As amended by Com. Act No. 454.)
(i) To sell, alienate or in any manner transfer shares of its capital stock to any alien if
the result of that sale, alienation, or transfer in itself or in connection with another
previous sale shall be the reduction to less than sixty per centum of the capital stock
belonging to Philippine citizens. Such sale, alienation or transfer shall be void and of
no effect and shall be sufficient cause for ordering the cancellation of the certificate.
e. Power to set fees and other charges
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f. Other means of regulation
See Public Service Act, Section 16 and 20

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(b) To approve, subject to constitutional limitations any franchise or privilege

granted under the provisions of Act No. Six Hundred and Sixty-seven, as
amended by Act No. One Thousand and twenty-two, by any political subdivision
of the Philippines when, in the judgment of the Commission, such franchise or
privilege will properly conserve the public interests, and the Commission shall
in so approving impose such conditions as to construction, equipment,
maintenance, service, or operation as the public interests and convenience may
reasonably require, and to issue certificates of public convenience and
necessity when such is required or provided by any law or franchise.
(c) To fix and determine individual or joint rates, tolls, charges, classifications,
or schedules thereof, as well as commutation, mileage, kilometrage, and other
special rates which shall be imposed observed and followed thereafter by any
public service: Provided, That the Commission may, in its discretion, approve
rates proposed by public services provisionally and without necessity of any
hearing; but it shall call a hearing thereon within thirty days, thereafter, upon
publication and notice to the concerns operating in the territory affected:
Provided, further, That in case the public service equipment of an operator is
used principally or secondarily for the promotion of a private business, the net
profits of said private business shall be considered in relation with the public
service of such operator for the purpose of fixing the rates.
(d) To fix just and reasonable standards, classifications, regulations, practices,

measurement, or service to be furnished, imposed, observed, and followed
thereafter by any public service.
(e) To ascertain and fix adequate and serviceable standards for the
measurement of quantity, quality, pressure, initial voltage, or other condition
pertaining to the supply of the product or service rendered by any public service,
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and to prescribe reasonable regulations for the examination and test of such
product or service and for the measurement thereof.
(f) To establish reasonable rules, regulations, instructions, specifications, and

standards, to secure the accuracy of all meters and appliances for
measurements.
(g) To compel any public service to furnish safe, adequate, and proper service
as regards the manner of furnishing the same as well as the maintenance of
the necessary material and equipment.
(h) To require any public service to establish, construct, maintain, and operate
any reasonable extension of its existing facilities, where in the judgment of said
Commission, such extension is reasonable and practicable and will furnish
sufficient business to justify the construction and maintenance of the same and
when the financial condition of the said public service reasonably warrants the
original expenditure required in making and operating such extension.
(i) To direct any railroad, street railway or traction company to establish and
maintain at any junction or point of connection or intersection with any other line
of said road or track, or with any other line of any other railroad, street railway
or traction to promote, such just and reasonable connection as shall be
necessary to promote the convenience of shippers of property, or of
passengers, and in like manner direct any railroad, street railway, or traction
company engaged in carrying merchandise, to construct, maintain and operate,
upon reasonable terms, a switch connection with any private sidetrack which
may be constructed by any shipper to connect with the railroad, street railway
or traction company line where, in the judgment of the Commission, such
connection is reasonable and practicable and can be out in with safety and will
furnish sufficient business to justify the construction and maintenance of the
same.
(j) To authorize, in its discret

ion, any railroad, street railway or traction company to lay its tracks across the
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tracks of any other railroad, street railway or traction company or across any
public highway.
(k) To direct any railroad or street railway company to install such safety devices
or about such other reasonable measures as may in the judgment of the
Commission be necessary for the protection of the public are passing grade
crossing of (1) public highways and railroads, (2) public highways and streets
railway, or (3) railways and street railways.
(l) To fix and determine proper and adequate rates of depreciation of the
property of any public service which will be observed in a proper and adequate
depreciation account to be carried for the protection of stockholders,
bondholders or creditors in accordance with such rules, regulations, and form
of account as the Commission may prescribe. Said rates shall be sufficient to
provide the amounts required over and above the expense of maintenance to
keep such property in a state of efficiency corresponding to the progress of the
industry. Each public service shall conform its depreciation accounts to the
rates so determined and fixed, and shall set aside the moneys so provided for
out of its earnings and carry the same in a depreciation fund. The income from
investments of money in such fund shall likewise be carried in such fund. This
fund shall not be expended otherwise than for depreciation, improvements, new
construction, extensions or conditions to the properly of such public service.
(m) To amend, modify or revoke at any time certificate issued under the
provisions of this Act, whenever the facts and circumstances on the strength of
which said certificate was issued have been misrepresented or materially
changed.
(n) To suspend or revoke any certificate issued under the provisions of this Act
whenever the holder thereof has violated or willfully and contumaciously
refused to comply with any order rule or regulation of the Commission or any
provision of this Act: Provided, That the Commission, for good cause, may prior
to the hearing suspend for a period not to exceed thirty days any certificate or
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the exercise of any right or authority issued or granted under this Act by order
of the Commission, whenever such step shall in the judgment of the
Commission be necessary to avoid serious and irreparable damage or
inconvenience to the public or to private interests.
(o) To fix, determine, and regulate, as the convenience of the state may require,
a special type for auto-busses, trucks, and motor trucks to be hereafter
constructed, purchased, and operated by operators after the approval of this
Act; to fix and determine a special registration fee for auto-buses, trucks, and
motor trucks so constructed, purchased and operated: Provided, That said fees
shall be smaller than more those charged for auto-busses, trucks, and motor
trucks of types not made regulation under the subsection.
and authorization of the Commission previously had -
(a) To adopt, establish, fix, impose, maintain, collect or carry into effect any
individual or joint rates, commutation, mileage or other special rate, toll, fare,
charge, classification or itinerary. The Commission shall approve only those
that are just and reasonable and not any that are unjustly discriminatory or
unduly preferential, only upon reasonable notice to the public services and
other parties concerned, giving them a reasonable opportunity to be heard and
the burden of the proof to show that the proposed rates or regulations are just
and reasonable shall be upon the public service proposing the same.
(b) To establish, construct, maintain, or operate new units or extend existing

facilities or make any other addition to or general extension of the service.
(c) To abandon any railroad station or stop the sale of passenger tickets, or
cease to maintain an agent to receive and discharge freight at any station now
or hereafter established at which passenger tickets are now or may hereafter
be regularly sold, or at which such agent is now or may hereafter be maintained,
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or make any permanent change in its time tables or itineraries on any railroad
or in its service.
(d) To lay any railroad or street railway track across any highway, so as to make
a new crossing at grade, or cross the tracks of any other railroad or street
railway, provided, that this subsection shall not apply to replacements of lawfully
existing tracks.
(e) Hereafter to issue any stock or stock certificates representing an increase

of capital; or issue any share of stock without par value; or issue any bonds or
other evidence of indebtedness payable in more than one year from the
issuance thereof, provided that it shall be the duty of the Commission, after
hearing, to approve any such issue maturing in more than one year from the
date thereof, when satisfied that the same is to be made in accordance with
law, and the purpose of such issue be approved by the Commission. (f) To
capitalize any franchise in excess of the amount, inclusive of any tax or annual
charge, actually paid to the Government of the Philippines or any political
subdivision thereof as the consideration of said franchise; capitalize any
contract for consolidation, merger or lease, or issue any bonds or other
evidence of indebtedness against or as a lien upon any contract for
consolidation, merger, or lease: Provided, however, that the provisions of this
section shall not prevent the issuance of stock, bonds, or other evidence of
indebtedness subject to the approval of the Commission by any lawfully merged
or consolidated public services not in contravention of the provisions of this
section.
(g) To sell, alienate, mortgage, encumber or lease its property, franchises,

certificates, privileges, or rights or any part thereof; or merge or consolidate its
property, franchises privileges or rights, or any part thereof, with those of any
other public service. The approval herein required shall be given, after notice
to the public and hearing the persons interested at a public hearing, if it be
shown that there are just and reasonable grounds for making the mortgaged or
encumbrance, for liabilities of more than one year maturity, or the sale,
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alienation, lease, merger, or consolidation to be approved, and that the same
are not detrimental to the public interest, and in case of a sale, the date on
which the same is to be consummated shall be fixed in the order of approval:
Provided, however, that nothing herein contained shall be construed to prevent
the transaction from being negotiated or completed before its approval or to
prevent the sale, alienation, or lease by any public service of any of its property
in the ordinary course of its business.
(h) To sell or register in its books the transfer or sale of shares of its capital
stock, if the result of that sale in itself or in connection with another previous
sale, shall be to vest in the transferee more than forty per centum of the
subscribed capital of said public service. Any transfer made in violation of this
provision shall be void and of no effect and shall not be registered in the books
of the public service corporation. Nothing herein contained shall be construed
to prevent the holding of shares lawfully acquired. (As amended by Com. Act
No. 454.)
(i) To sell, alienate or in any manner transfer shares of its capital stock to any
alien if the result of that sale, alienation, or transfer in itself or in connection with
another previous sale shall be the reduction to less than sixty per centum of the
capital stock belonging to Philippine citizens. Such sale, alienation or transfer
shall be void and of no effect and shall be sufficient cause for ordering the
cancellation of the certificate.
(j) To issue, give or tender, directly or indirectly, any free ticket free pass or free
or reduced rate of transportation for passengers, except to the following
persons: (1) officers, agents, employees, attorneys, physicians and surgeons
of said public service, and members of their families; (2) inmates of hospitals or
charity institutions, and persons engaged in charitable work; (3) indigent,
destitute, and homeless persons when transported by charitable societies or
hospitals, and the necessary agents employed in such transportation; (4) the
necessary caretakers, going and returning, of livestock, poultry, fruit, and other
freight under uniform and non-discriminatory regulation; (5) employees of
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sleeping car corporations, express corporations and telegraph and telephone
corporations, railway and marine mail service employees, when traveling in the
course of their official duly; (6) post-office inspectors, customs officers and
inspectors, and immigration inspectors when engaged in inspection; (7)
witnesses attending any legal investigation in which the public service is an
interested party; (8) persons injured in accidents or wrecks, and physicians and
nurses attending such persons; (9) peace officers and men of regularly
constituted fire departments. (As amended by Com. Act No. 454.)
(k) Adopt, maintain, or apply practices or measures, rules or regulations to

which the public shall be subject in its relations with the public service.
g. Due Process requirements
PART TWO: TRANSPORTATION LAW
Page 5
I. General Discussion
a. Definition
b. Relationship to a Public Utility
c. Nature of a Franchise
d. Scope of a Franchise
e. Prior-operator Rule
f. Kabit System
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Page 6
g. Private nature; rights and obligations of parties inter se arising

from transactions relation to transportation
i.absent a transportation contract
ii. liability of registered owner
II. Regulation of the Transportation Industry

a. Department of Transportation and Communication, EO 292 Book IV, Title
XV
Executive Order No. 292 [BOOK IV/Title XV/Chapter 1-General Provisions]
Signed on July 25, 1987
TITLE XV
Transportation and Communications
CHAPTER 1
General Provisions
SECTION 1. Declaration of Policy.—The State is committed to the maintenance and

expansion of viable, efficient, fast, safe and dependable transportation and
communications systems as effective instruments for national recovery and economic
progress. It shall not compete as a matter of policy with private enterprise and shall
operate transportation and communications facilities only in those areas where private
initiatives a
re inadequate or non-existent.
SECTION 2. Mandate.—The Department of Transportation and Communications shall

be the primary policy, planning, programming, coordinating, implementing, regulating
and administrative entity of the Executive Branch of the government in the promotion,
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development and regulation of dependable and coordinated networks of transportation
and communications systems as well as in the fast, safe, efficient and reliable postal,
transportation and communications services.
SECTION 3. Powers and Functions.—To accomplish its mandate, the Department

shall:
(1) Formulate and recommend national policies and guidelines for the preparation and
implementation of integrated and comprehensive transportation and communications
systems at the national, regional and local levels;
(2) Establish and administer comprehensive and integrated programs for

transportation and communications, and for this purpose, it may call on any agency,
corporation or organization, whether public or private, whose development programs
include transportation and communications as integral parts thereof, to participate and
assist in the preparation and implementation of such programs;
(3) Assess, review and provide direction to transportation and communications

research and development programs of the government in coordination with other
institutions concerned;
(4) Administer and enforce all laws, rules and regulations in the field of transportation
and communications;
(5) Coordinate with the Department of Public Works and Highways in the design,
location, development, rehabilitation, improvement, construction, maintenance and
repair of all infrastructure projects and facilities of the Department. However,
government corporate entities attached to the Department shall be authorized to
undertake specialized telecommunications, ports, airports and railways projects and
facilities as directed by the President of the Philippines or as provided by law;
(6) Establish, operate and maintain a nationwide postal system that shall include mail
processing, delivery services and money order services and promote the art of
philately;
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(7) Issue certificates of public convenience for the operation of public land and rail
transportation utilities and services;
(8) Accredit foreign aircraft manufacturers or international organizations for aircraft

certification in accordance with established procedures and standards;
(9) Establish and prescribe rules and regulations for identification of routes, zones or
areas of operation of particular operators of public land services;
(10) Establish and prescribe rules and regulations for the establishment, operation and
maintenance of such telecommunications facilities in areas not adequately served by
the private sector in order to render such domestic and overseas services that are
necessary with due consideration for advances in technology;
(11) Establish and prescribe rules and regulations for the issuance of certificates of
public convenience for public land transportation utilities, such as motor vehicles,
trimobiles and railways;
(12) Establish and prescribe rules and regulations for the inspection and registration
of air and land transportation facilities, such as motor vehicles, trimobiles, railways and
aircraft;
(13) Establish and prescribe rules and regulations for the issuance of licenses to
qualified motor vehicle drivers, conductors and airmen;
(14) Establish and prescribe the corresponding rules and regulations for enforcement
of laws governing land transportation, air transportation and postal services, including
the penalties for violations thereof, and for the deputation of appropriate law
enforcement agencies in pursuance thereof;
(15) Determine, fix or prescribe charges or rates pertinent to postal services and to the
operation of public air and land transportation utility facilities and services, except such
rates or charges as may be prescribed by the Civil Aeronautics Board under its charter
and, in cases where charges or rates are established by international bodies or
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associations of which the Philippines is a participating member or by bodies or
associations recognized by the Philippine government as the proper arbiter of such
charges or rates;
(16) Establish and prescribe the rules, regulations, procedures and standards for the
accreditation of driving schools;
(17) Administer and operate the Civil Aviation Training Center (CATC) and the
National Telecommunications Training Institute (NTTI); and
(18) Perform such other powers and functions as may be provided by law.
SECTION 4. Organizational Structure.—The Department shall consist of the

Department Proper, the Department Regional Offices, the Land Transportation
Franchising and Regulatory Board, and the Attached Agencies.
i. Air
1. Republic Act No. 9497 March 04, 2008
AN ACT CREATING THE CIVIL AVIATION AUTHORITY OF THE PHILIPPINES,

AUTHORIZING THE APPROPRIATION OF FUNDS THEREFOR, AND FOR
OTHER PURPOSES
CHAPTER II
ORGANIZATION OF AUTHORITY
SEC. 4. Creation of the Authority. - There is hereby created an independent

regulatory body with quasi-judicial and quasi-legislative powers and possessing
corporate attributes to be known as the Civil Aviation Authority of the Philippines
(CAAP), hereinafter referred to as the "Authority" attached to the Department of
Transportation and Communications (DOTC) for the purpose of policy coordination.
For this purpose, the existing Air Transportation Office created under the provisions of
Republic Act No. 776, as amended, is hereby abolished.
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Notwithstanding the foregoing, nothing in this Act shall diminish the powers and
functions of the Civil Aeronautics Board (CAB) as provided for under Republic Act. No.
776, also known as "The Civil Aeronautics Act of the Philippines", as amended.
(a) Establishment of Authority Headed by a Director General - The Authority shall

beheaded by a Director General of Civil Aviation, referred to in this Act as the "Director
General," who shall be appointed by the President of the Philippines and shall be
responsible for all civil aviation in the Philippines and the administration of this Act.
The Director General shall be appointed based on the qualifications herein provided
and shall have a tenure of office for a period of four (4) years. His appointment may
be extended for another non-extendible term of four (4) years and shall only be
removed for cause in accordance with the rules and regulations prescribed by the Civil
Service Commission.
(b) Responsibility of the Director General - The Director General shall be responsible
for the exercise of all powers and the discharge of all duties of the Authority and shall
have control over all personnel and activities of the Authority.
CHAPTER III
GENERAL POLICIES
SEC. 21. Policies. - In the exercise and performance of its powers and duties under
this Act, the Authority shall consider the following, among other things, as being in the
public interest and in accordance with the public convenience and necessity:
(a) The development and utilization of the air potential of the Philippines;
(b) The encouragement and development of an air transportation system

properly adapted to the present and future of foreign and domestic commerce
of the Philippines;
(c) The regulation of air transportation in such manner as to support sound

economic condition in such transportation and to improve the relations between
air carriers;
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(d) Ensuring the safety, quality, reliability, and affordability of air transport
services for the riding public; and
(e) The encouragement and development of a viable and globally competitive

Philippine aviation industry.
CHAPTER V
POWERS AND FUNCTIONS OF THE BOARD
SEC. 24. Powers of the Board. - The Board shall have the following general powers:
(a) Provide comprehensive policy guidance for the promotion and development
of the Philippine aviation industry, as provided for in this Act;
(b) Ensure that the Authority performs its functions in a proper, efficient and
effective manner;
(c) Decide the objectives, strategies and policies of the Authority in accordance
with the provisions of this Act;
(d) Determine the organizational structure of the Authority in accordance with

the provisions of this Act, establish a human resources management system
based on merit and fitness, and adopt a rational compensation and benefits
scheme;
(e) Exercise appellate powers on any decisions, findings and rulings of the
Director General, to issue subpoena ad testificandum or subpoena duces
tecum requiring the attendance and testimony of witnesses in any matter or
inquiry pending before the Board and require the production of books, papers,
contracts, agreements and all other documents submitted for purposes of this
section to be under oath and verified by the person in custody thereof as to the
truth and correctness of data appearing in such books, papers, tariffs, contracts,
agreements and all other documents;
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(f) Exercise appellate powers to order the taking of depositions in any
proceeding, or investigation, pending before the Board at any stage of such
proceeding or investigation;
(g) Use available services, equipment, personnel and facilities of other

agencies of the Philippine Government, on a reimbursable basis when
appropriate and, on a similar basis, to co-operate with those agencies in the
establishment and use of services, equipment and facilities of the Authority;
(h) Use the property of the Authority in such a manner as may appear to the
Authority to be requisite, advantageous or convenient with a view to making the
best use of any of the property of the Authority in relation to its functions under
this Act;
(i) Invest such of the Authority's funds that are not immediately required for
operating expenses, or other immediate obligations in any business venture the
Board may deem appropriate, or in such secured note, government securities,
and other negotiable instruments that satisfy the guidelines prescribed by the
Board. Funds of the Authority shall be deposited in such commercial and
universal banks as the Board may determine, subject to the requirements of
existing laws. The Board shall designate the officials authorized to deposit in or
withdraw funds from such depository banks;
(j) Promulgate rules and regulations as may be necessary in the interest of

safety in air commerce pertaining to the issuance of the airman's certificate
including the licensing of operating and mechanical personnel, type certificate
for aircraft, aircraft engines, propellers and appliances, airworthiness
certificates, air carrier operating certificates, air agency certificates, navigation
facility and aerodrome certificates; air traffic routes; radio and aeronautical
telecommunications and air navigation aids; aircraft accident inquiries;
aerodromes, both public and private-owned; construction of obstructions to
aerodromes; height of buildings; antennae and other edifices; registration of
aircrafts; search and rescue; facilitation of air transports; operations of aircrafts,
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both for domestic and international, including scheduled and non-scheduled;
meteorology in relation to civil aviation; rules of the air; air traffic services; rules
for prevention of collision of aircrafts, identification of aircraft; rules for safe
altitudes of flight; and such other rules and regulations, standards, governing
other practices, methods and/or procedures as the Director General may find
necessary and appropriate to provide adequately for safety regularity and
efficiency in air commerce and air navigation;
(k) Impose and fix reasonable charges and fees for the use of government
aerodromes or air navigation facilities; for services rendered by the Authority in
the rating of any aerodrome or air navigation facilities, civil aviation schools and
instructors, aircraft repair stations, and aircraft radio and aeronautical
telecommunications stations;
(l) Fix the reasonable charges to be imposed in the use of privately-owned air
navigation facilities and aerodromes;
(m) Adopt a system for the registration of aircraft as hereinafter provided;
(n) Determine and fix, landing fees, parking space fees, royalties on sales or
deliveries, direct or indirect, to any aircraft for its use of aviation gasoline, oil
and lubricants, spare parts, accessories and supplies, tools, other royalties,
fees or rentals for the use of any of the property under its management and
control;
(o) Approve the annual and supplementary budget plan and utilization of
retained revenue;
(p) Exercise the corporate powers granted to the Authority;
(q) Upon its own initiative or the recommendation of the Director General or an
application of a private person, grant exemption from the requirements of
observing rules or regulations issued in accordance with this Act: Provided,
That said grant of exemption is not prejudicial to flight safety;
22
(r) Formulate rules and regulations concerning compliance of the carrier and
the public for the safe transport of goods and materials by air pursuant to
international standards or Annexes to the Chicago Convention; and
(s) In coordination with the appropriate government agency tasked to provide

airport security, shall:
(1) Prescribe reasonable regulation requiring that all passengers and all
property intended to be carried in the aircraft cabin in commercial air
transport be screened by weapon-detecting procedure or facilities
employed or operated by employees or agents of the air operator or
foreign air operator prior to boarding the aircraft for such transportation;
(2) Prescribe such other reasonable rules and regulations requiring such
parties, methods and procedures as the Director General may find
necessary to protect persons and property aboard aircraft operating in
commercial air transport against acts of criminal violence and aircraft
piracy; and
(3) To the extent practicable, require uniform procedures for the

inspection, detention, and search of persons and property in domestic
commercial air transport and international commercial air transport to
assure their safety and to assure that they will receive courteous and
efficient treatment by air operators and their agents and employees.
SEC. 25. Issuance of Rules and Regulations. - The Board, in consultation with the
Director General, shall issue and provide for the enforcement of such orders, rules
and regulations as may be necessary to give effect to the provisions of this Act. All
rules and regulations issued in accordance with the provisions of this Act shall be
formally promulgated and periodically reviewed and updated in accordance with the
requirements of the Administrative Code of the Philippines or any amendment or
successor thereto and the International Civil Aviation Organization Standards and
Recommended Practices. Pending the promulgation of such new rules and
regulations, the current rules and regulations of the AT0 shall continue to apply.
23
CHAPTER VII
THE DIRECTOR GENERAL
SEC. 35. Powers and Functions of the Director General. - The Director General
shall be the chief executive and operating officer of the Authority. He shall have the
following powers, duties and responsibilities:
(a) To carry out the purposes and policies established in this Act; to enforce the
provisions of the rules and regulations issued in pursuance to said Act; and he
shall primarily be vested with authority to take charge of the technical and
operational phase of civil aviation matters;
(b) To designate and establish civil airways, to acquire, control, operate and
maintain along such airways, navigation facilities and to chart such airways and
arrange for their publication including the aeronautical charts or maps required
by the international aeronautical agencies, by utilizing the equipment, supplies
or assistance of existing agencies of the government as far as practicable;
(c) To issue airman's certificate specifying the capacity in which the holder
thereof is authorized to serve as airman in connection with aircraft and shall be
issued only upon the finding that the applicant is properly qualified and
physically able to perform the duties of the position. The certificate shall contain
such terms, conditions and limitations as the Director General may determine
to be necessary to assure safety in air commerce: Provided, however, That the
airman's license shall be issued only to qualified persons who are citizens of
the Philippines or qualified citizens of countries granting similar rights and
privileges to citizens of the Philippines;
(d) To issue airworthiness certificate for aircraft which shall prescribe the
duration of such certificate, the type of service for which the aircraft may be
used, and such other terms and conditions and limitations as are required;
(e) To issue air carrier operating certificate in accordance with the minimum
safety standards for the operation of the air carrier to whom such certificate is
24
issued. The air carrier operating certificate shall be issued only to aircrafts
registered under the provisions of this Act;
(f) To issue type certificate for aircraft, aircraft engine, propellers and
appliances;
(g) To inspect, classify and rate any air navigation facilities and aerodromes
available for the use of aircraft as to its suitability for such use and to issue a
certificate for such air navigation facility and aerodrome; and to determine the
suitability of foreign aerodromes, air navigation facilities as well as air routes to
be used prior to the operation of Philippine-registered aircraft in foreign air
transportation and from time to time thereafter as may be required in the interest
of safety in air commerce;
(h) To issue certificates of persons or civil aviation schools giving instruction in

flying, repair stations, and other air agencies and provide for the examination
and rating thereof;
(i) To provide for the enforcement of the rules and regulations issued under the
provisions of this Act and to conduct investigation for violations thereto. In
undertaking such investigation, to require by subpoena ad
testificandum or subpoena duces tecum, the attendance and testimony of
witnesses, the production of books, papers, documents, exhibits matter,
evidence, or the taking of depositions before any person authorized to
administer oath. Refusal to submit the reasonable requirements of the
investigation committee shall be punishable in accordance with the provisions
of this Act;
(j) To collect and disseminate information relative to civil aeronautics and the
development of air commerce and the aeronautical industry; to exchange with
foreign governments, information pertaining to civil aeronautics; and to provide
for direct communication on all matters relating to the technical or operational
phase of aeronautics with international aeronautical agencies:
25
(k) To acquire and operate such aircraft as may be necessary to execute the
duties and functions of the Authority prescribed in this Act;
(l) To plan, design, acquire, establish, construct, operate, improve, maintain,

and repair necessary aerodromes and other air navigation facilities;
(m) To collect and receive charges and fees for the registration of aircraft and
for the issuance and/or renewal of licenses or certificates for aircraft, aircraft
engines, propellers and appliances, and airmen as provided in this Act;
(n) To impose fines and/or civil penalties in respect thereto;
(o) To participate actively with the largest possible degree in the development
of international standardization of practices in aviation matters important to
safe, expeditious, and easy navigation, and to implement as far as practicable
the international standards, recommended practices and policies adopted by
appropriate international aeronautical agencies;
(p) To exercise and perform its powers and duties under this Act consistent with
any obligation assumed by the Republic of the Philippines in any treaty,
convention or agreement on civil aviation matters;
(q) To cooperate, assist and coordinate with any research and technical agency
of the government on matters relating to research and technical studies on
design, materials, workmanship, construction, performance, maintenance and
operation of aircraft, aircraft engines, propellers, appliances, and air navigation
facilities including aircraft fuel and oil: Provided, That nothing in this Act shall
be construed to authorize the duplication of the laboratory research, activities
or technical studies of any existing governmental agency;
(r) To designate such prohibited and danger areas, in consonance with the
requirements of the international aeronautical agencies and national security;
26
(s) To issue, deny, suspend, cancel or revoke any certificate, license pertaining
to aircraft, airmen and air agencies: Provided, That any order denying,
suspending, cancelling, revoking the certificate or license may he appealed to
the Board, whose decisions shall he final within fifteen (15) days from the date
of notification of such denial, cancellation or revocation;
(t) To grant authorization to civil aircraft or persons to carry instruments or

photographic devices to be used for aerial photography or taking of pictures by
photograph or sketching of any part of the Philippines; and
(u) Pursuant to a board resolution, to enter into, make and execute contracts of
any kind with any person, firm, or public or private corporation.
Additional Readings
Convention for International Civil Aviation (*Chicago Convention”)
Article 6. Scheduled air services- No scheduled international air service may be

operated over or into the territory of a contracting State, except with the special
permission or other authorization of that State, and in accordance with the terms of
such permission or authorization.
Article 9. Prohibited areas –
(a) Each contracting State may, for reasons of military necessity or public safety,
restrict or prohibit uniformly the aircraft of other States from flying over certain areas
of its territory, provided that no distinction in this respect is made between the aircraft
of the State whose territory is involved, engaged in international scheduled airline
services, and the aircraft of the other contracting States likewise engaged. Such
prohibited areas shall be of I reasonable extent and location so as not to interfere
unnecessarily with air navigation. Descriptions of ~ such prohibited areas in the
territory of a contracting State, as well ae any subsequent alterations therein, shall be
communicated as soon as possible to the other contracting States and to the
International Civil Aviation Organization.
27
(b) Each contracting State reserves also the right, in exceptional circumstances or
during a period of emergency, or in the interest of public safety, and with immediate
effect, temporarily to restrict or prohibit flying over the whole or any part of it6 territory,
on condition that such restriction or prohibition shall be applicable without distinction
of nationality to aircraft of all other States.
(c) Each contracting State, under such regulations as it may prescribe, may require
any aircraft entering the areas contemplated in subparagraphs (a) or (b) above to
effect a landing as soon as practicable thereafter at some designated airport within its
territory.
CHAPTER VI
INTERNATIONAL STANDARDS AND RECOMMENDED PEACTICES
Article 37. Adoption of International Standards and Procedures - Each contracting

State undertakes to collaborate in securing the highest practicable degree of uniformity
in regulations, standards, procedures, and organization in relation to aircraft,
personnel, airways and auxiliary services in all matters in which such uniformity will
facilitate and improve air navigation. To this end the International Civil Aviation
Organization shall adopt and amend from time to time, as may be necessary,
international. standards and recommended practices and procedures dealing with:
(a) Communications systems and e.ir navigation aids, including ground marking;
(b) Characteristics of airports and landing areas;
(c) Rules of the air and air traffic control practices;
(d) Licensing of operating and mechanical personnel;
(e) Airworthiness of aircraf;
(f) Registration and identification of aircraft;
(g) Collection and exchange of meteorological Information;
(h) Log book;
28
(i) Aeronautical maps and charts;
(j) Customs and immigration procedures;
(k) Aircraft in distress and investigation
of accidents; and such other matters concerned with the safety, regularity, and
efficiency of air navigation as may from time to time appear appropriate
Article 38. Departures from international standards and procedures - Any State which
finds it impracticable to comply from international in all respects with any such
international standard or procedure, or to bring its own regulations or regulations or
practices into full accord with any international standard or procedure after amendment
of the latter,or which deems it necessary to adopt regulations or practices differing in
any particular respect from those established by an international standard, shall give
immediate notification to the International Civil Aviation Organization of the differences
between its own practice and that established by the international standard. In the
case of amendments to international standards, any State which does not make the
appropriate amendments to its own regulations or practices shall give notice to the
Council within sixty days of the adoption of the amendment to the international
standard, or indicate the action which it proposes to take. In any such case, the Council
shall make immediate notification to all other states of the difference which exists
between one or more features of an international standard and the corresponding
national practice of that State.
CHAPTER VII THE ORGANIZATION
Article 43. Name and Composition - An organization to be named the International

Civil Aviation Organization is formed by the Convention. It is made up of an Assembly,
a Council, and such other bodies as may be necessary.
Article 44. Objectives - The aims and objectives of the Organization are to develop
the principles and. techniques of international air navigation tins- to foster the planning
and development of international air transport so as
(a) Insure the safe and orderly growth of international & civil aviation throughout the
29
(b) Encourage the arts of aircraft design and operation for peaceful purposes;
(c) Encourage the development of airways, airports, and air navigation facilities for
International civil aviation;
(d) Meet the needs of the peoples of the world for safe, regular, efficient and
economical air transport;
(e) Prevent economic waste caused by unreasonable competition;
(f) Insure that the rights of contracting States are fully respected end that every
contracting State has a fair opportunity to operate international airlines;
(g) Avoid discrimination between contracting States;
(h) Promote safety of flight in international air navigation;
(i) Promote generally the development of all aspects of international civil aeronautics.
Article 87. Penalty for non-conformity of airline - Each contracting State undertakes
not to allow the operation of an airline of a contracting State through the airspace
above its territory if the Council has decided that the airline concerned is not
conforming to a final decision rendered in accordance with the previous article.
2. REPUBLIC ACT NO. 776 (As amended by PD No. 1462 & EO No. 217) AN
ACT, TO REORGANIZE THE CIVIL AERONAUTICS BOARD AND THE CIVIL
AERONAUTICS ADMINISTRATION TO PROVIDE FOR THE REGULATION
OF CIVIL AERONAUTICS IN THE PHILIPPINES AND AUTHORIZING THE
APROPRIATION OF FUNDS THEREFOR
CHAPTER III - CIVIL AERONAUTICS BOARD
SECTION 5. Composition of the Board. - The Civil Aeronautics Board shall be

composed of the Secretary of Transportation and Communications or his designated
representative as Chairman, the Assistant Secretary for Air Transportation of the
Department of Transportation and Communications as Vice-Chairman, the
Commanding General of the Philippine Air Force* and two (2) members to be
30
appointed by the President of the Philippines. They shall hold office at the pleasure of
the President.
SECTION 10. Powers and duties of the Board. - (A) Except as otherwise provided
herein, the Board shall have the power to regulate the economic aspect of air
transportation, and shall have the general supervision and regulation of, the
jurisdiction and control over, air carriers, general sales agents, cargo sales agents,
and airfreight forwarders as well as their property, property rights, equipment, facilities,
and franchise, in so far as may be necessary for the purpose of carrying out the
provisions of this Act.
(C) The Board shall have the following specific powers and duties:
(1) In accordance with the provisions of Chapter 4 of this Act, to issue, deny,
amend, revise, alter, modify, cancel, suspend, or revoke, in whole or in part, upon
petition or complaint, or upon its own initiative, any temporary operating permit or
Certificate of Public Convenience and Necessity; Provided, however, That in the case
of
foreign air carriers, the permit shall be issued with the approval of the President of the
Republic of the Philippines.
(2) To fix and determine reasonable individual, joint or special rates, charges
or fares, which an air carrier may demand, collect or receive for any service in
connection with air commerce. The Board may adopt any original, amended, or new
individual, joint or special rates, charges or fares proposed by an air carrier if the
proposed
individual, joint, or special rates, charges for fares are not unduly preferential or
unduly discriminatory or unreasonable. The burden of proof to show that the proposed
31
individual, joint or special rates, charges or fares are just and reasonable shall be upon
the
air carrier proposing the same.
In fixing rates, charges, fares under the provisions of this Act, the Board shall
take into consideration, among other factors:
(a) The effect of such rates upon the movement of traffic;
(b) The need in the public interest of adequate and
efficient transportation of persons and property by air carriers at the lowest cost
consistent with the furnishing of such service.
(c) Such standards respecting the character and quality of service to
be rendered by air carriers as may be prescribed by or pursuant to law;
(d) The inherent advantages of transportation by aircraft; and
(e) The need of each air carrier for revenues sufficient to enable
such air carrier, under honest, economical, and efficient management, to provide
adequate and efficient air carrier service.
(3) To authorize any type of charters whether domestic or international and
special air services or flight under such terms and conditions as in its judgment public
interest requires. Notwithstanding the existence of bilateral air agreement, the CAB is
authorized to grant any foreign airline increase in frequencies and/or capacities on
international routes when in its judgment the national interest requires it, provided that
the utilization of the increase frequencies and capacities is not more than thirty days.
All
32
grants of frequencies and/or capacities shall be subject to the approval of the
President.
(4) To approve or disapprove increase and/or decrease of capital, lease, purchase,
sales of aircraft of air carrier engaged in air commerce; consolidation, merger,
purchase, lease and acquisition and control of operating contracts between domestic
foreign air carriers, or between domestic air carriers or any person engaged in any
phase
of aeronautics.
(5) To inquire into the management of the business of any air carrier and, to
the extent reasonably necessary for such inquiry, to obtain from such carrier, and from
any person controlling, or controlled by, or under common control with, such air carrier,
full and complete reports and other informations. Such reports shall be under oath
whenever the Board so requires.
(6) To require annual, monthly, periodical, and special reports from any air
carrier, to prescribe the manner and form in which such reports shall be made, and to
require
from any air carrier specific answers to all questions upon which the Board may
deem information to be necessary. Such reports shall be under oath whenever the
Board
so requires. The Board may also require any air carrier to file with it any contract,
agreement, understanding or arrangement, or a true copy thereof, between such air

carrier
and any other carrier or person, in relation to any traffic affected by the provisions of
this
33
Act.
(7) To prescribe the forms of any and all accounts, records, and memoranda
of the movement of traffic, as well as of the receipts and expenditures of money, and
the length of times such accounts, records and memoranda shall be preserved:
Provided,
that any air carrier may keep additional accounts, records, or memoranda if they do
not impair the integrity of the accounts, records, or memoranda prescribed or approved
by
the Board and do not constitute an undue financial burden on such air carrier.
(8) To require each officer and director of any air carrier to transmit a report
describing the shares of stock with any persons engaged in any phase or other interest
held by such air carrier of aeronautics, and the holding of the stock in and control of,
other
persons engaged in any phase of aeronautics.
CHAPTER IV - Certificate of Public Convenience and Necessity
SECTION 11. Nature, terms and conditions. - Certificate of Public Convenience and
Necessity is a permit issued by the Board authorizing a person to engage in air
commerce and/or transportation, foreign and/or domestic. No person shall engage in
air commerce unless there is in force a permit issued by the Board.
No general sales agent, cargo sales agent or airfreight forwarder shall engage in any
of the activities mentioned in Section 3 paragraphs (jj), (kk) and (ll) respectively, unless
there is in force a permit or any other form of authorization issued by the Board.
Any permit may be altered, amended, modified, suspended, canceled or revoked by

the Board in whole or in part, upon complaints or petition or upon the Board's initiative
34
as hereinafter provided, whenever the Board finds such action to be in the public
interest.
There shall be attached to the exercise of the privileges granted by the permit, or
amendment thereto, such reasonable terms, conditions, or limitations as, in the
judgment of the Board, the public interest may require.
No permit shall confer any proprietary, property, or exclusive right in the use of any air
space, civil airway, landing area of government air navigation facility.
The permit shall, among others specify the terminal and intermediate points, if any,
between which the air carrier is authorized to operate the service to be rendered, the
time of arrival and departure at each point, and the frequency of flights. Provided, that
no change in routes, rates, schedules or frequency nor supplemental or additional
flights to those covered by an air commerce permit or franchise shall be affected
without prior approval of the Civil Aeronautics Board. In so far as the operation is to
take place within the Philippines, the permit shall designate the terminal and
intermediate points only insofar as the Board shall deem practicable, and otherwise
shall designate only the general route or routes to be followed.
No carrier shall abandon any route, or part thereof for which a permit has been issued,
unless upon findings by the Civil Aeronautics Board that such an abandonment is
uneconomical and is in the public interest.
SECTION 12. Citizenship requirement. - Except as otherwise provided, in the

Constitution and existing treaty or treaties, permit authorizing a person to engage in
domestic air commerce and/or transportation shall be issued only to citizens of the
Philippines.
ii. Land
1. AMENDING EXECUTIVE ORDER NO. 125, ENTITLED "REORGANIZING

THE MINISTRY OF TRANSPORTATION AND COMMUNICATIONS.
35
DEFINING ITS POWERS AND FUNCTIONS, AND FOR OTHER
PURPOSES."
Sec. 9. Assistant Secretaries and Service Chiefs. The Secretary shall also be assisted
by eight (8) Assistant Secretaries appointed by the President upon the
recommendation of the Secretary, each of whom shall respectively be responsible for
the following four (4) staff offices composed of eight (8) services and four (4) line
offices, and shall report to the respective Undersecretaries assigned by the Secretary,
which Undersecretary shall have control and supervision over said respective services
and offices:
a. Office of the Assistant Secretary for Administrative and Legal Affairs;

1. Administrative Service, and
a. Legal Service
b. Office of the Assistant Secretary for Finance and Comptrollership;
Finance and Management Service, and
Comptrollership Service
c. Office of the Assistant Secretary for Planning and Project Development;
Planning Service, and
Project Development Service
d. Office of the Assistant Secretary for Management Information Service and
Project Management;
Management Information Service, and
Project Management Service
e. Office of the Assistant Secretary for Land Transportation;
f. Office of the Assistant Secretary for Postal Services;
g. Office of the Assistant Secretary for Telecommunications;
h. Office of the Assistant Secretary for Air Transportation.
Each of the above-named services shall be headed by a service chief appointed

by the President upon the recommendation of the Secretary."
36
Sec. 11. Department Regional Offices. The Department shall have three (3)
Department Regional Offices in each of the administrative regions of the country: the
Department Regional Office for land Transportation, the Department Regional Office
for Telecommunications and the Department Regional Office for Postal Services. The
present Regional Offices of the Land Transportation Commission are hereby
abolished and their functions are transferred to the respective Department Regional
Offices for Land Transportation. The present Regional Offices of the Bureau of
Telecommunications are hereby abolished and their functions are transferred to the
respective Department Regional Offices for Telecommunications. The present
Regional Offices of the Bureau of Posts are hereby abolished and their functions are
transferred to the corresponding Department Regional Offices for Postal Services.
Each Department Regional Office shall be headed by a Department Regional Director
and assisted by a Department Assistant Regional Director. The present Airport Offices
of the Bureau of Air Transportation are hereby abolished and their functions are
transferred to the Department Airport Offices. The abolition of the herein Regional
Offices and the transfer of their functions shall be governed by the provisions of
Section 15 (b) hereof.
The Department Regional Offices shall essentially be line in character and shall be
responsible for the delivery of all front line services of the Department.
For such purposes, the Department Regional Offices shall have within their
respective administrative regions, the following functions:
a. Implement laws, and policies, plans, programs, projects, rules and regulations
of the Department;
b. Provide efficient, and effective service to the people;
c. Coordinate with regional offices of other departments, offices and agencies;
d. Coordinate with local government units;
e. Perform such other functions as may be provided by law.
37
Sec. 13. Abolition/Transfer/Consolidation:
a. The Land Transportation Commission is hereby abolished and its staff functions
are transferred to the service offices of the Department Proper and its line
functions are transferred to the Department Regional Offices for Land
Transportation as provided in Section 11 herein. Such transfer of functions is
subject to the provisions of Section 15 (b) hereof. The quasi-judicial powers and
functions of the Commission are transferred to the Department. The
corresponding position structure and staffing pattern shall be approved and
prescribed by the Secretary pursuant to Section 16 hereof.
INSTITUTING THE "ADMINISTRATIVE CODE OF 1987"
SECTION 9. Line Offices.—The Department shall have the following line offices:
(1) The Office of the Assistant Secretary for Land Transportation;
2. EXECUTIVE ORDER NO. 202 June 19, 1987
CREATING THE LAND TRANSPORTATION FRANCHISING AND

REGULATORY BOARD
Sec. 1. Creation of the Land Transportation Franchising and Regulatory Board. There
is hereby created in the Department of Transportation and Communications, the Land
Transportation Franchising and Regulatory Board hereinafter referred to as the
"Board".
Sec. 2. Composition of the Board. The Board shall be composed of a Chairman and
two (2) members with the same rank, salary and privileges of an Assistant Secretary,
all of whom shall be appointed by the President of the Philippines upon
recommendation of the Secretary of Transportation and Communications. One (1)
member of the Board shall be a member of the Bar and shall have engaged in the
practice of law in the Philippines for at least five (5) years, another a holder of a degree
38
in civil engineering, and the other a holder of a degree in economics, finance or
management both with the same number of years of experience and practice.
Sec. 4. Supervision and Control Over the Board. The Secretary of Transportation and
Communications, through his duly designated Undersecretary, shall exercise
administrative supervision and control over the Land Transportation Franchising and
Regulatory Board.
Sec. 5. Powers and Functions of the Land Transportation Franchising and Regulatory
Board. The Board shall have the following powers and functions:
a. To prescribe and regulate routes of service, economically viable capacities

and zones or areas of operation of public land transportation services provided
by motorized vehicles in accordance with the public land transportation
development plans and programs approved by the Department of
Transportation and Communications;
b. To issue, amend, revise, suspend or cancel Certificates of Public

Convenience or permits authorizing the operation of public land transportation
services provided by motorized vehicles, and to prescribe the appropriate terms
and conditions therefor;
c. To determine, prescribe and approve and periodically review and adjust,

reasonable fares, rates and other related charges, relative to the operation of
public land transportation services provided by motorized vehicles;
d. To issue preliminary or permanent injunction, whether prohibitory or

mandatory, in all cases in which it has jurisdiction, and in which cases the
pertinent provisions of the Rules of Court shall apply;
e. To punish for contempt of the Board, both direct and indirect, in accordance
with the pertinent provisions of, and the penalties prescribed by, the Rules of
Court;
39
f. To issue subpoena and subpoena duces tecum and summon witnesses to
appear in any proceedings of the Board, to administer oaths and affirmations;
g. To conduct investigations and hearings of complaints for violation of the

public service laws on land transportation and of the Board's rules and
regulations, orders, decisions and/or rulings and to impose fines and/or
penalties for such violations;
h. To review motu proprio the decisions/actions of the Regional Franchising and

Regulatory Office herein created;
i. To promulgate rules and regulations governing proceedings before the Board

and the Regional Franchising and Regulatory Office: Provided, That except with
respect to paragraphs d, e, f and g hereof, the rules of procedure and evidence
prevailing in the courts of laws should not be controlling and it is the spirit and
intention of said rules that the Board and the Regional Franchising and
Regulatory Offices shall use every and all reasonable means to ascertain facts
in its case speedily and objectively and without regard to technicalities of law
and procedures, all in the interest of due process;
j. To fix, impose and collect, and periodically review and adjust, reasonable fees
and other related charges for services rendered;
k. To formulate, promulgate, administer, implement and enforce rules and

regulations on land transportation public utilities, standards of measurements
and/or design, and rules and regulations requiring operators of any public land
transportation service to equip, install and provide in their utilities and in their
stations such devices, equipment facilities and operating procedures and
techniques as may promote safety, protection, comfort and convenience to
persons and property in their charges as well as the safety of persons and
property within their areas of operations;
40
l. To coordinate and cooperate with other government agencies and entities
concerned with any aspect involving public land transportation services with the
end in view of effecting continuing improvement of such services; and
m. To perform such other functions and duties as may be provided by law, or

as may be necessary, or proper or incidental to the purposes and objectives of
this Executive Order.
Sec. 6. Decision of the Board; Appeals therefrom and/or Review thereof. The Board,
in the exercise of its powers and functions, shall sit and render its decisions en banc.
Every such decision, order, or resolution of the Board must bear the concurrence and
signature of at least two (2) members thereof.
The decision, order or resolution of the Board shall be appealable to the Secretary
within thirty (30) days from receipt of the decision: Provided, That the Secretary may
motu proprio review any decision or action of the Board before the same becomes
final.
Sec. 7. Creation of Regional Franchising and Regulatory Offices. There shall be a

Regional Franchising and Regulatory Office in each of the administrative regions of
the country which shall be headed by a Board Regional Manager having the rank,
salary and privileges of a Department Assistant Regional Director. The Regional
Franchising and Regulatory Offices shall hear and decide uncontested
applications/petitions for routes, within their respective administrative regions:
Provided, That applications/petitions for routes extending their respective territorial
jurisdictions shall be heard and decided by the Board.
Executive Order No. 292 [BOOK IV/Title XV/Chapter 5-Regulatory Board]
Signed on July 25, 1987
CHAPTER 5
Regulatory Board
41
SECTION 15. Land Transportation Franchising and Regulatory Board.—The quasi-
judicial powers and functions with respect to land transportation shall be exercised
through the Land Transportation and Regulatory Board, hereinafter referred to as the
“Board”.
SECTION 16. Composition of the Board.—The Board shall be composed of a

Chairman and two (2) members with the rank, salary and privileges of an Assistant
Secretary, all of whom shall be appointed by the President of the Philippines upon
recommendation of the Secretary of Transportation and Communications. One (1)
member of the Board shall be a member of the Bar and shall have been engaged in
the practice of law in the Philippines for at least five (5) years, another a holder of a
degree in civil engineering, and the other a holder of a degree in economics, finance
or management both with the same number of years of experience and practice.
SECTION 17. Executive Director and Support Staff of the Board.—The Board shall
have an Executive Director who shall also be appointed by the President of the
Philippines upon the recommendation of the Secretary of Transportation and
Communications. He shall have the rank, salary and privileges of a Department
Service Chief. He shall assist the Board in the performance of its powers and functions.
The Board shall be supported by the Technical Evaluation Division, Legal Division,
Management Information Division, Administrative Division and Finance Division.
SECTION 18. Supervision and Control Over the Board.—The Secretary of

Transportation and Communications, through his duly designated Undersecretary,
shall exercise administrative supervision and control over the Land Transportation
Franchising and Regulatory Board.
SECTION 19. Powers and Functions of the Land Transportation Franchising and
Regulatory Board.—The Board shall:
42
(1) Prescribe and regulate routes, economically viable capacities, and zones or areas
of operation of public land transportation services provided by motorized vehicles in
accordance with the public land transportation development plans and programs
approved by the Department of Transportation and Communications;
(2) Issue, amend, revise, suspend or cancel Certificates of Public Convenience or

permits authorizing the operation of public land transportation services provided by
motorized vehicles, and prescribe the appropriate terms and conditions therefor;
(3) Determine, prescribe, approve and periodically review and adjust reasonable fares,
rates and other related charges, relative to the operation of public land transportation
services provided by motorized vehicles;
(4) Issue preliminary or permanent injunction, whether prohibitory or mandatory, in all

cases in which it has jurisdiction and in which cases the pertinent provisions of the
Rules of Court shall apply;
(5) Punish for contempt of the Board, both direct and indirect, in accordance with the
pertinent provisions of, and the penalties prescribed by, the Rules of Court;
(6) Issue subpoena and subpoena duces tecum and to summon witnesses appear in
any proceedings of the Board, to administer oaths and affirmations, and, in appropriate
cases, to order the search and seizure of all vehicles and documents, upon probable
cause and as may be necessary for the proper disposition of the cases before it;
(7) Conduct investigations and hearings of complaints for violation of the public service
laws on land transportation and of the Board’s rules and regulations, orders, decisions
or rulings and to impose fines or penalties for such violations;
(8) Review motu proprio the decisions/actions of the Regional Franchising and
Regulatory Offices;
(9) Promulgate rules and regulations governing proceedings before the Board and the
Regional Franchising and Regulatory Office. However, except with respect to
43
paragraphs 4, 5, 6 and 7 hereof, the rules of procedure and evidence prevailing in the
courts of law should not be controlling but rather the spirit and intention of said rules.
The Board and the Regional Franchising and Regulatory Offices shall use every and
all reasonable means to ascertain facts in each case speedily and objectively and
without regard to technicalities of law and procedures, all in the interest of due process;
(10) Fix, impose and collect, and periodically review and adjust, reasonable fees and
other related charges for services rendered;
(11) Formulate, promulgate, administer, implement and enforce rules and regulations
on land transportation public utilities, standards of measurements or design, and rules
and regulations requiring operators of any public land transportation service to equip,
install and provide in their utilities and in their stations such devices, equipment,
facilities and operating procedures and techniques as may promote safety, protection,
comfort and convenience to persons and property in their charges as well as the safety
of persons and property within their areas of operation;
(12) Coordinate and cooperate with other government agencies and entities
concerned with any aspect involving public land transportation services with the end
in view of effecting continuing improvement of such services; and
(13) Perform such other functions and duties as may be provided by law, or as may
be necessary, or proper or incidental to the purposes and objectives of the
Department;
SECTION 20. Decisions of the Board; Appeals therefrom or Review Thereof.—The

Board, in the exercise of its powers and functions, shall sit and render its decision en
banc. Every such decision, order, or resolution of the Board must bear the concurrence
and signature of at least two (2) members thereof.
The decision, order or resolution of the Board shall be appealable to the Secretary
within thirty (30) days from receipt of the decision. However, the Secretary may motu
proprio review any decision or action of the Board before the same becomes final.
44
SECTION 21. Regional Franchising and Regulatory Offices.—There shall be a
Regional Franchising and Regulatory Office in each of the administrative regions of
the country which shall be headed by a Regional Director having the rank, salary and
privileges of a Department Assistant Regional Director. The Regional Franchising and
Regulatory Offices shall hear and decide uncontested applications/petitions for routes,
within their respective administrative regions but that applications/petitions for routes
extending beyond their respective territorial jurisdiction shall be heard and decided by
the Board.
SECTION 22. Appeals.—The decisions, orders or resolutions of the Regional

Franchising and Regulatory Offices shall be appealable to the Board within thirty (30)
days from receipt of the decision.
Page 7
iii. Water
EXECUTIVE ORDER NO. 125 REORGANIZING THE MINISTRY OF

TRANSPORTATION AND COMMUNICATIONSDEFINING ITS POWERS AND
FUNCTIONS AND FOR OTHER PURPOSES
SECTION 14. Maritime Industry Authority. The Maritime Industry Authority is

hereby retained and shall have the following functions:
(a) Develop and formulate, plans, policies, programs, project, standards,

specifications and guidelines geared towards the promotion and development of
the Maritime Industry, the growth and effective regulation of shipping enterprises,
for the national security objectives of the country;
(b) Establish, prescribe and regulate routes, zones and /or areas of operation of
particular operators of public water services;
(c) Issue certificates of public convenience for the operation of domestic and
overseas water carriers; (d) Register vessels as well as issue certificates, licenses
45
or documents necessary or incident thereto; (e) Undertake the safety regulatory
functions pertaining to vessels construction and operations including the
determination of manning levels and issuance of certificates competency to
seamen;
(f) Enforce laws, prescribe and enforce rules and regulation, including penalties for
violation thereof, governing water transportation and the Philippine merchant
marine with the aid of other law enforcement agencies;
(g) Undertake the issuance of licenses to qualified seamen and harbor, bay and
river pilots; (h) Determine, fix and/or prescribe charges and/or rates pertinent to the
operation of public water transport utilities, facilitate all services except in cases
where charges or rates are established by international bodies or association of
which the Philippine is a participating member or by bodies or association
recognized by the Philippine Government as the proper arbiter of such charges or
rates;
(i) Accredit marine surveyors and maritime enterprises engaged in shipbuilding,

ship repair, ship breaking, domestic and overseas shipping, ship management and
agency;
(j) Supervise the Philippine Merchant Marine Academy as recognized herein in

accordance with its charter, the provision hereof and applicable laws, rules and
regulation under the chairmanship of the maritime administrator;
(k) Issue and register the Continuous Discharge Book of Filipino Seamen;
(l) Establish and prescribe rules and regulation, standards and procedures for the
efficient and effective discharge of the above functions;
(m) Perform such other function as may now or hereafter be provided by the law.
Republic Act No. 9295
46
SEC. 9. Safety Standards. - All vessels operate by domestic ship operators shall at
all times be in seaworthy condition properly equipped with adequate life-saving,
communication, safety and other equipment operated and maintained in accordance
with the standards set by MARINA, and manned by duly licensed and competent
vessel crew.
The MARINA shall have the power to inspect vessels and all equipment on board to
ensure compliance with safety standards.
SEC. 10. Jurisdiction; Power; and Duties of MARINA. - The MARINA shall have
the power and authority to:
(1) Register vessels;
(2) Issue certificates of public convenience or any extensions or amendments

thereto, authorizing the operation of all kinds. Classes and types of vessels in
domestic shipping: Provided, That no such certificate shall be valid for a period
of more than twenty-five (25) years;
(3) Modify, suspend or revoke at any time upon notice and hearing, any
certificate, license or accreditation it may have issued to any domestic ship
operator;
(4) Establish and prescribe routes, zones or areas of operations of domestic

ship operators;
(5) Require any domestic ship operator to provide shipping services to any
coastal area, island or region in the country where such services are necessary
for the development of the area, to meet emergency sealift requirements, or
when public interest so requires;
(6) Set safety standards for vessels in accordance with applicable conventions
and regulations;
47
(7) Require all domestic ship operators to comply with operational and safety
standards for vessels set by applicable conventions and regulations, maintain
its vessels in safe and serviceable conditions, meet the standards of safety of
life at sea and safe manning requirements, and furnish safe, adequate, efficient,
reliable and proper service at all times;
(8) Inspect all vessels to ensure and enforce compliance with safety standards
and other regulations;
(9) Ensure that all domestic ship operators shall have the financial capacity to
provide and sustain safe, reliable, efficient and economic passenger or cargo
service, or both;
(10) Determine the impact which any new service shall have to the locality it will
serve;
(11) Adopt and enforce such rules and regulations which will ensure compliance
by every domestic ship operator with required safety standards and other rules
and regulations on vessel safety;
(12) Adopt such rules and regulations which ensure the reasonable stability of
passengers and freight rates and, if necessary, to intervene in order to protect
public interest;
(13) Hear and adjudicate any complaint made in writing involving any violation
of this law or the rules and regulations of the Authority;
(14) Impose such fines and penalties on, including the revocations of licenses
of any domestic ship operator who shall fail to maintain its vessels in safe and
serviceable condition, or who shall violate or fail to comply with safety
regulations;
48
(15) Investigate any complaint made in writing against any domestic ship
operator, or any shipper, or any group of shippers regarding any matter
involving violations of the provisions of this Act;
(16) Upon notice and hearing, impose such fines, suspend or revoke certificates
of public convenience or other license issued, or otherwise penalize any ship
operator, shipper or group of shippers found violating the provisions of this Act;
and
(17) Issue such rules and regulations necessary to implement the provisions of
this Act: Provided, That such rules and regulations cannot change or in any way
amend or be contrary to the intent and purposes of this Act.
CHAPTER IV
RATES
SEC. 11. Rates. - Every domestic ship operator shall have the right to fix its own
passenger pr cargo rates, or both.
Republic Act No. 10635
AN ACT ESTABLISHING THE MARITIME INDUSTRY AUTHORITY (MARINA) AS

THE SINGLE MARITIME ADMINISTRATION RESPONSIBLE FOR THE
IMPLEMENTATION AND ENFORCEMENT OF THE 1978 INTERNATIONAL
CONVENTION ON STANDARDS OF TRAINING, CERTIFICATION AND
WATCHKEEPING FOR SEAFARERS, AS AMENDED, AND INTERNATIONAL
AGREEMENTS OR COVENANTS RELATED THERETO
SEC. 4. Powers and Functions of the MARINA.—In addition to the mandate of the
MARINA under Presidential Decree No. 474, as amended, and in order to carry out
the provisions of this Act, the MARINA shall exercise the following powers and
functions:
49
(a) Act as the single and central maritime administration for all purposes relating to
compliance with the STCW Convention.
(b) Administer and ensure the effective implementation of the STCW Convention;
including all international conventions or agreements implementing or applying the
same, as well as international maritime safety conventions or agreements that it seeks
to promote compliance with.
(c) Assume all powers and functions of the Professional Regulation Commission
(PRC), the Commission on Higher Education (CHED), the Technical Education and
Skills Development Authority (TESDA), the Department of Health (DOH) and the
National Telecommunications Commission (NTC) relative to the issuance, validation,
verification, correction, revocation or cancellation of certificates of competency,
endorsement, proficiency and documentary evidence required of all seafarers and all
such other matters pertaining to the implementation of the STCW Convention, subject
to the following:
(1) The MARINA shall ensure that the examination, licensing and certification system
for marine deck and engine officers are in accordance with the requirements
prescribed under the STCW Convention. All powers, duties and functions of the PRC
on examination, licensing and certification system for marine deck and engine officers
as provided in Republic Act No. 8544, otherwise known as “The Philippine Merchant
Marine Officers Act of 1998”, shall henceforth be exercised by the MARINA. The
compensation and allowances of the Board of Marine Deck Officers and Marine
Engine Officers under Article TV, Section 8 of Republic Act No. 8544 shall, however,
be comparable to the compensation and allowances being received by the
chairpersons and members of other existing regulatory boards under the PRC and as
provided in the General Appropriations Act.
(2) The MARINA shall adopt rules and regulations, in accordance with the STCW
Convention, governing able-bodied deck and engine ratings including:
(i) Monitoring and verification of compliance with the standards of ratings;
50
(ii) Harmonization of the procedures for periodic evaluation, assessment and
monitoring activities undertaken by accredited institutions with registered programs for
ratings; and
(iii) Issuance of certificates of proficiency to ratings.
(3) The MARINA shall ensure that all legal and administrative measures relative to the
issuance of certificates of competency of GMDSS radio operators are in accordance
with the STCW Convention. For this purpose, the MARINA shall assess, revalidate
and issue GMDSS radio operator’s certificate in accordance with the provisions under
the STCW Convention.
(4) The MARINA shall ensure that all maritime education, including the curricula and
training programs, are structured and delivered in accordance with the written
programs, methods and media of delivery, procedures, and course materials
compliant with international standards as prescribed under the STCW Convention. For
this purpose, the MARINA shall:
(i) Chair the Technical Panel on Maritime Education (TPME) of the CHED; the TPME
shall among others, formulate, review and recommend to the CHED en banc all
policies, standards, and guidelines for maritime education, including curricula, facilities
and guidelines;
(ii) Monitor and verify, in coordination with the CHED, compliance with the policies,
standards, and guidelines of maritime education in the conduct of maritime education
and training programs;-
(iii) Review and harmonize the procedures for periodic evaluation, assessment and
monitoring of all maritime education and training institutions in accordance with the
standards of the CHED and other recognized international organizations;
(iv) Develop, formulate and recommend for implementation, strict quality assurance
mechanisms and relevant typology for maritime education programs and institutions;
51
(v) Recommend to the CHED en banc the closure/phase-out of substandard maritime
education institutions, in accordance with the rules and regulations, as well as
recommend alternative schemes or options for the affected maritime educational
institution;
(vi) Maintain an updated list of compliant and phased-out maritime education and
training programs, publish such lists in appropriate media, and provide the public with
a clear understanding of the consequences of enrolling in a phased-out program;
(5) The MARINA shall coordinate with the DOH to ensure that the medical standards
established to ascertain the medical fitness of seafarers are in accordance with the
international conventions/treaties and existing laws. For this purpose, the MARINA
shall:
(i) Ensure that the medical examinations and issuance of medical certificates by the
DOH accredited hospitals, medical clinics, and laboratories, including medical
practitioners are in accordance with the standards prescribed by the STCW
Convention; and
(ii) Ensure that medical certificates are issued by a duly-qualified medical practitioner
recognized by and accredited with the DOH, and for this purpose, a register of
recognized medical practitioners shall be maintained and made available to seafarers,
shipping companies and State parties to the STCW Convention,
Additional Readings
1978 International Conventional on Standards of Training, Certification and

Watchkeeping for Seaferers (With 2010 Manila Amendments)
III.Common Carrier
a. In General
52
I. Definitions, essential elements; Art 1732
II. Nature and Basis of Liability
Page 8
III. Classes of common carriers; Art 1732, 1733, 1755
Art. 1732. Common carriers are persons, corporations, firms or associations engaged
in the business of carrying or transporting passengers or goods or both, by land, water,
or air, for compensation, offering their services to the public.
Art. 1733. Common carriers, from the nature of their business and for reasons of public
policy, are bound to observe extraordinary diligence in the vigilance over the goods
and for the safety of the passengers transported by them, according to all the
circumstances of each case.
Art. 1755. A common carrier is bound to carry the passengers safely as far as human
care and foresight can provide, using the utmost diligence of very cautious persons,
with a due regard for all the circumstances.
IV. Law Applicable
Art. 1753. The law of the country to which the goods are to be transported shall govern
the liability of the common carrier for their loss, destruction or deterioration.
Art. 1766. In all matters not regulated by this Code, the rights and obligations of
common carriers shall be governed by the Code of Commerce and by special laws.
Additional Readings: (Attached File)
Convention for International Civil Aviation (“Chicago Convention”)

1978 International Convention on Standards of Training, Certification and
Watchkeeping for Seafarer (with 2010 Manila Amendments)
1974 International Convention for the Safety of Life and Sea (SOLAS)
1972 Convention on the International Regulations for Preventing Collisions at Sea
(COLREGs)
b. Common Carriage of Goods
53
I. Liability and Presumption of negligence; Art. 1733,
1734, 1735
Such extraordinary diligence in the vigilance over the goods is further expressed in
Articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the extraordinary diligence for
the safety of the passengers is further set forth in Articles 1755 and 1756.
SUBSECTION 2. - Vigilance Over Goods
Art. 1734. Common carriers are responsible for the loss, destruction, or deterioration
of the goods, unless the same is due to any of the following causes only:
(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;
(2) Act of the public enemy in war, whether international or civil;
(3) Act of omission of the shipper or owner of the goods;
(4) The character of the goods or defects in the packing or in the containers;
(5) Order or act of competent public authority.
Art. 1735. In all cases other than those mentioned in Nos. 1, 2, 3, 4, and 5 of the
preceding article, if the goods are lost, destroyed or deteriorated, common carriers are
presumed to have been at fault or to have acted negligently, unless they prove that
they observed extraordinary diligence as required in Article 1733.
II. Exemption from liability

1. Natural Disaster – Arts. 1734(1), 1739, 1740; Art. 361
Code of Commerce
54
(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;
Art. 1739. In order that the common carrier may be exempted from responsibility, the
natural disaster must have been the proximate and only cause of the loss. However,
the common carrier must exercise due diligence to prevent or minimize loss before,
during and after the occurrence of flood, storm or other natural disaster in order that
the common carrier may be exempted from liability for the loss, destruction, or
deterioration of the goods. The same duty is incumbent upon the common carrier in
case of an act of the public enemy referred to in Article 1734, No. 2.
Art. 1740. If the common carrier negligently incurs in delay in transporting the goods,
a natural disaster shall not free such carrier from responsibility.
ARTICLE 361. [The merchandise shall be transported at the risk and venture of
the shipper, if the contrary has not been expressly stipulated.
As a consequence, all the losses and deteriorations which the goods may suffer
during the transportation by reason of fortuitous event, force majeure, or the inherent
nature and defect of the goods, shall be for the account and risk of the shipper.
Page 9
2. Act of Public enemy- Art. 1734(2), 1739
(2) Act of the public enemy in war, whether international or civil;
Art. 1739. In order that the common carrier may be exempted from responsibility, the
natural disaster must have been the proximate and only cause of the loss. However,
the common carrier must exercise due diligence to prevent or minimize loss before,
during and after the occurrence of flood, storm or other natural disaster in order that
the common carrier may be exempted from liability for the loss, destruction, or
deterioration of the goods. The same duty is incumbent upon the common carrier in
case of an act of the public enemy referred to in Article 1734, No. 2.
55
3.Act of omission of shipper – Art. 1734(3), 1741
(3) Act of omission of the shipper or owner of the goods;
Art. 1741. If the shipper or owner merely contributed to the loss, destruction or
deterioration of the goods, the proximate cause thereof being the negligence of the
common carrier, the latter shall be liable in damages, which however, shall be
equitably reduced.
4.Character of Goods, etc
Arts. 1734(4), 1742

(4) The character of the goods or defects in the packing or in the containers;
Art. 1742. Even if the loss, destruction, or deterioration of the goods should be caused
by the character of the goods, or the faulty nature of the packing or of the containers,
the common carrier must exercise due diligence to forestall or lessen the loss.
5. Order of Extraordinary Responsibility

(5) Order or act of competent public authority.
Art. 1743. If through the order of public authority the goods are seized or destroyed,
the common carrier is not responsible, provided said public authority had power to
issue the order.
III. Duration of Extraordinary Responsibility – Arts. 1736

to 1738
Art. 1736. The extraordinary responsibility of the common carrier lasts from the time
the goods are unconditionally placed in the possession of, and received by the carrier
for transportation until the same are delivered, actually or constructively, by the carrier
56
to the consignee, or to the person who has a right to receive them, without prejudice
to the provisions of Article 1738.
Art. 1737. The common carrier's duty to observe extraordinary diligence over the
goods remains in full force and effect even when they are temporarily unloaded or
stored in transit, unless the shipper or owner has made use of the right of stoppage in
transitu.
Art. 1738. The extraordinary liability of the common carrier continues to be operative
even during the time the goods are stored in a warehouse of the carrier at the place
of destination, until the consignee has been advised of the arrival of the goods and
has had reasonable opportunity thereafter to remove them or otherwise dispose of
them.
IV. Agreement Limiting Liability

1. As to diligence required – Arts. 1744,1745, 1751
Art. 1744. A stipulation between the common carrier and the shipper or owner limiting
the liability of the former for the loss, destruction, or deterioration of the goods to a
degree less than extraordinary diligence shall be valid, provided it be:
(1) In writing, signed by the shipper or owner;
(2) Supported by a valuable consideration other than the service rendered by the
common carrier; and
(3) Reasonable, just and not contrary to public policy.
Art. 1745. Any of the following or similar stipulations shall be considered

unreasonable, unjust and contrary to public policy:
(1) That the goods are transported at the risk of the owner or shipper;
(2) That the common carrier will not be liable for any loss, destruction, or deterioration
of the goods;
(3) That the common carrier need not observe any diligence in the custody of the
goods;
(4) That the common carrier shall exercise a degree of diligence less than that of a
good father of a family, or of a man of ordinary prudence in the vigilance over the
movables transported;
(5) That the common carrier shall not be responsible for the acts or omission of his or
its employees;
57
(6) That the common carrier's liability for acts committed by thieves, or of robbers who
do not act with grave or irresistible threat, violence or force, is dispensed with or
diminished;
(7) That the common carrier is not responsible for the loss, destruction, or deterioration
of goods on account of the defective condition of the car, vehicle, ship, airplane or
other equipment used in the contract of carriage.
Art. 1751. The fact that the common carrier has no competitor along the line or route,
or a part thereof, to which the contract refers shall be taken into consideration on the
question of whether or not a stipulation limiting the common carrier's liability is
reasonable, just and in consonance with public policy.
2. As to amount of liability – Arts. 1749, 1750
Art. 1749. A stipulation that the common carrier's liability is limited to the value of the
goods appearing in the bill of lading, unless the shipper or owner declares a greater
value, is binding.
Art. 1750. A contract fixing the sum that may be recovered. by the owner or shipper
for the loss, destruction, or deterioration of the goods is valid, if it is reasonable and
just under the circumstances, and has been fairly and freely agreed upon.
3. As to delay in deliver
Page 10
4. Factors Affecting agreement – Arts. 1746-1748, 1751-1752
Art. 1746. An agreement limiting the common carrier's liability may be annulled by the
shipper or owner if the common carrier refused to carry the goods unless the former
agreed to such stipulation.
Art. 1747. If the common carrier, without just cause, delays the transportation of the
goods or changes the stipulated or usual route, the contract limiting the common
carrier's liability cannot be availed of in case of the loss, destruction, or deterioration
of the goods.
58
Art. 1748. An agreement limiting the common carrier's liability for delay on account of
strikes or riots is valid.
Art. 1751. The fact that the common carrier has no competitor along the line or route,
or a part thereof, to which the contract refers shall be taken into consideration on the
question of whether or not a stipulation limiting the common carrier's liability is
reasonable, just and in consonance with public policy.
Article 1752. Even when there is an agreement limiting the liability of the common
carrier in the vigilance over the goods, the common carrier is disputably presumed to
have been negligent in case of their loss, destruction or deterioration.
Article 1753. The law of the country to which the goods are to be transported shall
govern the liability of the common carrier for their loss, destruction or deterioration.
5. Applicable Law in Foreign Trade -Art. 1753

Art. 1753. The law of the country to which the goods are to be transported shall govern
the liability of the common carrier for their loss, destruction or deterioration.
6. Rules on Passenger Baggage – Arts. 1754, 1998, 2000-2003
Art. 1754. The provisions of Articles 1733 to 1753 shall apply to the passenger's
baggage which is not in his personal custody or in that of his employee. As to other
baggage, the rules in Articles 1998 and 2000 to 2003 concerning the responsibility of
hotel-keepers shall be applicable.
Art. 1998. The deposit of effects made by the travellers in hotels or inns shall also be
regarded as necessary. The keepers of hotels or inns shall be responsible for them as
depositaries, provided that notice was given to them, or to their employees, of the
effects brought by the guests and that, on the part of the latter, they take the
precautions which said hotel-keepers or their substitutes advised relative to the care
and vigilance of their effects. (1783)
Art. 2000. The responsibility referred to in the two preceding articles shall include the
loss of, or injury to the personal property of the guests caused by the servants or
employees of the keepers of hotels or inns as well as strangers; but not that which
may proceed from any force majeure. The fact that travellers are constrained to rely
on the vigilance of the keeper of the hotels or inns shall be considered in determining
the degree of care required of him. (1784a)
59
Art. 2001. The act of a thief or robber, who has entered the hotel is not deemed force
majeure, unless it is done with the use of arms or through an irresistible force. (n)
Art. 2002. The hotel-keeper is not liable for compensation if the loss is due to the acts
of the guest, his family, servants or visitors, or if the loss arises from the character of
the things brought into the hotel. (n)
Art. 2003. The hotel-keeper cannot free himself from responsibility by posting notices
to the effect that he is not liable for the articles brought by the guest. Any stipulation
between the hotel-keeper and the guest whereby the responsibility of the former as
set forth in articles 1998 to 2001 is suppressed or diminished shall be void. (n)
C. Common Carriage of Passengers
I. Nature and extent of responsibility – Arts. 1733, 1755
Such extraordinary diligence in the vigilance over the goods is further expressed in
Articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the extraordinary diligence for
the safety of the passengers is further set forth in Articles 1755 and 1756.
Art. 1755. A common carrier is bound to carry the passengers safely as far as human
care and foresight can provide, using the utmost diligence of very cautious persons,
with a due regard for all the circumstances.
II.Duration of Responsibility – 1736

Art. 1736. The extraordinary responsibility of the common carrier lasts from the time
the goods are unconditionally placed in the possession of, and received by the carrier
for transportation until the same are delivered, actually or constructively, by the carrier
to the consignee, or to the person who has a right to receive them, without prejudice
to the provisions of Article 1738.
III.Presumption of negligence – Art 1756
60
Art. 1756. In case of death of or injuries to passengers, common carriers are
presumed to have been at fault or to have acted negligently, unless they prove that
they observed extraordinary diligence as prescribed in Articles 1733 and 1755.
IV.Force Majeure
Page 11
V.Limitation of liability, validity of stipulations – Arts. 1757, 1758
Art. 1757. The responsibility of a common carrier for the safety of passengers as
required in Articles 1733 and 1755 cannot be dispensed with or lessened by
stipulation, by the posting of notices, by statements on tickets, or otherwise.
Art. 1758. When a passenger is carried gratuitously, a stipulation limiting the common
carrier's liability for negligence is valid, but not for wilful acts or gross negligence.
The reduction of fare does not justify any limitation of the common carrier's liability.
VI. Responsibility for acts of employees – Arts. 1759, 1760
Art. 1759. Common carriers are liable for the death of or injuries to passengers
through the negligence or wilful acts of the former's employees, although such
employees may have acted beyond the scope of their authority or in violation of the
orders of the common carriers.
This liability of the common carriers does not cease upon proof that they exercised all
the diligence of a good father of a family in the selection and supervision of their
employees.
Art. 1760. The common carrier's responsibility prescribed in the preceding article
cannot be eliminated or limited by stipulation, by the posting of notices, by statements
on the tickets or otherwise.
VII. Responsibility for acts of strangers and co-passengers – Arts.

1763
61
Art. 1763. A common carrier is responsible for injuries suffered by a passenger on
account of the wilful acts or negligence of other passengers or of strangers, if the
common carrier's employees through the exercise of the diligence of a good father of
a family could have prevented or stopped the act or omission.
VIII. Duty of Passenger; effect of contributory negligence – Arts.

1761, 1762
Art. 1761. The passenger must observe the diligence of a good father of a family to
avoid injury to himself.
Art. 1762. The contributory negligence of the passenger does not bar recovery of
damages for his death or injuries, if the proximate cause thereof is the negligence of
the common carrier, but the amount of damages shall be equitably reduced.
D. Damages Recoverable from Common Carriers
I. General
II. Actual Compensatory -Arts. 2199, 2201, 2203, 1764, 2206
Art. 2199. Except as provided by law or by stipulation, one is entitled to an adequate

compensation only for such pecuniary loss suffered by him as he has duly proved.
Such compensation is referred to as actual or compensatory damages.
Art. 2201. In contracts and quasi-contracts, the damages for which the obligor who
acted in good faith is liable shall be those that are the natural and probable
consequences of the breach of the obligation, and which the parties have foreseen or
could have reasonably foreseen at the time the obligation was constituted.
In case of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible
for all damages which may be reasonably attributed to the non-performance of the
obligation. (1107a)
Art. 2203. The party suffering loss or injury must exercise the diligence of a good
father of a family to minimize the damages resulting from the act or omission in
question.
Art. 1764. Damages in cases comprised in this Section shall be awarded in

accordance with Title XVIII of this Book, concerning Damages. Article 2206 shall also
apply to the death of a passenger caused by the breach of contract by a common
carrier.
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Art. 2206. The amount of damages for death caused by a crime or quasi-delict shall
be at least three thousand pesos, even though there may have been mitigating
circumstances. In addition:
(1) The defendant shall be liable for the loss of the earning capacity of the deceased,
and the indemnity shall be paid to the heirs of the latter; such indemnity shall in every
case be assessed and awarded by the court, unless the deceased on account of
permanent physical disability not caused by the defendant, had no earning capacity at
the time of his death;
(2) If the deceased was obliged to give support according to the provisions of Article
291, the recipient who is not an heir called to the decedent's inheritance by the law of
testate or intestate succession, may demand support from the person causing the
death, for a period not exceeding five years, the exact duration to be fixed by the court;
(3) The spouse, legitimate and illegitimate descendants and ascendants of the
deceased may demand moral damages for mental anguish by reason of the death of
the deceased
Page 12
III. Moral – Arts. 2216, 2217, 2219, 2220, 2206(3)
CHAPTER 3
OTHER KINDS OF DAMAGES
Art. 2216. No proof of pecuniary loss is necessary in order that moral, nominal,
temperate, liquidated or exemplary damages, may be adjudicated. The assessment
of such damages, except liquidated ones, is left to the discretion of the court, according
to the circumstances of each case.
SECTION 1. - Moral Damages
Art. 2217. Moral damages include physical suffering, mental anguish, fright, serious
anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation,
63
and similar injury. Though incapable of pecuniary computation, moral damages may
be recovered if they are the proximate result of the defendant's wrongful act for
omission.
Art. 2219. Moral damages may be recovered in the following and analogous cases.
(1) A criminal offense resulting in physical injuries;
(2) Quasi-delicts causing physical injuries;
(3) Seduction, abduction, rape, or other lascivious acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest;
(6) Illegal search;
(7) Libel, slander or any other form of defamation;
(8) Malicious prosecution;
(9) Acts mentioned in Article 309;
(10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35.
The parents of the female seduced, abducted, raped, or abused, referred to in No. 3
of this article, may also recover moral damages.
The spouse, descendants, ascendants, and brothers and sisters may bring the action
mentioned in No. 9 of this article, in the order named.
Art. 2220. Willful injury to property may be a legal ground for awarding moral damages
if the court should find that, under the circumstances, such damages are justly due.
The same rule applies to breaches of contract where the defendant acted fraudulently
or in bad faith.
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Art. 2206. The amount of damages for death caused by a crime or quasi-delict shall
be at least three thousand pesos, even though there may have been mitigating
circumstances. In addition:
(3) The spouse, legitimate and illegitimate descendants and ascendants of the
deceased may demand moral damages for mental anguish by reason of the
death of the deceased.
IV. Exemplary – Arts. 2229, 2232, 2233
Art. 2229. Exemplary or corrective damages are imposed, by way of example or

correction for the public good, in addition to the moral, temperate, liquidated or
compensatory damages.
Art. 2232. In contracts and quasi-contracts, the court may award exemplary damages
if the defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent
manner.
Art. 2233. Exemplary damages cannot be recovered as a matter of right; the court will
decide whether or not they should be adjudicated.
V. Nominal, Temperate, Liquidated – Arts. 2221, 2224, 2226
Art. 2221. Nominal damages are adjudicated in order that a right of the plaintiff, which
has been violated or invaded by the defendant, may be vindicated or recognized, and
not for the purpose of indemnifying the plaintiff for any loss suffered by him.
Art. 2224. Temperate or moderate damages, which are more than nominal but less
than compensatory damages, may be recovered when the court finds that some
pecuniary loss has been suffered but its amount can not, from the nature of the case,
be provided with certainty.
Art. 2226. Liquidated damages are those agreed upon by the parties to a contract, to
be paid in case of breach thereof.
VI. Attorney’s Fees and Interest -Arts. 2208, 2210
65
Art. 2208. In the absence of stipulation, attorney's fees and expenses of litigation,
other than judicial costs, cannot be recovered, except:
(1) When exemplary damages are awarded;
(2) When the defendant's act or omission has compelled the plaintiff to litigate with
third persons or to incur expenses to protect his interest;
(3) In criminal cases of malicious prosecution against the plaintiff;
(4) In case of a clearly unfounded civil action or proceeding against the plaintiff;
(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the
plaintiff's plainly valid, just and demandable claim;
(6) In actions for legal support;
(7) In actions for the recovery of wages of household helpers, laborers and skilled
workers;
(8) In actions for indemnity under workmen's compensation and employer's liability
laws;
(9) In a separate civil action to recover civil liability arising from a crime;
(10) When at least double judicial costs are awarded;
(11) In any other case where the court deems it just and equitable that attorney's fees
and expenses of litigation should be recovered.
In all cases, the attorney's fees and expenses of litigation must be reasonable.
Art. 2210. Interest may, in the discretion of the court, be allowed upon damages
awarded for breach of contract.
IV. Code of Commerce Provision on Overland Transportation
66
a. Scope of Overland Transportation
b. Nature of Contract – Art 349
ARTICLE 349. A contract of transportation by land or water ways of any kind shall
be considered commercial:
1. When it has for its object merchandise or any article of commerce.
2. When, whatever its object may be, the carrier is a merchant or is habitually
engaged in transportation for the public.
c. Effect of Civil Code – Arts. 1766, 2270
Art. 1766. In all matters not regulated by this Code, the rights and obligations of
common carriers shall be governed by the Code of Commerce and by special laws.
Art. 2270. The following laws and regulations are hereby repealed:
(1) Those parts and provisions of the Civil Code of 1889 which are in force on the date
when this new Civil Code becomes effective:
(2) The provisions of the Code of Commerce governing sales, partnership, agency,
loan, deposit and guaranty;
(3) The provisions of the Code of Civil Procedure on prescription as far as inconsistent
with this Code; and
(4) All laws, Acts, parts of Acts, rules of court, executive orders, and administrative
regulations which are inconsistent with this Code. (n)
d. Contract of Carriage
Page 13
I. Bill of Lading
1. Definition, Subject Matter; Art. 352
ARTICLE 352. The bills of lading, or tickets in cases of transportation of passengers,

may be diverse, some for persons and others for baggage; but all of them shall bear
67
the name of the carrier, the date of shipment, the points of departure and arrival, the
cost, and, with respect to the baggage, the number and weight of the packages, with
such other manifestations which may be considered necessary for their easy
identification.
2. Form, Contents; Arts. 350, 351
ARTICLE 350. The shipper as well as the carrier of merchandise or goods may
mutually demand that a bill of lading be made, stating:
1. The name, surname and residence of the shipper.
2. The name, surname and residence of the carrier.
3. The name, surname and residence of the person to whom or to whose order the
goods are to be sent or whether they are to be delivered to the bearer of said bill.
4. The description of the goods, with a statement of their kind, of their weight, and of
the external marks or signs of the packages in which they are contained.
5. The cost of transportation.
6. The date on which shipment is made.
7. The place of delivery to the carrier.
8. The place and the time at which delivery to the consignee shall be made.
9. The indemnity to be paid by the carrier in case of delay, if there should be any
agreement on this matter.
ARTICLE 351. In transportation made by railroads or other enterprises subject to

regulation rate and time schedules, it shall be sufficient for the bills of lading or the
declaration of shipment furnished by the shipper to refer, with respect to the cost, time
and special conditions of the carriage, to the schedules and regulations the application
of which he requests; and if the shipper does not determine the schedule, the carrier
must apply the rate of those which appear to be the lowest, with the conditions inherent
thereto, always including a statement or reference to in the bill of lading which he
delivers to the shipper.
1. Functions- Art. 353
ARTICLE 353. The legal evidence of the contract between the shipper and the carrier
shall be the bills of lading, by the contents of which the disputes which may arise
68
regarding their execution and performance shall be decided, no exceptions being
admissible other than those of falsity and material error in the drafting.
After the contract has been complied with, the bill of lading which the carrier has issued
shall be returned to him, and by virtue of the exchange of this title with the thing
transported, the respective obligations and actions shall be considered cancelled,
unless in the same act the claim which the parties may wish to reserve be reduced to
writing, with the exception of that provided for in Article 366.
In case the consignee, upon receiving the goods, cannot return the bill of lading
subscribed by the carrier, because of its loss or of any other cause, he must give the
latter a receipt for the goods delivered, this receipt producing the same effects as the
return of the bill of lading.
II. Refusal to transport – Art. 356
ARTICLE 356. Carriers may refuse packages which appear unfit for transportation;
and if the carriage is to be made by railway, and the shipment is insisted upon, the
company shall transport them, being exempt from all responsibility if its objections, is
made to appear in the bill of lading.
III. Doubtful declaration of contents – Art. 357
ARTICLE 357. If by reason of well-founded suspicion of falsity in the declaration as

to the contents of a package the carrier should decide to examine it, he shall proceed
with his investigation in the presence of witnesses, with the shipper or consignee in
attendance.
If the shipper or consignee who has to be cited does not attend, the examination shall
be made before a notary, who shall prepare a memorandum of the result of the
investigation, for such purposes as may be proper.
If the declaration of the shipper should be true, the expense occasioned by the
examination and that of carefully repacking the packages shall be for the account of
the carrier and in a contrary case for the account of the shipper.
IV. No Bill of Lading – Arts. 354 , 351
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ARTICLE 351. In transportation made by railroads or other enterprises subject to
regulation rate and time schedules, it shall be sufficient for the bills of lading or the
declaration of shipment furnished by the shipper to refer, with respect to the cost, time
and special conditions of the carriage, to the schedules and regulations the application
of which he requests; and if the shipper does not determine the schedule, the carrier
must apply the rate of those which appear to be the lowest, with the conditions inherent
thereto, always including a statement or reference to in the bill of lading which he
delivers to the shipper
ARTICLE 354. In the absence of a bill of lading, disputes shall be determined by the
legal proofs which the parties may present in support of their respective claims,
according to the general provisions established in this Code for commercial contracts.
e. Responsibility of the Carrier

I. When it commences- Art. 355
ARTICLE 355. The responsibility of the carrier shall commence from the moment he
receives the merchandise, personally or through a person charged for the purpose, at
the place indicated for receiving them.
II. Route – Art. 359
ARTICLE 359. If there is an agreement between the shipper and the carrier as to
the road over which the conveyance is to be made, the carrier may not change the
route, unless it be by reason of force majeure; and should he do so without this cause,
he shall be liable for all the losses which the goods he transports may suffer from any
other cause, beside paying the sum which may have been stipulated for such case.
When on account of said cause of force majeure, the carrier had to take another route
which produced an increase in transportation charges, he shall be reimbursed for such
increase upon formal proof thereof.
III. Care of Goods – Arts. 361, 362 , CC Arts. 1734, 1735
ARTICLE 361. [The merchandise shall be transported at the risk and venture of the
shipper, if the contrary has not been expressly stipulated.
70
As a consequence, all the losses and deteriorations which the goods may suffer during
the transportation by reason of fortuitous event, force majeure, or the inherent nature
and defect of the goods, shall be for the account and risk of the shipper. cdta
Proof of these accidents is incumbent upon the carrier.]
ARTICLE 362. Nevertheless, the carrier shall be liable for the losses and damages
resulting from the causes mentioned in the preceding article if it is proved, as against
him, that they arose through his negligence or by reason of his having failed to take
the precautions which usage has established among careful persons, unless the
shipper has committed fraud in the bill of lading, representing the goods to be of a kind
or quality different from what they really were.
If, notwithstanding the precautions referred to in this article, the goods transported run
the risk of being lost, on account of their nature or by reason of unavoidable accident,
there being no time for their owners to dispose of them, the carrier may proceed to sell
them, placing them for this purpose at the disposal of the judicial authority or of the
officials designated by special provisions.
IV. Delivery
1. Conditions of Goods – Arts. 363, 367
ARTICLE 363. Outside of the cases mentioned in the second paragraph of Article
361, the carrier shall be obliged to deliver the goods shipped in the same condition in
which, according to the bill of lading, they were found at the time they were received,
without any damage or impairment, and failing to do so, to pay the value which those
not delivered may have at the point and at the time at which their delivery should have
been made.
If those not delivered form part of the goods transported, the consignee may refuse to
receive the latter, when he proves that he cannot make use of them independently of
the others.
ARTICLE 367. If doubts and disputes should arise between the consignee and the
carrier with respect to the condition of the goods transported at the time their delivery
to the former is made, the goods shall be examined by experts appointed by the
parties, and, in case of disagreement, by a third one appointed by the judicial authority,
the results to be reduced to writing; and if the interested parties should not agree with
the expert opinion and they do not settle their differences, the merchandise shall be
71
deposited in a safe warehouse by order of the judicial authority, and they shall exercise
their rights in the manner that may be proper.
Page 14
2. To Whom Delivery Made – Art. 368
ARTICLE 368. The carrier must deliver to the consignee, without any delay or
obstruction, the goods which he may have received, by the mere fact of being named
in the bill of lading to receive them; and if he does not do so, he shall be liable for the
damages which may be caused thereby
3. When to be made – Arts. 370, 358
ARTICLE 370. If a period has been fixed for the delivery of the goods, it must be
made within such time, and, for failure to do so, the carrier shall pay the indemnity
stipulated in the bill of lading, neither the shipper nor the consignee being entitled to
anything else.
If no indemnity has been stipulated and the delay exceeds the time fixed in the bill of
lading, the carrier shall be liable for the damages which the delay may have caused.
ARTICLE 358. If there is no period fixed for the delivery of the goods the carrier shall
be bound to forward them in the first shipment of the same or similar goods which he
may make point where he must deliver them; and should he not do so, the damages
caused by the delay should be for his account.
f. Rights and Obligations or Shipper and/or Consignee

I. Right of damages
1. Conditions imposed on right – Arts. 366, 357
ARTICLE 366. Within the twenty-four hours following the receipt of the merchandise,
the claim against the carrier for damage or average be found therein upon opening the
packages, may be made, provided that the indications of the damage or average which
gives rise to the claim cannot be ascertained from the outside part of such packages,
in which case the claim shall be admitted only at the time of receipt.
After the periods mentioned have elapsed, or the transportation charges have been
paid, no claim shall be admitted against the carrier with regard to the condition in which
the goods transported were delivered.
72
ARTICLE 357. If by reason of well-founded suspicion of falsity in the declaration as
to the contents of a package the carrier should decide to examine it, he shall proceed
with his investigation in the presence of witnesses, with the shipper or consignee in
attendance.
If the shipper or consignee who has to be cited does not attend, the examination shall
be made before a notary, who shall prepare a memorandum of the result of the
investigation, for such purposes as may be proper.
If the declaration of the shipper should be true, the expense occasioned by the
examination and that of carefully repacking the packages shall be for the account of
the carrier and in a contrary case for the account of the shipper.
2. Amount of damages for loss – Art. 372, Art. 1744 CC
ARTICLE 372. The value of the goods which the carrier must pay in cases if loss or
misplacement shall be determined in accordance with that declared in the bill of lading,
the shipper not being allowed to present proof that among the goods declared therein
there were articles of greater value and money.
Horses, vehicles, vessels, equipment and all other principal and accessory means of
transportation shall be especially bound in favor of the shipper, although with respect
to railroads said liability shall be subordinated to the provisions of the laws of
concession with respect to the property, and to what this Code established as to the
manner and form of effecting seizures and attachments against said companies.
Art. 1744. A stipulation between the common carrier and the shipper or owner limiting
the liability of the former for the loss, destruction, or deterioration of the goods to a
degree less than extraordinary diligence shall be valid, provided it be:
(1) In writing, signed by the shipper or owner;
(2) Supported by a valuable consideration other than the service rendered by the
common carrier; and
(3) Reasonable, just and not contrary to public policy
3. Amount of damages for delay – Art. 371(3)
73
ARTICLE 371. In case of delay through the fault of the carrier, referred to in the
preceding articles, the consignee may leave the goods transported in the hands of the
former, advising him thereof in writing before their arrival at the point of destination.
When this abandonment takes place, the carrier shall pay the full value of the goods
as if they had been lost or mislaid.
If the abandonment is not made, the indemnification for losses and damages by
reason of the delay cannot exceed the current price which the goods transported
would have had on the day and at the place in which they should have been delivered;
this same rule is to be observed in all other cases in which this indemnity may be due.
II. Right to abandon – Art. 371, 370, 365, 363
ARTICLE 371. In case of delay through the fault of the carrier, referred to in the
preceding articles, the consignee may leave the goods transported in the hands of the
former, advising him thereof in writing before their arrival at the point of destination.
When this abandonment takes place, the carrier shall pay the full value of the goods
as if they had been lost or mislaid.
If the abandonment is not made, the indemnification for losses and damages by
reason of the delay cannot exceed the current price which the goods transported
would have had on the day and at the place in which they should have been delivered;
this same rule is to be observed in all other cases in which this indemnity may be due.
ARTICLE 370. If a period has been fixed for the delivery of the goods, it must be
made within such time, and, for failure to do so, the carrier shall pay the indemnity
stipulated in the bill of lading, neither the shipper nor the consignee being entitled to
anything else.
If no indemnity has been stipulated and the delay exceeds the time fixed in the bill of
lading, the carrier shall be liable for the damages which the delay may have caused.
ARTICLE 365. If, in consequence of the damage, the goods are rendered useless
for sale and consumption for the purposes for which they are properly destined, the
consignee shall not be bound to receive them, and he may have them in the hands of
the carrier, demanding of the latter their value at the current price on that day.
If among the damaged goods there should be some pieces in good condition and
without any defect, the foregoing provision shall be applicable with respect to those
damaged and the consignee shall receive those which are sound, this segregation to
be made by distinct and separate pieces and without dividing a single object, unless
the consignee proves the impossibility of conveniently making use of them in this form.
74
The same rule shall be applied to merchandise in bales or packages, separating those
parcels which appear sound.
ARTICLE 363. Outside of the cases mentioned in the second paragraph of Article
361, the carrier shall be obliged to deliver the goods shipped in the same condition in
which, according to the bill of lading, they were found at the time they were received,
without any damage or impairment, and failing to do so, to pay the value which those
not delivered may have at the point and at the time at which their delivery should have
been made.
If those not delivered form part of the goods transported, the consignee may refuse to
receive the latter, when he proves that he cannot make use of them independently of
the others.
III. Right to change consignment – Art. 360
ARTICLE 360. The shipper, without changing the place where the delivery is to be
made, may change the consignment of the goods which he delivered to the carrier,
provided that at the time of ordering the change of consignee the bill of lading signed
by the carrier, if one has been issued, be returned to him, in exchange for another
wherein the novation of the contract appears.
The expenses which this change of consignment occasions shall be for the account
of the shipper.
IV. Obligation to pay transportation charges – Arts. 374, 375, 376 , Art.
2241(9) CC
ARTICLE 374. The consignees to whom the shipment was made may not defer the
payment of the expenses and transportation charges of the goods they receive after
the lapse of twenty-four hours following their delivery; and in case of delay in this
payment, the carrier may demand the judicial sale of the goods transported in an
amount necessary to cover the cost of transportation and the expenses incurred.
ARTICLE 375. The goods transported shall be especially bound to answer for the
cost of transportation and for the expenses and fees incurred for them during their
conveyance and until the moment of their delivery.
This special right shall prescribe eight days after the delivery has been made, and
once prescribed, the carrier shall have no other action than that corresponding to him
as an ordinary creditor.
ARTICLE 376. The preference of the carrier to the payment of what is owed him for
the transportation and expenses of the goods delivered to the consignee shall not be
75
cut off by the bankruptcy of the latter, provided it is claimed within the eight days
mentioned in the preceding article.
Art. 2241. With reference to specific movable property of the debtor, the following
claims or liens shall be preferred:
(9) Credits for transportation, upon the goods carried, for the price of the contract and
incidental expenses, until their delivery and for thirty days thereafter;
V. Obligations to return bill of lading – Art. 353(2)
ARTICLE 353. The legal evidence of the contract between the shipper and the carrier
shall be the bills of lading, by the contents of which the disputes which may arise
regarding their execution and performance shall be decided, no exceptions being
admissible other than those of falsity and material error in the drafting.
After the contract has been complied with, the bill of lading which the carrier has issued
shall be returned to him, and by virtue of the exchange of this title with the thing
transported, the respective obligations and actions shall be considered cancelled,
unless in the same act the claim which the parties may wish to reserve be reduced to
writing, with the exception of that provided for in Article 366.
In case the consignee, upon receiving the goods, cannot return the bill of lading
subscribed by the carrier, because of its loss or of any other cause, he must give the
latter a receipt for the goods delivered, this receipt producing the same effects as the
return of the bill of lading.
g. Applicability of Provisions Art. 379
ARTICLE 379. The provisions contained in Articles 349 and following shall be
understood as equally applicable to those who, although they do not personally effect
the transportation of the merchandise, contract to do so through others, either as
contractors for a particular and definite operation, or as agents for transportations and
conveyances.
In either case they shall be subrogated in the place of the carriers themselves, with
respect to the obligations and responsibility of the latter, as well as with regard to their
rights.
V. Admirally and Maritime Commerce
Page 15
A. Concept of Admiralty; Jurisdiction over Admiralty Cases
76
BATAS PAMBANSA Blg. 129
Section 19. Jurisdiction in civil cases. – Regional Trial Courts shall exercise
exclusive original jurisdiction:
(3) In all actions in admiralty and maritime jurisdiction where he demand or
claim exceeds One hundred thousand pesos (P100,000.00) or , in Metro Manila,
where such demand or claim exceeds Two hundred thousand pesos (200,000.00)
Section 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and
Municipal Circuit Trial Courts in civil cases. – Metropolitan Trial Courts, Municipal Trial
Courts, and Municipal Circuit Trial Courts shall exercise:
(1) Exclusive original jurisdiction over civil actions and probate

proceedings, testate and intestate, including the grant of provisional
remedies in proper cases, where the value of the personal property,
estate, or amount of the demand does not exceed One hundred
thousand pesos (P100,000.00) or, in Metro Manila where such
personal property, estate, or amount of the demand does not exceed
Two hundred thousand pesos (P200,000.00) exclusive of interest
damages of whatever kind, attorney's fees, litigation expenses, and
costs, the amount of which must be specifically alleged: Provided,
That where there are several claims or causes of action between the
same or different parties, embodied in the same complaint, the
amount of the demand shall be the totality of the claims in all the
causes of action, irrespective of whether the causes of action arose
out of the same or different transactions;
B. Vessels
I. Meaning
II. Nature and Acquisition of- Art. 712 CC.
Art. 712. Ownership is acquired by occupation and by intellectual creation.
Ownership and other real rights over property are acquired and transmitted by law, by
donation, by estate and intestate succession, and in consequence of certain contracts,
by tradition.
77
They may also be acquired by means of prescription.
III. Registrations,certificate issued,registrations
[Republic Act No. 9295]

AN ACT PROMOTING THE DEVELOPMENT OF PHILIPPINE DOMESTIC
SHIPPING, SHIPBUILDING, SHIP REPAIR AND SHIP BREAKING,
ORDAINING REFORMS IN GOVERNMENT POLICIES TOWARDS SHIPPING
IN THE PHILIPPINES AND FOR OTHER PURPOSES.
SEC. 10. Jurisdiction; Power; and Duties of MARINA. - The MARINA shall have
the power and authority to:
(1) Register vessels;
IV. Significance of registration of transactions affecting vessels

C. Persons Participating in Maritime Commerce
I. Shipowners and shipagents – Arts. 586-608, 618
TITLE TWO
PERSONS WHO TAKE PART IN MARITIME
COMMERCE
SECTION ONE
SHIPOWNERS AND SHIP AGENTS
ARTICLE 586. The shipowner and the ship agent shall be civilly liable for the acts of
the captain and for the obligations contracted by the latter to repair, equip, and
provision the vessel, provided the creditor proves that the amount claimed was
invested for the benefit of the same.
By ship agent is understood the person entrusted with provisioning or representing the
vessel in the port in which it may be found.
78
ARTICLE 587. The ship agent shall also be civilly liable for the indemnities in favor of
third persons which may arise from the conduct of the captain in the care of the goods
which he loaded on the vessel; but he may exempt himself therefrom by abandoning
the vessel with all her equipments and the freight it may have earned during the
voyage.
ARTICLE 588. Neither the shipowner nor the ship agent shall be liable for the
obligations contracted by the captain, if the latter exceeds the powers and privileges
pertaining to him by reason of his position or conferred upon him by the former.
Nevertheless, if the amounts claimed were invested for the benefit of the vessel, the
responsibility therefor shall devolve upon its owner or agent.
ARTICLE 589. If two or more persons should be part owners of a merchant vessel, a
partnership shall be presumed as established by the co-owners.
This partnership shall be governed by the resolutions of the majority of the members.
If the part owners should not be more than two, the disagreement of views, if any, shall
be decided by the vote of the member having the largest interest. If the interests
are equal, it should be decided by lot.
The person having the smallest share in the ownership shall have one vote; and
proportionately the other part owners as many votes as they have parts equal to the
smallest one.
A vessel may not be detained, attached or levied upon in execution in its entirety, for
the private debts of a part owner, but the proceedings shall be limited to the interest
which the debtor may have in the vessel, without interfering with the navigation.
ARTICLE 590 The owners of a vessel shall be civilly liable in the proportion of their
contribution to the common fund, for the results of the acts of the captain, referred to
in Article 587.
79
Each part owner may exempt himself from this liability by the abandonment before a
notary of the part of the vessel belonging to him.
ARTICLE 591 All the part owners shall be liable, in proportion to their respective
ownership, for the expenses of repairs to the vessel, and for other expenses which are
incurred by virtue of a resolution of the majority. They shall likewise be liable in the
same proportion for the expenses of maintenance, equipment, and provisioning of the
vessel, necessary for navigation.
ARTICLE 592 The resolutions of the majority with regard to the repair, equipment,
and provisioning of the vessel in the port of departure shall bind the majority unless
the partners in the minority renounce their participation therein, which must be
acquired by the other part owners after a judicial appraisement of the value of the
portion or portions assigned.
The resolutions of the majority relating to the dissolution of the association and sale of
the vessel shall also be binding on the minority. The sale of the vessel must take place
at a public auction, subject to the provisions of the law of civil procedure unless the
part owners unanimously agree otherwise, the right of option to purchase and to
withdraw mentioned in Article 575 being always reserved in favor of said part owners.
ARTICLE 593 The owners of a vessel shall have preference in her charter to other
persons, offering equal conditions and price. If two or more of the former should claim
said right the one having greater interest shall be preferred, and should they have an
equal interest it shall be decided by lot.
ARTICLE 594 The part owners shall elect the manager who is to represent them in
the capacity of agent. The appointment of director or agent shall be revocable at the
will of the members.
ARTICLE 595 The agent, be he at the same time an owner of a vessel or a manager
for an owner or for an association of co-owners, must be qualified to trade and must
be recorded in the merchant's registry of the province. The agent shall represent the
ownership of the vessel, and may in his own name and in such capacity take judicial
and extrajudicial steps in all that relates to commerce.
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ARTICLE 596 The agent may discharge the duties of captain of the vessel, subject,
in every case, to the provisions contained in Article 609. If two or more co-owners
request the position of captain, the disagreement shall be decided by a vote of the
members; and if the vote should result in a tie, the position shall be given to the part
owner having the larger interest in the vessel. If the interest of the petitioners should
be the same, and there should be a tie, the matter shall be decided by lot.
ARTICLE 597 The agent shall select and come to an agreement with the captain, and
shall contract in the name of the owners, who shall be bound in all that refers to repairs,
details of equipment, armament, provisions, fuel, and freight of the vessel, and, in
general, in all that relates to the requirements of navigation.
ARTICLE 598 The agent can not order a new voyage, nor make contracts for a new
charter, nor insure the vessel, without the authority of her owner or by virtue of a
resolution of the majority of the co-owners, unless these privileges were granted him
in the certificate of his appointment. If he should insure the vessel without authority
therefor he shall be secondarily liable for the solvency of the underwriter.
ARTICLE 599 The managing agent of an association, shall give his co-owners an
account of the results of each voyage of the vessel, without prejudice to always having
the books and correspondence relating to the vessel and to its voyages at the disposal
of the same.
ARTICLE 600 After the account of the managing agent has been approved by a
relative majority, the co-owners shall satisfy the expenses in proportion to their
interest, without prejudice to the civil or criminal actions which the minority may deem
fit to institute afterwards. In order to enforce the payment, the managing agent shall
have a right of action to secure execution, which shall be instituted by virtue of a
resolution of the majority, and without further proceedings than the acknowledgment
of the signatures of the persons who voted the resolution.
ARTICLE 601 Should there be any profits, the co-owners may demand of the
managing agent the amount due them, by means of an executory action without further
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requisites than the acknowledgment of the signatures of the instrument approving the
account.
ARTICLE 602 The agent shall indemnify the captain for all the expenses he may have
incurred from his own funds or from those of other persons, for the benefit of the
vessel.
ARTICLE 603 Before a vessel goes out to sea the agent shall have at his discretion,
a right to discharge the captain and members of the crew whose contract did not state
a definite period nor a definite voyage, paying them the salaries earned according to
their contracts, and without any indemnity whatsoever, unless there is a special and
specific agreement in respect thereto.
ARTICLE 604 If the captain or any other member of the crew should be discharged
during the voyage, they shall receive their salary until the return to the place where the
contract was made, unless there are good reasons for the discharge, all in accordance
with Articles 636 et seq. of this Code. ARTICLE 605 If the contracts of the captain and
members of the crew with the agent should be for a definite period or voyage, they
can not be discharged until the fulfillment of their contracts, except for reasons of
insubordination in serious matters, robbery, theft, habitual drunkenness, and damage
caused to the vessel or to its cargo by malice or manifest or proven negligence.
ARTICLE 606 If the captain should be a part owner in the vessel, he can not be
discharged without the agent returning him the amount of his interest therein, which,
in the absence of an agreement between the parties, shall be appraised by experts
appointed in the manner established in the law of civil procedure.
ARTICLE 607 If the captain who is a part owner should have obtained the command
of the vessel by virtue of a special agreement contained in the articles of copartnership,
he can not be deprived thereof except for the reasons mentioned in Article 605.
ARTICLE 608 In case of the voluntary sale of the vessel, all contracts between the
agent and captain shall terminate, the right to proper indemnity being reserved in favor
of the captain, according to the agreements made with the agent. They vessel sold
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shall remain subject to the security of the payment of said indemnity if, after the action
against the vendor has been instituted, the latter should be insolvent.
ARTICLE 618 The captain shall be civilly liable to the agent, and the latter to the third
persons who may have made contracts with the former —
1. For all the damages suffered by the vessel and his cargo by reason of want of skill
or negligence on his part. If a misdemeanor or crime has been committed he shall be
liable in accordance with the Penal Code. cda
2. For all the thefts committed by the crew, reserving his right of action against the
guilty parties.
3. For the losses, fines, and confiscations imposed an account of violation of the laws
and regulations of customs, police, health, and navigation.
4. For the losses and damages caused by mutinies on board the vessel, or by reason
of faults committed by the crew in the service and defense of the same, if he does not
prove that he made full use of his authority to prevent or avoid them.
5. For those arising by reason of an undue use of powers and non-fulfillment of the
obligations which are his in accordance with Articles 610 and 612.
6. For those arising by reason of his going out of his course or taking a course which
he should not have taken without sufficient cause, in the opinion of the officers of the
vessel, at a meeting with the shippers or supercargoes who may be on board. No
exception whatsoever shall exempt him from this obligation.
7. For those arising by reason of his voluntarily entering a port other than his
destination, with the exception of the cases or without the formalities referred to in
Article 612.
8. For those arising by reason of the non-observance of the provisions contained in

the regulations for lights and evolutions for the purpose of preventing collisions.
1. Responsibilities and liabilities

2. The doctrine of limited liability – Arts. 587
83
ARTICLE 587. The ship agent shall also be civilly liable for the indemnities in favor of
third persons which may arise from the conduct of the captain in the care of the goods
which he loaded on the vessel; but he may exempt himself therefrom by abandoning
the vessel with all her equipments and the freight it may have earned during the
voyage.
Page 16
3. Specific rights and prerogative – Arts. 575, 593, 594, 596, 601
ARTICLE 575. Co-owners of vessels shall have the right of repurchase and
redemption in sales made to strangers, but they may exercise the same only within
the nine days following the inscription of the sale in the registry, and by depositing the
price at the same time.
ARTICLE 593. The owners of a vessel shall have preference in her charter over other
persons, under the same conditions and price. If two or more of them should claim this
right, the one having the greater interest shall be preferred; and should they have
equal interests, the matter shall be decided by lot.
Art 596. The ship agent may discharge the duties of captain of the vessel, subject
inevery case to the provision of Art 609If two or more co-owners apply for the provision
of captain, the disagreementshall be decided by a vote of the members; and if the vote
should result in a tie, itshall be decided i favour of the co-owner having the larger
interest in the vessel.If the interests of the applicants should be equal, ad there should
be a tie, thematter shall be decided by lot.
II. Captains and Master

1. Qualifications and licensing
[Republic Act No. 9295]
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SEC. 9. Safety Standards. - All vessels operate by domestic ship
operators shall at all times be in seaworthy condition properly equipped with
adequate life-saving, communication, safety and other equipment operated
and maintained in accordance with the standards set by MARINA, and
manned by duly licensed and competent vessel crew.
The MARINA shall have the power to inspect vessels and all equipment
on board to ensure compliance with safety standards.
-
[REPUBLIC ACT NO. 10635]

AN ACT ESTABLISHING THE MARITIME INDUSTRY AUTHORITY (MARINA) AS
THE SINGLE MARITIME ADMINISTRATION RESPONSIBLE FOR THE
IMPLEMENTATION AND ENFORCEMENT OF THE 1978 INTERNATIONAL
CONVENTION ON STANDARDS OF TRAINING, CERTIFICATION AND
WATCHKEEPING FOR SEAFARERS, AS AMENDED, AND INTERNATIONAL
AGREEMENTS OR COVENANTS RELATED THERETO
SEC. 3. MARINA as the Single Maritime Administration.—The MARINA,
created under Presidential Decree. No. 474, as amended, shall be the single maritime
administration mandated to implement and enforce the 1978 International Convention
on Standards of Training, Certification and Watchkeeping for Seafarers. It shall carry
out an effective regulatory framework conducive to the efficiency, transparency and
competitiveness of the Philippine seafaring industry.
(4) The MARINA shall ensure that all maritime education, including the curricula
and training programs, are structured and delivered in accordance with the
written programs, methods and media of delivery, procedures, and course
materials compliant with international standards as prescribed under the STCW
Convention. For this purpose, the MARINA shall:
(i) Chair the Technical Panel on Maritime Education (TPME) of the CHED; the
TPME shall among others, formulate, review and recommend to the CHED en
banc all policies, standards, and guidelines for maritime education, including
curricula, facilities and guidelines;
85
(ii) Monitor and verify, in coordination with the CHED, compliance with the
policies, standards, and guidelines of maritime education in the conduct of
maritime education and training programs;-
(iii) Review and harmonize the procedures for periodic evaluation, assessment
and monitoring of all maritime education and training institutions in accordance
with the standards of the CHED and other recognized international
organizations;
(iv) Develop, formulate and recommend for implementation, strict quality

assurance mechanisms and relevant typology for maritime education programs
and institutions;
(v) Recommend to the CHED en banc the closure/phase-out of substandard
maritime education institutions, in accordance with the rules and regulations,
as well as recommend alternative schemes or options for the affected maritime
educational institution;
(vi) Maintain an updated list of compliant and phased-out maritime education
and training programs, publish such lists in appropriate media, and provide the
public with a clear understanding of the consequences of enrolling in a phased-
out program;
The STCW Convention Code 2010 Manila Amendments,ANNEX and Chapter II

The Manila amendments to the STCW Convention and Code were adopted on 25
June 2010, marking a major revision of the STCW Convention and Code. The 2010
amendments are set to enter into force on 1 January 2012 under the tacit acceptance
procedure and are aimed at bringing the Convention and Code up to date with
developments since they were initially adopted and to enable them to address issues
that are anticipated to emerge in the foreseeable future.
Amongst the amendments adopted, there are a number of important changes to each
chapter of the Convention and Code, including:
86
Improved measures to prevent fraudulent practices associated with certificates
of competency and strengthen the evaluation process (monitoring of Parties'
compliance with the Convention);
Revised requirements on hours of work and rest and new requirements for the
prevention of drug and alcohol abuse, as well as updated standards relating to
medical fitness standards for seafarers;
New certification requirements for able seafarers;
New requirements relating to training in modern technology such as electronic
charts and information systems (ECDIS);
New requirements for marine environment awareness training and training in
leadership and teamwork;
New training and certification requirements for electro-technical officers;
Updating of competence requirements for personnel serving on board all types
of tankers, including new requirements for personnel serving on liquefied gas
tankers;
New requirements for security training, as well as provisions to ensure that
seafarers are properly trained to cope if their ship comes under attack by
pirates;
Introduction of modern training methodology including distance learning and
web-based learning;
New training guidance for personnel serving on board ships operating in polar
waters; and
New training guidance for personnel operating Dynamic Positioning Systems
CHAPTER II
Standards regarding the master and deck department
Section A-II/1
Mandatory minimum requirements for certification of officers in charge of a
navigational watch on ships of 500 gross tonnage or more.
Standard of competence
1. Every candidate for certification shall:
87
1. be required to demonstrate the competence to undertake, at the operational
level,the tasks, duties and responsibilities listed in column 1 of table A-II/1;
2. at least hold the appropriate certificate for performing VHF radio
communications in accordance with the requirements of the Radio Regulations;
and
3. if designated to have primary responsibility for radio communications during
distress incidents, hold the appropriate certificate issued or recognized under
the provisions of the Radio Regulations.
2. The minimum knowledge, understanding and proficiency required for certification is
listed in column 2 of table A-II/1.
3. The level of knowledge of the subjects listed in column 2 of table A-II/1 shall be
sufficient for officers of the watch to carry out their watchkeeping duties.*
4. Training and experience to achieve the necessary level of theoretical knowledge,
understanding and proficiency shall be based on section A-VIII/2, part 4-1 Principles
to beobserved in keeping a navigational watch – and shall also take into account the
relevant requirements of this part and the guidance given in part B of this Code.
5. Every candidate for certification shall be required to provide evidence of having
achieved the required standard of competence in accordance with the methods for
demonstrating competence and the criteria for evaluating competence tabulated in
columns 3 and 4 of table A-II/1.
On-board training
6. Every candidate for certification as officer in charge of a navigational watch of ships
of 500 gross tonnages or more whose seagoing service, in accordance with paragraph
2.2 of regulation II/1, forms part of a training programme approved as meeting the
requirements of this section shall follow an approved programme of on-board training
which:
.1 ensures that, during the required period of seagoing service, the candidate
receives systematic practical training and experience in the tasks, duties and
responsibilities of an officer in charge of a navigational watch, taking into
account the guidance given in section B-II/1 of this Code;
.2 is closely supervised and monitored by qualified officers aboard the ships in
which the approved seagoing service is performed; and
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.3 is adequately documented in a training record book or similar document.*
Near-coastal voyages
7. The following subjects may be omitted from those listed in column 2 of table A-II/1
for issue of restricted certificates for service on near-coastal voyages, bearing in mind
the safety of all ships which may be operating in the same waters:
.1 celestial navigation; and
.2 those electronic systems of position fixing and navigation that do not cover
the waters for which the certificate is to be valid.
Additional Readings
Marina Certificate 2012-04
Marina Certificate 2012-06
STCW Code Part A, Chapter II, Sec A-II and sec A-VI
2. Powers and Duties – Arts. 610-612, 622, 624, 625
Art 610. The ff powers shall be inherent in the position of captain, master or patrol of
a vessel:
1.To appoint of make contracts with the crew in the absence of the ship agent, and to
propose said crew, should said agent be present; but ship agent may not employ any
member against the captain’s express refusal.
2.To command the crew and direct the vessel to the port of its destination,
inaccordance with the instructions he may have received from the ship agent.
3.To impose, in accordance with the contracts and with the laws and regulations of the
merchant marine, and when on board the vessel, correctional punishment upon those
who fail to comply with his orders or are wanting in discipline, holding a preliminary
hearing on the crimes committed on board the vessel on the seas, which crimes shall
be turned over to the authorities having jurisdiction over the same at the 1 st port
touched.
89
4.To make contracts for the charter of the vessel in the absence of the ship agent or
of its consignee, acting in accordance with the instructions received and protecting the
interests of the owner with utmost care.
5.To adopt all proper measures to keep the vessel well supplied and equipped,
purchasing all that may be necessary for the purpose, provided there is no time to
request instruction from the ship agent.
6.To order, in similar urget cases while on a voyage, the repairs on the hull and
engines of the vessel and in its rigging and equipment, which are absolutely necessary
to enable it to continue and finish its voyage; but if he should arrive at a point where
there is a consignee of the vessel, he shall act in accordance with the latter.
Art 611. In order to comply with the obligations mentioned in the preceding article, the
captain, when he has no funds and does not expect to receive any ship agent, shall
obtain the same in the successive order stated below:
1.By requesting said funds from the consignee of the vessel or correspondents of the
ship agent.
2.By applying to the consignee of the cargo or to those interested therein.
3.By drawing on the ship agent.
4.BY borrowing the amount required by means of a loan on bottomry.
5.By selling a sufficient amount of the cargo to cover the sum absolutely indispensible
for the repair of the vessel and to enable it to continue its voyage.
In these 2 last cases he must apply to the judicial authority of the port, if inthe
Philippines, and to the consul of the Republic of the Philippines if in a foreign country,
and where there is none, to the local authority, proceeding inaccordance with the
provisions of Art 583, and with the provisions of the lawof civil procedure.
Art 612. The ff obligations shall be inherent in the office of the captain:
90
1.To have on board before starting on a voyage a detailed inventory of the hull,
engines, rigging, spare-masts, tackle, and other equipment of the vessel; the royal or
the navigation certificate; the roll of persons who make up the crew of the vessel, and
the contracts entered into with them; the list of passengers; the bill of health; the
certificate of registry proving the ownership of the vessel and all the obligations which
encumber the same up to that date; the charter parties or authenticated copies thereof;
the invoices ormanifests of the cargo, and the memorandum of the visit or inspection
by experts, should it have been made at the port of departure.
2.To have a copy of this code on board.
3.To have 3 foied ad stamed books, placing at the beginning of each one a
memorandum of the number of folios it contains, signed by the maritime authority, and
in his absence by the competent authority. In the first book, which shall be called
“logbook,” he shall enter day by day the condition of the atmosphere, the prevailing
winds, the courses taken, the riging carried, the power of the engines used in
navigation, the distances covered, the manuevers executed, and other incidents of
navigation; he shall also enter the damage suffered by the vessel in her hull, engines
rigging, and tackle no matter what its cause may be, as well as the impairment and
damage suffered by cargo, and the effect and importance of the jettison, should there
be any; and in cases of serious decisions which require the advice of the crew and
passengers, he shall record the decisions adopted.
For the information indicated he shall make use of the binnacle book and of the steam
of engine kept by the engineer.
In the 2nd book called the accounting book, he shall record all the amounts collected
and paid for the account of the vessel, entering specifically art byart, the source of the
collection and the amounts spent for provisions, repairs, acquisitions of equipment or
goods, fuel, food, outfits, wages, and other expenses of whatever nature they may be.
He shall furthermore enter there ina list of all the members of the crew, stating their
domiciles, their wages and salaries, and the amounts they may have received on
account, directly or by delivery to their families.
91
In the third book called the freight book, he shall record the loading and discharge of
all the goods, stating their mark and packages, names of the shippers and of the
consignees, ports of loading and unloading, and the freightage they give. In this same
book he shall record the names and places of sailing of the passengers, the number
of packages in their baggage, ad the price of passage.
11.To conduct himself according to the rules and precepts contained in the instructions
of the ship agent, being liable for all that which he may do in violation thereof.
12.To inform the ship agent from the port at which the vessel arrives, of the reason of
his arrival taking advantage of the semaphore, telegraph, mail, etc., as the case may
be; to notify him of the cargo he may have received, stating the names and domiciles
of the shippers, freightage earned, and amounts borrowed on bottomry loan; to advise
him of his departure, and of any operation and date which may be of interest to him.
13.To observe the rules with respect to situation, lights and maneuvers in order to
avoid collisions.
14.To remain on board, in case the vessel is in danger, until all hope to save it is lost,
and before abandoning it, to hear the officers of the crew, abiding by the decision of
the majority; and if the boats are to be taken to, he shall take with him, before anything
else, the books and papers, and then the articles of most value, being obliged to prove,
in case of the loss of the books and papers, that he did all he could to save them.
15. In case of wreck, to make the proper protest in due form at the first port of arrival,
before the competent authority or the Philippine consul, within twenty-four hours,
specifying therein all the incidents of the wreck, in accordance with subdivision 8 of
this article.
16.To comply with the obligations imposed by the laws and regulations on navigation,
customs, health, and others.
92
3. Prohibited Acts and Transactions – Art. 613-615, 617, 621, 583
Art 614. A captain who having made and agreement to make a voyage, fails to perform
his undertaking, without being prevented by fortuitous accident or force majeure, shall
indemnify for all the losses which he may cause without prejudice to the criminal
penalties which may be proper.
Art 615. Without the consent of the agent, the captain cannot have himself substituted
by another person; and should he do so, besides being liable for all the acts of the
substitute and bound to the indemnities mentioned i the foregoing articles, the captain
as well as the substitute may be discharged by the ship agent.
Art 617. The captain may not contract loans on respondentia secured by cargo; and
should he do so, the contracts shall be void. Neither may he borrow money or bottomry
for his own transactions, excepton the portion of the vessel he owns, provided that o
money has been previously borrowed of the whole vessel, and there does not exist
and other kind of lien or obligation chargeable against the vessel. If he may do so, he
must state what interest he has in the vessel.
In case of violation of this article, the principal, interest and costs shall be forthe
personal account of the captain, and the ship agent may furthermore dischargehim.
III. Other officers and crew

1. Qualifications and licensing – RA 10635 Secs. 4 and 5
SEC. 4. Powers and Functions of the MARINA.—In addition to the mandate of the
MARINA under Presidential Decree No. 474, as amended, and in order to carry out
the provisions of this Act, the MARINA shall exercise the following powers and
functions:
(a) Act as the single and central maritime administration for all purposes relating to
compliance with the STCW Convention.
93
(b) Administer and ensure the effective implementation of the STCW Convention;
including all international conventions or agreements implementing or applying the
same, as well as international maritime safety conventions or agreements that it seeks
to promote compliance with.
(c) Assume all powers and functions of the Professional Regulation Commission
(PRC), the Commission on Higher Education (CHED), the Technical Education and
Skills Development Authority (TESDA), the Department of Health (DOH) and the
National Telecommunications Commission (NTC) relative to the issuance, validation,
verification, correction, revocation or cancellation of certificates of competency,
endorsement, proficiency and documentary evidence required of all seafarers and all
such other matters pertaining to the implementation of the STCW Convention, subject
to the following:
(1) The MARINA shall ensure that the examination, licensing and certification system
for marine deck and engine officers are in accordance with the requirements
prescribed under the STCW Convention. All powers, duties and functions of the PRC
on examination, licensing and certification system for marine deck and engine officers
as provided in Republic Act No. 8544, otherwise known as “The Philippine Merchant
Marine Officers Act of 1998”, shall henceforth be exercised by the MARINA. The
compensation and allowances of the Board of Marine Deck Officers and Marine
Engine Officers under Article TV, Section 8 of Republic Act No. 8544 shall, however,
be comparable to the compensation and allowances being received by the
chairpersons and members of other existing regulatory boards under the PRC and as
provided in the General Appropriations Act.
(2) The MARINA shall adopt rules and regulations, in accordance with the STCW
Convention, governing able-bodied deck and engine ratings including
(i) Monitoring and verification of compliance with the standards of ratings;
(ii) Harmonization of the procedures for periodic evaluation, assessment and

monitoring activities undertaken by accredited institutions with registered programs for
ratings; and
94
(iii) Issuance of certificates of proficiency to ratings.
(3) The MARINA shall ensure that all legal and administrative measures relative to the
issuance of certificates of competency of GMDSS radio operators are in accordance
with the STCW Convention. For this purpose, the MARINA shall assess, revalidate
and issue GMDSS radio operator’s certificate in accordance with the provisions under
the STCW Convention.
(4) The MARINA shall ensure that all maritime education, including the curricula and
training programs, are structured and delivered in accordance with the written
programs, methods and media of delivery, procedures, and course materials
compliant with international standards as prescribed under the STCW Convention. For
this purpose, the MARINA shall:
(i) Chair the Technical Panel on Maritime Education (TPME) of the CHED; the TPME
shall among others, formulate, review and recommend to the CHED en banc all
policies, standards, and guidelines for maritime education, including curricula, facilities
and guidelines;
(ii) Monitor and verify, in coordination with the CHED, compliance with the policies,
standards, and guidelines of maritime education in the conduct of maritime education
and training programs;-
(iii) Review and harmonize the procedures for periodic evaluation, assessment and
monitoring of all maritime education and training institutions in accordance with the
standards of the CHED and other recognized international organizations;
(iv) Develop, formulate and recommend for implementation, strict quality assurance
mechanisms and relevant typology for maritime education programs and institutions;
(v) Recommend to the CHED en banc the closure/phase-out of substandard maritime

education institutions, in accordance with the rules and regulations, as well as
recommend alternative schemes or options for the affected maritime educational
institution;
95
(vi) Maintain an updated list of compliant and phased-out maritime education and
training programs, publish such lists in appropriate media, and provide the public with
a clear understanding of the consequences of enrolling in a phased-out program;
(5) The MARINA shall coordinate with the DOH to ensure that the medical standards
established to ascertain the medical fitness of seafarers are in accordance with the
international conventions/treaties and existing laws. For this purpose, the MARINA
shall:
(i) Ensure that the medical examinations and issuance of medical certificates by the
DOH accredited hospitals, medical clinics, and laboratories, including medical
practitioners are in accordance with the standards prescribed by the STCW
Convention; and
(ii) Ensure that medical certificates are issued by a duly-qualified medical practitioner
recognized by and accredited with the DOH, and for this purpose, a register of
recognized medical practitioners shall be maintained and made available to seafarers,
shipping companies and State parties to the STCW Convention,
SEC. 5. Composition of the Maritime Industry Board.—To ensure the proper

implementation and enforcement of the STCW Convention in relation to international
maritime safety and environmental agreements, the Commandant of the Philippine
Coast Guard (PCG), in lieu of the Secretary of National Defense, shall be included as
member of the Maritime Industry Board established pursuant to Presidential Decree
No. 474 creating the MARINA. The Maritime Industry Board may create an advisory
council that will assist the MARINA in ensuring compliance with the STCW
Convention, as it may deem proper. The number and members of this council shall be
identified and determined by the Maritime Industry Board.
Page 17
4. Contracts and Formalities – Art. 634
96
5. Duties and Liabilities – Art. 635
Art 635. A seaman who has been contracted to serve on a vessel may not rescind his
contract or fail to comply therewith except by reason of legitimate impediment which
may have happened to him.
Neither may he transfer from the services of one vessel to another without obtaining
the written permission of the captain of the vessel on which he may be.
If without obtaining said permission, the seaman who has signed for one vessel should
sign for another one, the second contract shall be void, and the captain may choose
between forcing him to fulfil the service to which he first bound himself, or at his
expense to look for a person to substitute him.
Furthermore, he shall lose the wages earned on the first contract, to the benefit of the
vessel for which he had signed.
A captain who, knowing that a seaman is in the service of another vessel, should have
made a new agreement with him without having required of him the permission
regerred to the captain of the vessel to which the seaman first belonged, for that part
of the indemnity, referred to in the 3rd paragraph of this art, which theseamn may not
be able to pay
6. Rights- Arts. 636 to 647
Art 636. If there is no fixed period for which a seaman has been contracted he may
not be discharged until the end of the return voyage to the port where he enlisted.
Art 637. Neither may the captain discharged a seaman during the time of his contract
except for just cause, the ff being considered as such.
1.The perpetration of a crime which disturbs order on the vessel.
2.Repeated insubordination, want of discipline, or o fulfilment of the service.
3.Repeated incapacity and negligence in the fulfilment of the service he should render.
4.Habitual drunkenness
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5.Any occurrence which incapacitates the seaman to perform the worken trusted to
him, with the exception of that provided in Art 644.
6.Desertion The captain may, however, before getting out on a voyage and without
getting out on a voyage and without giving any reason, refuse to permit a seaman
whom he may have engaged to go on board, and leave him on land, in which case he
will be obliged to pay him his wages as if he had rendered services.
This indemnity shall be paid from the funds of the vessel if the captain should have
acted for reasons of prudence and in the interest of the safety and good services of
the former. Should this not be the case, it shall be paid to the captain personally. After
the voyage has begun, during the same, and until the conclusion thereof, the captain
may not abandon any member of his crew on land or on sea, unless, by reason of
some crime, his imprisonment and delivery to the component authority i the first port
touched should be proper, a matter obligatory for the captain.
IV. Supercargoes – Arts. 649-651
ARTICLE 649. Supercargoes shall discharge on board the vessel the administrative
duties which the agent or shippers may have assigned them; they shall keep an
account and record of their transactions in a book which shall have the same
conditions and requisites as required for the accounting book of the captain, and shall
respect the latter in his duties as chief of the vessel.
The powers and liabilities of the captain shall cease, when there is a supercargo, with
regard to that part of the administration legitimately conferred upon the latter, but shall
continue in force for all acts which are inseparable from his authority and office.
ARTICLE 650. All the provisions contained in the second section of Title III, Book II,
with regard to qualifications, manner of making contracts, and liabilities of factors shall
be applicable to supercargoes.
ARTICLE 651. Supercargoes can not, without special authorization or agreement,

make any transaction for their own account during the voyage, with the exception of
the ventures which, in accordance with the custom of the port of destination, they are
permitted to do.
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Neither shall they be permitted to invest in the return trip more than the profits from
the ventures, unless there is a special authorization thereto from the principals.
D. Accidents and Damages in Maritime Commerce

I. Averages
1. Nature and Kinds – Arts. 806-808
ARTICLE 806. For the purposes of this Code the following shall be considered
averages: 1. All extraordinary or accidental expenses which may be incurred during
the navigation for the preservation of the vessel or cargo, or both. 2. All damages or
deterioration the vessel may suffer from the time she puts to sea from the port of
departure until she casts anchor in the port of destination, and those suffered by the
merchandise from the time it is loaded in the port of shipment until it is unloaded in the
port of consignment.
ARTICLE 807. The petty and ordinary expenses of navigation, such as pilotage of
coasts and ports, lighterage and towage, anchorage dues, inspection, health,
quarantine, lazaretto, and other so-called port expenses, costs of barges, and
unloading, until the merchandise is placed on the wharf, and any other expenses
common to navigation shall be considered ordinary expenses to be defrayed by the
shipowner, unless there is a special agreement to the contrary. ARTICLE 808
Averages shall be:
1. Simple or particular.
2. General or gross.
2. Simple or Particular
a. Defined – Art. 809
ARTICLE 809 Simple or particular averages shall be, as a general rule, all the
expenses and damages caused to the vessel or to her cargo which have not
redounded to the benefit and common profit of all the persons interested in the vessel
and her cargo, and especially the following:
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1. The damages suffered by the cargo from the time of its embarkation until it is
unloaded, either on account of the nature of the goods or by reason of an accident at
sea or force majeure, and the expenses incurred to avoid and repair the same.
2. The damages suffered by the vessel in her hull, rigging, arms, and equipment, for
the same causes and reasons, from the time she puts to sea from the port of departure
until she anchored in the port of destination.
3. The damages suffered by the merchandise loaded on deck, except in coastwise

navigation, if the marine ordinances allow it.
4. The wages and victuals of the crew when the vessel should be detained or
embargoed by a legitimate order or force majeure, if the charter should have been for
a fixed sum for the voyage.
5. The necessary expenses on arrival at a port, in order to make repairs or secure

provisions.
6. The lowest value of the goods sold by the captain in arrivals under stress for the
payment of provisions and in order to save the crew, or to cover any other requirement
of the vessel against which the proper amount shall be charged. 7. The victuals and
wages of the crew during the time the vessel is in quarantine.
8. The damage suffered by the vessel or cargo by reason of an impact or collision with
another, if it were accidental and unavoidable. If the accident should occur through the
fault or negligence of the captain, the latter shall be liable for all the damage caused.
9. Any damage suffered by the cargo through the faults, negligence, or barratry of the
captain or of the crew, without prejudice to the right of the owner to recover the
corresponding indemnity from the captain, the vessel, and the freight.
b. Effects – Art. 810
ARTICLE 810 The owner of the goods which gave rise to the expense or suffered the
damage shall bear the simple or particular averages.
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Page 18
3. Gross or Genera
a. Defined – Arts. 811, 817, 818
ARTICLE 811 General or gross averages shall be, as a general rule, all the damages
and expenses which are deliberately caused in order to save the vessel, her cargo, or
both at the same time, from a real and known risk, and particularly the following:
1. The goods or cash invested in the redemption of the vessel or cargo captured by
enemies, privateers, or pirates, and the provisions, wages, and expenses of the vessel
detained during the time the arrangement or redemption is taking place.
2. The goods jettisoned to lighten the vessel, whether they belong to the vessel, to
the cargo, or to the crew, and the damage suffered through said act by the goods kept.
3. The cables and masts which are cut or rendered useless, the anchors and the
chains which are abandoned in order to save the cargo, the vessel, or both.
4. The expenses of removing or transferring a portion of the cargo in order to lighten

the vessel and place her in condition to enter a port or roadstead, and the damage
resulting therefrom to the goods removed or transferred.
5. The damage suffered by the goods of the cargo through the opening made in the
vessel in order to drain her and prevent her sinking.
6. The expenses caused through floating a vessel intentionally stranded for the
purpose of saving her.
7. The damage caused to the vessel which it is necessary to break open, scuttle, or
smash in order to save the cargo.
8. The expenses of curing and maintaining the members of the crew who may have
been wounded or crippled in defending or saving the vessel.
9. The wages of any member of the crew detained as hostage by enemies, privateers,
or pirates, and the necessary expenses which he may incur in his imprisonment, until
he is returned to the vessel or to his domicile, should he prefer it.
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10. The wages and victuals of the crew of a vessel chartered by the month during the
time it should be embargoed or detained by force majeure or by order of the
Government, or in order to repair the damage caused for the common good.
11. The loss suffered in the value of the goods sold at arrivals under stress in order to
repair the vessel because of gross average.
12. The expenses of the liquidation of the average.
ARTICLE 817 If in lightening a vessel on account of a storm, in order to facilitate her

entry into a port or roadstead, part of her cargo should be transferred to lighters or
barges and be lost, the owner of said part shall be entitled to indemnity, as if the loss
has originated from a gross average, the amount thereof being distributed between
the entire vessel and cargo which caused the same. If, on the contrary, the
merchandise transferred should be saved and the vessel should be lost, no liability
can be demanded of the salvage.
ARTICLE 818 If, as a necessary measure to extinguish a fire in a port; roadstead;

creek, or bay, it should be decided to sink any vessel, this loss shall be considered
gross average, to which the vessels saved shall contribute.
b. Essential Requisites -Arts. 813, 814, 860, 612
ARTICLE 813 In order to incur the expenses and cause the damages corresponding
to gross average, a previous resolution of the captain, adopted after deliberation with
the sailing mate and other officers of the vessel, and with a hearing of the persons
interested in the cargo who may be present, shall be required. If the latter shall object,
and the captain and officers, or a majority, or the captain, if opposed to the majority,
should consider certain measures necessary, they may be executed under his liability,
without prejudice to the freighters exercising their rights against the captain before the
judge or court of competent jurisdiction, if they can prove that he acted with malice,
lack of skill, or negligence. If the persons interested in the cargo, being on the vessel,
should not be heard, they shall not contribute to the gross average, which contribution
shall be paid by the captain, unless the urgency of the case should be such that the
time necessary for previous deliberation was lacking.
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ARTICLE 814 The resolution adopted to cause the damages which constitute a
general average must necessarily be entered in the log book, stating the motives and
reasons therefor, the votes against it, and the reasons for the disagreement should
there be any, and the irresistible and urgent causes which moved the captain if he
acted of his own accord. In the first case the minutes shall be signed by all the persons
present who could do so before taking action if possible, and if not at the first
opportunity; in the second case by the captain and by the officers of the vessel. In the
minutes and after the resolution there shall be stated in detail all the goods cast away,
and mention shall be made of the injuries caused to those kept on board. The captain
shall be obliged to deliver one copy of these minutes to the maritime judicial authority
of the first port he may make within twenty-four hours after his arrival, and to ratify it
immediately by an oath.
ARTICLE 860 If, notwithstanding the jettison of the merchandise, breakage of masts,
ropes, and equipment, the vessel should be lost running said risk, no contribution
whatsoever by reason of gross average shall be proper. The owners of the goods
saved shall not be liable for the indemnity of those jettisoned, lost, or damaged.
c. Effects – Art. 812
ARTICLE 812 In order to satisfy the amount of the gross or general averages, all the
persons having an interest in the vessel and cargo therein at the time of the occurrence
of the average shall contribute.
d. Jettison – Arts. 815, 816
ARTICLE 815 The captain shall supervise the jettison, and shall order the goods cast
overboard in the following order: 1. Those which are on deck, beginning with those
which embarrass the handling of the vessel or damage her, preferring, if possible, the
heaviest ones and those of least utility and value.
2. Those in the hold, always beginning with those of the greatest weight and
smallest value, to the amount and number absolutely indispensable.
ARTICLE 816 In order that the goods jettisoned may be included in the gross average
and the owners thereof be entitled to indemnity, it shall be necessary in so far as the
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cargo is concerned that their existence on board be proven by means of the bill of
lading; and with regard to those belonging to the vessel, by means of the inventory
made up before the departure, in accordance with the first paragraph of Article 612.
e. Jason Clauses – See York-Antwerp Rules, Rule D
York Antwerp Rules

RULE D
Rights to contribution in general average shall not be affected, though the event which
gave rise to the sacrifice or expenditure may have been due to the fault of one of the
parties to the adventure, but this shall not prejudice any remedies or defences which
may be open against or to that party in respect of such fault.
II. Arrival Under Stress

1. Causes – Arts. 819 and 820
ARTICLE 819 If the captain during the navigation should believe that the vessel can
not continue the voyage to the port of destination on account of the lack of provisions,
well founded fear of seizure, privateers or pirates, or by reason of any accident of the
sea disabling her to navigate, he shall assemble the officers and shall call the persons
interested in the cargo who may be present, and who may attend the meeting without
the right to vote; and if, after examining the circumstances of the case, the reasons
should be considered well founded, it shall be decided to make the nearest and most
convenient port drafting and entering in the log book the proper minutes, which shall
be signed by all. The captain shall have the deciding vote and the persons interested
in the cargo may make the objections and protests they may deem proper, which shall
be entered in the minutes in order that they may make use thereof in the manner they
may consider advisable.
ARTICLE 820 The arrival under stress shall not be considered legal in the following
cases: 1. If the lack of provisions should arise from the failure to take the necessary
provisions for the voyage, according to usage and custom, or if they should have been
rendered useless or lost through bad stowage or negligence in their care. 2. If the risk
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of enemies, privateers, or pirates should not have been well known, manifest, and
based on positive and justifiable facts. 3. If the injury to the vessel should have been
caused by reason of her not being repaired, rigged, equipped, and arranged in a
convenient manner for the voyage, or by reason of some erroneous order of the
captain. 4. Whenever malice, negligence, want of foresight, or lack of skill on the part
of the captain is the reason for the act causing the damage.
2. Formalities -Arts. 819, 822, 612
ARTICLE 819 If the captain during the navigation should believe that the vessel can
not continue the voyage to the port of destination on account of the lack of provisions,
well founded fear of seizure, privateers or pirates, or by reason of any accident of the
sea disabling her to navigate, he shall assemble the officers and shall call the persons
interested in the cargo who may be present, and who may attend the meeting without
the right to vote; and if, after examining the circumstances of the case, the reasons
should be considered well founded, it shall be decided to make the nearest and most
convenient port drafting and entering in the log book the proper minutes, which shall
be signed by all. The captain shall have the deciding vote and the persons interested
in the cargo may make the objections and protests they may deem proper, which shall
be entered in the minutes in order that they may make use thereof in the manner they
may consider advisable.
ARTICLE 822 If in order to make repairs to the vessel or because there should be
danger of the cargo suffering damage it should be necessary to unload, the captain
must request authorization of the judge or court of competent jurisdiction to lighten the
vessel, and do so with the knowledge of the person interested or representative of the
cargo, should there be one. In a foreign port, it shall be the duty of the Spanish *
consul, where there is one, to give the authorization. In the first case, the expenses
shall be defrayed by the ship agent or owner, and in the second, they shall be for the
account of the owners of the merchandise, for whose benefit the act took place. If the
unloading should take place for both reasons, the expenses shall be defrayed in
proportion to the value of the vessel and that of the cargo.
3. Expenses – Arts. 821, 822
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ARTICLE 821 The expenses caused by the arrival under stress shall always be for
the account of the shipowner or agent, but the latter shall not be liable for the damage
which may be caused the shippers by reason of the arrival under stress, provided the
latter is legitimate. Otherwise, the shipowner or agent and the captain shall be jointly
liable.
ARTICLE 822 If in order to make repairs to the vessel or because there should be
danger of the cargo suffering damage it should be necessary to unload, the captain
must request authorization of the judge or court of competent jurisdiction to lighten the
vessel, and do so with the knowledge of the person interested or representative of the
cargo, should there be one. In a foreign port, it shall be the duty of the Spanish *
consul, where there is one, to give the authorization. In the first case, the expenses
shall be defrayed by the ship agent or owner, and in the second, they shall be for the
account of the owners of the merchandise, for whose benefit the act took place. If the
unloading should take place for both reasons, the expenses shall be defrayed in
proportion to the value of the vessel and that of the cargo.
4. Responsibility of Captain – Arts. 823-825
ARTICLE 823 The care and preservation of the cargo which has been unloaded shall
be in charge of the captain, who shall be responsible for the same, except in cases of
force majeure.
ARTICLE 824 If the entire cargo or part thereof should appear to be damaged, or there
should be imminent danger of its being damaged, the captain may request of the judge
or court of competent jurisdiction or the consul, in a proper case, the sale of all or of
part of the former, and the person taking cognizance of the matter shall authorize it
after an examination and declaration of experts, advertisements, and other formalities
required by the case and an entry in the book, in accordance with the provisions of
Article 624. The captain shall, in a proper case, justify the legality of the procedure,
under the penalty of answering to the shipper for the price the merchandise would
have brought if it should have arrived at the port of its destination in good condition.
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ARTICLE 825 The captain shall answer for the damages caused by his delay, if the
reason for the arrival under stress having ceased, he should not continue the voyage.
If the reason for said arrival should have been the fear of enemies, privateers, or
pirates, before sailing, a discussion and resolution of a meeting of the officers of the
vessel and persons interested in the cargo who may be present shall take place, in
accordance with the provisions contained in Article 819.
Page 19
III. Collisions
1. Classes and Effects
a. Fortuitious – Arts. 830, 832
ARTICLE 830 If a vessel should collide with another by reason of an accident or

through force majeure, each vessel and her cargo shall be liable for their own damage.
ARTICLE 832 If, by reason of a storm or other cause of force majeure, a vessel which
is properly anchored and moored should collide with those in her immediate vicinity,
causing them damage, the injury occasioned shall be looked upon as particular
average to the vessel run into.
b. Culpable – Arts. 826, 827, and 831 NOTE: Art.

612
ARTICLE 826 If a vessel should collide with another through the fault, negligence, or
lack of skill of the captain, sailing mate, or any other member of the complement, the
owner of the vessel at fault shall indemnify the losses and damages suffered, after an
expert appraisal.
ARTICLE 827 If both vessels may be blamed for the collision, each one shall be liable
for his own damages, and both shall be jointly responsible for the losses and damages
suffered by their cargoes.
ARTICLE 831 If a vessel should be forced to collide with another one by a third vessel,
the owner of the third vessel shall indemnify for the losses and damages caused, the
captain thereof being civilly liable to said owner.
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c. Inscrutable Fault – Art. 828
ARTICLE 828 The provisions of the foregoing article are applicable to the case in
which it can not be decided which of the two vessels was the cause of the collision.
IV. Shipwrecks – Arts. 840 – 843, 612
ARTICLE 840 The losses and deteriorations suffered by a vessel and her cargo by
reason of shipwreck or stranding shall be individually for the account of the owners,
the part of the wreck which may be saved belonging to them in the same proportion.
ARTICLE 841 If the wreck or stranding should arise through the malice, negligence,
or lack of skill of the captain, or because the vessel put to sea insufficiently repaired
and prepared, the owner or the freighters may demand indemnity of the captain for the
damages caused to the vessel or cargo by the accident, in accordance with the
provisions contained in Articles 610, 612, 614, and 621.
ARTICLE 842 The goods saved from the wreck shall be specially liable for the
payment of the expenses of the respective salvage, and the amount thereof must be
paid by the owners of the former before they are delivered to them, and with preference
to any other obligation, if the merchandise should be sold.
ARTICLE 843 If several vessels navigate under convoy, and any of them should be
wrecked, the cargo saved shall be distributed among the rest in the proportion to the
amount each one can receive. If any captain should refuse, without sufficient cause,
to receive what may correspond to him, the captain of the wrecked vessel shall enter
a protest against him before two sea officials of the losses and damages resulting
therefrom, ratifying the complaint within twenty-four hours after arrival at the first port,
and including it in the proceedings he must institute in accordance with the provisions
contained in Article 612. Should it not be possible to transfer to the other vessels the
entire cargo of the one wrecked, the goods of the highest value and smallest volume
shall be saved first, the designation thereof being made by the captain, in concurrence
with the officers of his vessel.
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1. The Salvage Law (Act. No. 2616)
SECTION 1. When in case of shipwreck, the vessel or its cargo shall be beyond the
control of the crew, or shall have been abandoned by them, and picked up and
conveyed to a safe place by other persons, the latter shall be entitled to a reward for
the salvage. Those who, not being included in the above paragraph, assist in saving
a vessel or its cargo from shipwreck, shall be entitled to a like reward.
SECTION 2. If the captain of the vessel, or the person acting in his stead, is present,
no one shall take from the sea, or from the shores or coast merchandise or effects
proceeding from a shipwreck or proceed to the salvage of the vessel, without the
consent of such captain or person acting in his stead.
SECTION 3. He who shall save or pick up a vessel or merchandise at sea, in the

absence of the captain of the vessel, owner, or a representative of either of them, they
being unknown, shall convey and deliver such vessel or merchandise, as soon as
possible, to the Collector of Customs, if the port has a collector, and otherwise to the
provincial treasurer or municipal mayor.
SECTION 4. After the salvage is accomplished, the owner or his representative shall
have a right to the delivery of the vessel or things saved, provided that he pays, or
gives a bond to secure, the expenses and the proper reward. The amount and
sufficiency of the bond, in the absence of agreement, shall be determined by the
Collector of Customs or by the Judge of the Court of First Instance of the province in
which the things saved may be found.
SECTION 5. The Collector of Customs, provincial treasurer, or municipal mayor, to

whom a salvage is reported, shall order:
a. That the things saved be safeguard and inventoried.
109
b. The sale at public auction of the things saved which may be in danger of immediate
loss or of those whose conservation is evidently prejudicial to the interests of the
owner, when no objection is made to such sale.
c. The advertisement within thirty days subsequent to the salvage, in one of the local
newspapers or in the nearest newspaper published, of all the details of the disaster,
with a statement of the mark and number of the effects requesting all interested
persons to make their claims.
SECTION 6. If, while the vessel or things saved are at the disposition of the
authorities, the owner or his representative shall claim them, such authorities shall
order their delivery to such owner or his representative, provided that there is no
controversy over their value, and a bond is given by the owner or his representative to
secure the payment of the expenses and the proper reward. Otherwise, the delivery
shall not be made until the matter is decided by the Court of First Instance of the
province.
SECTION 7. No claim being presented in the three months subsequent to the

publication of the advertisement prescribed in sub-section (c) of Section five, the things
save shall be sold at public auction, and their proceeds, after deducting the expenses
and the proper reward shall be deposited in the insular treasury. If three years shall
pass without anyone claiming it, one-half of the deposit shall be adjudged to him who
saved the things, and the other half to the insular government.
SECTION 8. The following shall have no right to a reward for salvage or assistance:
a. The crew of the vessel shipwrecked or which was in danger of a shipwreck;
b. He who shall have commenced the salvage in spite of opposition of the captain or
his representative; and
c. He who shall have failed to comply with the provisions of Section three.
110
SECTION 9. If, during the danger, an agreement is entered into concerning the
amount of the reward for salvage or assistance, its validity may be impugned because
it is excessive, and it may be required to be reduced to an amount proportionate to the
circumstance.
SECTION 10. In a case coming under the last preceding section, as well as in the
absence of an agreement, the reward for salvage or assistance shall be fixed by the
Court of First Instance of the province where the things salvaged are found, taking into
account principally the expenditures made to recover or save the vessel or the cargo
or both, the zeal demonstrated, the time employed, the services rendered, the
excessive express occasioned the number of persons who aided, the danger to which
they and their vessels were exposed as well as that which menaced the things
recovered or salvaged, and the value of such things after deducting the expenses.
SECTION 11. From the proceeds of the sale of the things saved shall be deducted,
first, the expenses of their custody, conservation, advertisement, and auction, as well
as whatever taxes or duties they should pay for their entrance; then there shall be
deducted the expenses of salvage; and from the net amount remaining shall be taken
the reward for the salvage or assistance which shall not exceed fifty per cent of such
amount remaining.
SECTION 12. If in the salvage or in the rendering of assistance different persons shall
have intervened the reward shall be divided between them in proportion to the services
which each one may have rendered, and, in case of doubt, in equal parts. Those who,
in order to save persons, shall have been exposed to the same dangers shall also
have a right to participation in the reward.
SECTION 13. If a vessel or its cargo shall have been assisted or saved, entirely or
partially, by another vessel, the reward for salvage or for assistance shall be divided
between the owner, the captain, and the remainder of the crew of the latter vessel, so
as to give the owner a half, the captain a fourth, and all the remainder of the crew the
111
other fourth of the reward, in proportion to their respective salaries, in the absence of
an agreement to the contrary. The express of salvage, as well as the reward for
salvage or assistance, shall be a charge on the things salvaged on their value.
SECTION 14. This Act shall take effect on its passage.
ENACTED, FEBRUARY 4, 1916.
e. Special Contracts of Maritime Commerce
I. Charter Parties
1. Definition
2. Kinds
Page 20
II. Loans on Bottomry and Respondentia
1. Loan on Bottomry, defined

2. Loan on Respondentia, defined
3. Character of Loan – Art. 719
ARTICLE 719 A loan on bottomry or respondentia shall be considered that which the
repayment of the sum loaned and the premium stipulated, under any condition
whatsoever, depends on the safe arrival in port of the goods on which it is made, or of
their value in case of accident.
f. Bill of Lading
I. Contents -Arts. 706, 707, 713,714
ARTICLE 706 The captain and the freighter of the vessel are obliged to draft the bill
of lading, in which there shall be stated:
112
1. The name, registry, and tonnage of the vessel.
2. The name of the captain and his domicile.
3. The port of loading and that of unloading.
4. The name of the shipper.
5. The name of the consignee, if the bill of lading is issued to order.
6. The quantity, quality, number of packages, and marks of the merchandise.
7. The freight and the primage stipulated.
The bill of lading may be issued to bearer, to order, or in the name of a specific person,
and must be signed within twenty-four hours after the cargo has been received on
board, the freighter being able to request the unloading thereof at the expense of the
captain should he not sign it, and in every case indemnity for the losses and damages
suffered thereby.
ARTICLE 707 Four true copies of the original bill of lading shall be made, all of which
shall be signed by the captain and by the freighter. Of these copies the freighter shall
keep one and send another to the consignee; the captain shall take two, one for
himself and another for the agent. There may, furthermore, be made as many copies
of the bill of lading as may be considered necessary by the persons interested; but
when they are issued to order or to the bearer there shall be stated in all the copies,
be they either of the first four or of the subsequent ones, the destination of each one,
stating whether it is for the agent, for the captain, for the freighter, or for the consignee.
If the copy sent to the latter should be duplicated there must be stated in said duplicate
this fact, and that it is not valid except in case of the loss of the first one.
ARTICLE 713 If before delivering the cargo a new bill of lading should be demanded
of the captain, it being alleged that the previous ones are not presented on account of
their loss or for any other sufficient cause, he shall be obliged to issue it, provided
security for the value of the cargo is given to his satisfaction; but without changing the
consignment and stating therein the circumstances prescribed in the last paragraph of
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Article 707, when the bills of lading referred to therein are in question, under the
penalty otherwise to be liable for said cargo if not properly delivered through his fault.
ARTICLE 714 If before the vessel puts to sea the captain should die or should
discontinue in his position through any accident, the freighters shall have a right to
demand of the new captain the ratification of the first bills of lading, and the latter must
do so, provided all the copies previously issued be presented or returned to him, and
it should appear from an examination of the cargo that they are correct. The expenses
arising from the examination of the cargo shall be defrayed by the agent, without
prejudice to the right of action of the latter against the first captain, if he ceased to be
such through his own fault. Should said examination not be made, it shall be
understood that the new captain accepts the cargo as it appears from the bills of lading
issued.
II. Probative value – Art. 709, 710
ARTICLE 709 A bill of lading drawn up in accordance with the provisions of this title
shall be proof as between all those interested in the cargo and between the latter and
the underwriters, proof to the contrary being reserved by the latter.
ARTICLE 710 Should the bills of lading not agree, and there should not be observed
any correction or erasure in any of them, those possessed by the freighter or
consignee signed by the captain shall be proof against the captain or agent in favor of
the consignee or freighter; and those possessed by the captain or agent signed by the
freighter shall be proof against the freighter or consignee in favor of the captain or
agent.
g. Passenger on Sea Voyage

I. Nature of Contracts – Art. 695
ARTICLE 695 The right to passage, if issued to a specified person, can not be
transferred without the consent of the captain or of the consignee.
II. Obligations of Passengers – Arts. 693, 699, 704, 694, 700
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ARTICLE 693 Should the passage price not have been agreed upon, the judge or
court shall summarily fix it, after a statement of experts.
ARTICLE 699 After the contract has been rescinded, before or after the
commencement of the voyage, the captain shall have a right to claim payment for what
he may have furnished the passengers.
ARTICLE 704 The captain, in order to collect the price of the passage and expenses
of maintenance, may retain the goods belonging to the passenger, and in case of the
sale of the same he shall be given preference over the other creditors, acting in the
same way as in the collection of freight.
ARTICLE 694 Should the passenger not arrive on board at the time fixed, or should
leave the vessel without permission from the captain, when the latter is ready to leave
the port, the captain may continue the voyage and demand the full passage price.
ARTICLE 700 In all that relates to the preservation of order and police on board the
vessel the passengers shall conform to the orders given
III. Rights of Passengers -Arts. 697, 698
ARTICLE 697 If before beginning the voyage it should be suspended through the sole
fault of the captain or agent, the passengers shall be entitled to have their passage
refunded and to recover for losses and damages; but if the suspension was due to an
accidental cause, or to force majeure, or to any other cause beyond the control of the
captain or agent, the passengers shall only be entitled to the return of the passage
money.
ARTICLE 698 In case a voyage already begun should be interrupted the passengers
shall be obliged only to pay the passage in proportion to the distance covered, and
shall not be entitled to recover for losses and damages if the interruption is due to an
accidental cause or to force majeure, but have a right to indemnity if the interruption
should have been caused by the captain exclusively. If the interruption should be by
reason of the disability of the vessel, and the passenger should agree to await her
repair, he can not be required to pay any increased price of passage, but his living
expenses during the delay shall be for his own account. In case the departure of the
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vessel is delayed the passengers have a right to remain on board and to be furnished
with food for the account of the vessel, unless the delay is due to an accidental cause
or to force majeure. If the delay should exceed ten days, the passengers who request
it shall be entitled to the return of the passage; and if it were due exclusively to the
captain or agent they may furthermore demand indemnity for losses and damages.
A vessel which is exclusively destined to the transportation of passengers must take

them directly to the port or ports of destination, no matter what the number of
passengers may be, making all the stops indicated in her itinerary.
h. Carriage of Goods by Sea Act
Page 21
IV. Air Transportation

a. International Air Transportation
I. Contitutionality
II. When Applicable – Art. 1(1)
III. Liabilities under the Convention- Arts. 17, 18, 19
Article 17 The carrier is liable for damage sustained in the event of the death or
wounding of a passenger or any other bodily injury suffered by a passenger, if the
accident which caused the damage so sustained took place on board the aircraft or in
the course of any of the operations of embarking or disembarking.
Article 18
1. The carrier is liable for damage sustained in the event of the destruction or loss of,
or of damage to, any registered luggage or any goods, if the occurrence which caused
the damage so sustained took place during the carriage by air. 2. The carriage by air
within the meaning of the preceding paragraph comprises the period during which the
luggage or goods are in charge of the carrier, whether in an aerodrome or on board
an aircraft, or, in the case of a landing outside an aerodrome, in any place whatsoever.
3. The period of the carriage by air does not extend to any carriage by land, by sea
or by river performed outside an aerodrome. If, however, such a carriage takes place
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in the performance of a contract for carriage by air, for the purpose of loading, delivery
or transshipment, any damage is presumed, subject to proof to the contrary, to have
been the result of an event which took place during the carriage by air.
Article 19 The carrier is liable for damage occasioned by delay in the carriage by air
of passengers, luggage or goods.
IV. Limitations on Liability – Art. 22
Article 22
1. In the carriage of passengers the liability of the carrier for each passenger is limited
to the sum of 125,000 francs. Where, in accordance with the law of the Court seised
of the case, damages may be awarded in the form of periodical payments, the
equivalent capital value of the said payments shall not exceed 125,000 francs.
Nevertheless, by special contract, the carrier and the passenger may agree to a higher
limit of liability.
2. In the carriage of registered luggage and of goods, the liability of the carrier is
limited to a sum of 250 francs per kilogram, unless the consignor has made, at the
time when the package was handed over to the carrier, a special declaration of the
value at delivery and has paid a supplementary sum if the case so requires. In that
case the carrier will be liable to pay a sum not exceeding the declared sum, unless he
proves that that sum is greater than the actual value to the consignor at delivery.
3. As regards objects of which the passenger takes charge himself the liability of the
carrier is limited to 5,000 francs per passenger.
4. The sums mentioned above shall be deemed to refer to the French franc consisting
of 65 « milligrams gold of millesimal fineness 900. These sums may be converted into
any national currency in round figures.
V. When limitations unavailable – Art. 3, 25
Article 25
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1. The carrier shall not be entitled to avail himself of the provisions of this Convention
which exclude or limit his liability, if the damage is caused by his wilful misconduct or
by such default on his part as, in accordance with the law of the Court seised of the
case, is considered to be equivalent to wilful misconduct.
2. Similarly the carrier shall not be entitled to avail himself of the said provisions, if the
damage is caused as aforesaid by any agent of the carrier acting within the scope of
his employment.
VI. Conditions on imposition of Liability – Art. 26, 28, 29
Article 26
1. Receipt by the person entitled to delivery of luggage or goods without complaint is

prima facie evidence that the same have been delivered in good condition and in
accordance with the document of carriage.
2. In the case of damage, the person entitled to delivery must complain to the carrier
forthwith after the discovery of the damage, and, at the latest, within three days from
the date of receipt in the case of luggage and seven days from the date of receipt in
the case of goods. In the case of delay the complaint must be made at the latest within
fourteen days from the date on which the luggage or goods have been placed at his
disposal.
3. Every complaint must be made in writing upon the document of carriage or by

separate notice in writing despatched within the times aforesaid.
4. Failing complaint within the times aforesaid, no action shall lie against the carrier,
save in the case of fraud on his part.
Article 28
1. An action for damages must be brought, at the option of the plaintiff, in the territory
of one of the High Contracting Parties, either before the Court having jurisdiction where
the carrier is ordinarily resident, or has his principal place of business, or has an
establishment by which the contract has been made or before the Court having
jurisdiction at the place of destination.
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2. Questions of procedure shall be governed by the law of the Court seised of the
case.
Article 29
1. The right to damages shall be extinguished if an action is not brought within two
years, reckoned from the date of arrival at the destination, or from the date on which
the aircraft ought to have arrived, or from the date on which the carriage stopped.
2. The method of calculating the period of limitation shall be determined by the law of
the Court seised of the case.
a. Passengers Rights
DOTC-DTI Joint Administrative Order No. 1, s. 2012

December 10, 2012
Tags: Department of Trade and Industry, Department of Transportation and
Communications, departmental issuances
JOINT DOTC-DTI ADMINISTRATIVE ORDER NO. 01
Series of 2012
SUBJECT: PROVIDING FOR A BILL OF RIGHTS FOR AIR PASSENGERS AND

CARRIER OBLIGATIONS
WHEREAS, pursuant to the Republic Act No. 776, otherwise known as the Civil
Aeronautics Act of the Philippines, the Department of Transportation and
Communications (DOTC), through the Civil Aeronautics Board (CAB), is
mandated by law to regulate the economic aspect of aviation, and develop and
promote the air potential of the Philippines, with due regard to public interest
and convenience;
WHEREAS, pursuant to Republic Act No. 7394, otherwise known as the

Consumer Act of the Philippines, the Department of Trade and Industry (DTI) is
the agency mandated to protect the consumers against deceptive, unfair and
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unconscionable sales acts or practices and from misleading advertisements
and fraudulent sales promotions, other than those falling under the jurisdiction
of the Department of Health;
WHEREAS, the Philippine aviation industry, under a liberalized aviation regime,

and especially with the emerging dominance of low cost carriers, has
dramatically expanded, as shown by the unprecedented and consistent double
digit growth rates of domestic and international travel in the last five (5) years;
WHEREAS, it is the thrust of public policy to encourage the entry of more

players in the air transportation industry and promote greater competition
among air carriers, which, in turn will enhance air service availability and create
more options for better, safer, and more efficient and affordable air
transportation, in support of trade, tourism and public convenience;
WHEREAS, it is equally the objective of public policy to maintain a level playing

field in the air transportation industry, conducive to sound, healthy and fair
competition among industry players, as against disastrous and ruinous
competition that can undermine public interest;
WHEREAS, an air carrier ticket constitutes a contract of carriage between an air

carrier and a passenger, whereby the air carrier, for consideration, obligates
itself to transport a passenger by air safely, efficiently and conveniently along a
stipulated route at a given date and time, subject to certain conditions and/or
restrictions;
WHEREAS, such a contract of carriage creates an asymmetrical relationship

between an air carrier and a passenger, considering that, while a passenger has
the option to buy or not to buy the service, the decision of the passenger to buy
the ticket binds such passenger, by adhesion, to all the conditions and/or
restrictions attached to the air carrier ticket on an all-or-nothing basis, without
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any say, whatsoever, with regard to the reasonableness of the individual
conditions and restrictions attached to the air carrier ticket;
WHEREAS, there is a need to infuse a certain measure of balance, fairness and

reasonableness between the precarious position of a passenger vis-à-vis the
vast resources at the disposal of the air carrier, especially in a liberalized and
highly competitive aviation environment, which, if unfettered can lead to
unsound business policies and practices of air carriers that are prejudicial to
the rights and interests of the passengers;
NOW, THEREFORE, this Order is hereby prescribed for the information,

guidance, and compliance of all concerned.
CHAPTER I
GENERAL PROVISIONS
Section 1. Title of Regulation. This Regulation shall be known and cited as the
“Air Passenger Bill of Rights”.
Section 2. Definition. For the purpose of this Regulation:
2.1 “Air Carrier” refers to a Philippine-based carrier operating scheduled or non-

scheduled domestic and/or international flights to or from or serving a point
within the Philippines, or a foreign carrier operating scheduled or non-
scheduled international flights from the Philippines. Air carriers are also
generally referred to as airlines.
2.2 “Baggage” is any personal property carried by the passenger, either by

check-in or hand-carry. “Off-loaded Baggage” refers to baggage which has been
checked in but has either not been put in or been subsequently removed from
the cargo hold of the carrier.
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2.3 “Cancellation” is the act of calling off a flight. This shall include the following
instances:
(a) Cancellation by the air carrier before the estimated time of departure (ETD)
with or without its fault;
(b) Cancellation by the air carrier after an unduly long delay;
(c) Cancellation by the passenger holding a regular fare/ticket, or a situation

deemed cancelled as contemplated in Section 12.2;
2.4 “Check-in deadline” refers to the point in time before the published ETD on
or before which a passenger must present himself/herself to the air carrier at
the latter’s check-in counter, which is usually not less than forty-five (45)
minutes before such ETD.
2.5 “Check-in period” is the time when the air carrier’s check-in counters are
open for accepting and processing passengers checking in for their flights,
which starts at least two (2) hours before the ETD in international airports and
in other airports designated by the DOTC. In other airports, the check-in period
shall start at least one (1) hour before the ETD.
2.6 “Confirmed Reserved Seat” means a seat on a specific date and on a specific
flight and class of service of a carrier, which has been requested by a passenger,
and which the carrier or its agent has verified, by appropriate notation on the
ticket, as being reserved for the accommodation of the passenger.
2.7 “Convention” refers to the applicable international agreement, convention,

or treaty on carriage of goods or persons by air signed and/or ratified by the
Philippines.
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2.8 “Delay” is the result of the deferment of a flight to a later time. “Terminal
Delay” is a delay that occurs while passengers are still inside the terminal
waiting for boarding, while “Tarmac Delay” is a delay that occurs while
passengers are already on board the aircraft.
2.9 “Denied Check-in” takes place when a passenger, who has presented
himself/herself for check-in at the appointed area and at the appointed time, is
denied or not processed for boarding a particular flight. “Denied Boarding”
takes place when a passenger, who holds a confirmed reserved seat, and who
has presented himself/herself for carriage at the proper time and place and fully
complied with the carrier’s check-in and reconfirmation procedures, and who is
acceptable for carriage under the carrier’s tariff, was not allowed to board the
aircraft.
2.10 “Fare” is payment in consideration for the carriage of a passenger.

“Regular Fare” is any fare that is offered on a regular basis and does not qualify
as promotional fare. “Promotional Fare”, which is generally lower than a regular
fare, is applied for before, and approved as such by, the CAB.
2.11 “Government requisition of space” refers to a formal request by the

government or its agencies to an air carrier company for the use of an aircraft,
or any part thereof, for regulatory, safety, security, and/or emergency purposes.
2.12 “No-show” is the failure of the passenger to appear at the check-in counter
within the check-in deadline or to show up at the boarding gate at the time
indicated on the boarding pass.
2.13 “Overbooking” is the practice by air carriers of selling confirmed reserved

space beyond the actual seat capacity of the aircraft.
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2.14 “Passenger” shall refer herein to a person actually travelling by air. A
person who is named in the flight ticket shall be considered a passenger for the
purpose of these rules.
2.15 “Person with disability” or “PWD” includes those who have long-term
physical, mental, intellectual or sensory impairments, which, in interaction with
various barriers, may hinder their full and effective participation in society on
an equal basis with others.
2.16 “Sales Promotion” means techniques intended for broad consumer

participation which contain promises of gain, such as prizes, in cash or in kind,
as reward for the purchase of a product, security, service or winning in a
contest, game, tournament, and other similar competitions which involve
determination of winner/s and which utilize mass media and/or widespread
media of information. It also means techniques purely intended to increase the
sales, patronage and/or goodwill of a product.
2.17 “Senior citizen” refers to any resident citizen of the Philippines at least sixty
(60) years old. Passengers may be asked to present identification documents,
in line with Republic Act No. 9994, otherwise known as the Expanded Senior
Citizens Act of 2010, and its Implementing Rules and Regulations, in order to
avail of benefits and privileges reserved for senior citizens.
Section 3. Scope. This Regulation shall apply to all aspects of contracts of

carriage for flights or portions of a flight into, from, and within the territory of
the Philippines operated by Philippine air carriers, and flights or portions of a
flight from the territory of the Philippines operated by foreign air carriers.
Provided, that the compensation rules shall not apply to carriers flying into the
territory of the Philippines, if the laws of the country of origin provide similar or
higher compensation. Otherwise, these rules shall apply in full.
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CHAPTER II:
RIGHT TO BE PROVIDED WITH ACCURATE INFORMATION BEFORE
PURCHASE
Section 4. Right to Full, Fair, and Clear Disclosure of the Service Offered and All
the Terms and Conditions of the Contract of Carriage. Every passenger shall,
before purchasing any ticket for a contract of carriage by the air carrier or its
agents, be entitled to the full, fair, and clear disclosure of all the terms and
conditions of the contract of carriage about to be purchased. The disclosure
shall include, among others, documents required to be presented at check-in,
provisions on check-in deadlines, refund and rebooking policies, and
procedures and responsibility for delayed and/or cancelled flights. These terms
and conditions may include liability limitations, claim-filing deadlines, and other
crucial conditions.
4.1 An air carrier shall cause the disclosure under this Section to be printed on
or attached to the passenger ticket and/or boarding pass, or the incorporation
of such terms and conditions of carriage by reference. Incorporation by
reference means that the ticket and/or boarding pass shall clearly state that the
complete terms and conditions of carriage are available for perusal and/or
review on the air carrier’s website, or in some other document that may be sent
to or delivered by post or electronic mail to the passenger upon his/her request.
4.2 The air carrier must also ensure that passengers receive an explanation of
key terms identified on the ticket from any location where the carrier’s tickets
are sold, including travel agencies. In case of online bookings, the air carrier
must establish a system wherein the purchaser is fully apprised of the required
disclosures under this Section twice prior to the final submission of his/her
online offer to purchase.
4.3 Aside from the printing and/or publication of the above disclosures, the
same shall likewise be verbally explained to the passenger by the air carrier
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and/or its agent/s in English and Filipino, or in a language that is easily
understood by the purchaser, placing emphasis on the limitations and/or
restrictions attached to the ticket.
4.4 The key terms of a contract of carriage, which should include, among others,
the rebooking, refunding, baggage allowance and check-in policies, must be
provided to a passenger and shall substantially be stated in the following
manner and, if done in print, must be in bold letters:
(English)
“NOTICE:
The ticket that you are purchasing is subject to the following

conditions/restrictions:
1. _______________
2. _______________
3. _______________
Your purchase of this ticket becomes a binding contract on your part to follow
the terms and conditions of the ticket and of the flight. Depending on the fare
rules applicable to your ticket, non-use of the same may result in forfeiture of
the fare or may subject you to the payment of penalties and additional charges
if you wish to change or cancel your booking.
For more choices and/or control in your flight plans, please consider other fare
types.”
(Filipino)
“PAALALA:
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Ang tiket na ito ay binibili ninyo nang may mga kondisyon/ restriksyon:
1. ________________
2. ________________
3. ________________
Sa pagpili at pagbili ng tiket na ito, kayo ay sumasang-ayon sa mga kondisyon

at restriksyon na nakalakip dito, bilang kontrata ninyo sa air carrier. Depende sa
patakarang angkop sa iyong tiket, ang hindi paggamit nito ay maaaring
magresulta sa pagwawalang bisa sa inyong tiket o sa paniningil ng karagdagang
bayad kung nais ninyong baguhin o kanselahin ang inyong tiket.
Para sa mas maraming pagpipilian at malawak na control sa inyong flight,

inaanyayahan kayong bumili ng iba pang klase ng tiket galing sa air carrier.”
4.5 Any violation of the afore-stated provisions shall be a ground for the denial
of subsequent applications for approval of promotional fare, or for the
suspension or recall of the approval made on the advertised fare/rate.
Section 5. Right to Clear and Non-Misleading Advertisements of, and Important

Reminders Regarding Fares. Advertisements of fares shall be clear and not
misleading.
5.1 Major restrictions, such as those on rebookability or refundability, which

may be attached to certain fare types, shall be disclosed in full and in such a
way that the passenger may fully understand the consequences of purchasing
such tickets and the effect of non-use thereof.
5.2 Every air carrier causing the publication of fare advertisements in any
medium, shall likewise disclose the following:
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(a) Conditions and restrictions attached to the fare type;
(b) Refund and rebooking policies, if any;
(c) Baggage allowance policies;
(d) Government taxes and fuel surcharges;
(e) Other mandatory fees and charges;
(f) Contact details of the carrier (i.e. phone number, website, e-mail, etc.); and
(g) Other information necessary to apprise the passenger of the conditions and
the full/total price of the ticket purchased.
Provided, that, in case of promotional fares, the additional information shall be

included:
(h) Number of seats offered on a per sector basis;
(i) The duration of the promo; and
(j) The CAB Approval No. of Fares.
Provided, further, that, where there are differing conditions, such as fuel
surcharge in relation to the points of destinations or origin, the advertisements
of these carriers may provide only the range thereof and not the actual
surcharge of each route.
5.3 The above-mentioned required disclosures shall occupy not less than one-
third (1/3) of the advertising material. A copy of the same shall be printed on or
attached to the ticket in English and Filipino.
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In the case of broadcast media, it shall be enough that the air carrier and/or
advertising agent incorporate the foregoing terms and conditions by reference,
as provided for in Section 4.1.
Section 6. Right Against Misleading and Fraudulent Sales Promotion Practices.

Consistent with the declared policy of the State to protect the interests of the
consumers, which includes protection from misleading and fraudulent sales
promotion practices, all sales promotion campaigns and activities of air carriers
shall be carried out with honesty, transparency and fairness, and in accordance
with the requirements of the Consumer Act of the Philippines, and its
Implementing Rules and Regulations.
Air carriers shall provide to DTI a copy of its promotional materials for post audit
not later than the publication, release, or launch date whichever is earlier.
It is understood that professional authorities for those engaged in advertising,

sales and promotion may impose additional standards or measures to regulate
their industry.
CHAPTER III
RIGHT TO RECEIVE THE FULL VALUE OF THE SERVICE PURCHASED
Section 7. Right to Transportation and Baggage Conveyance. Every passenger
is entitled to transportation, baggage conveyance and ancillary services, in
accordance with the terms and conditions of contract of carriage with the air
carrier. Thus, any violation of the terms and conditions of the contract of
carriage due to the fault or negligence of the air carrier shall entitle the
passenger to compensation or alternative arrangements, as provided in this Air
Passenger Bill of Rights, which are acceptable to the passenger.
Section 8. Right to be Processed for Check-In. In accordance with the usual air
carrier procedures, a passenger holding a confirmed ticket, whether
promotional or regular, with complete documentary requirements, and who has
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complied with the check-in procedures, shall be processed accordingly at the
check-in counter within the check-in deadline. The airline shall, therefore, and
subject to infrastructure limitations, clearly designate the boundaries of its
assigned check-in area/s or counter/s.
A passenger within the air carrier’s cordoned or other designated check-in area
as herein defined at least one (1) hour before the published ETD shall not be
considered late or a no-show, and shall not be denied check-in. The carrier shall
exert utmost diligence in ensuring that passengers within the cordoned or other
designated check-in area and/or lined up at the check-in counters are checked
in for their flights before the check-in deadline.
A passenger who is late in accordance with the preceding paragraph may be

denied check-in and directed to a standby or rebooking counter, as the case
may be, for proper processing.
Any dispute under this Section shall be resolved by the air carrier on-site. For
this purpose, the air carrier must present to the passenger proof, including, but
not limited to, closed-circuit television monitor recordings, processing or
number slips issued at the entrance of the check-in area, and other applicable
or available means, that the latter failed to appear within the prescribed time for
the check-in procedure.
Section 9. Right to Sufficient Processing Time. Passengers shall be given

enough time before the published ETD within which to go through the check-in
and final security processes. For this purpose, air carriers operating in
international airports and in other airports designated by the DOTC shall open
their check-in counters in such airports at least two (2) hours before the ETD. In
other airports, air carriers shall open their check-in counters at least one (1)
hour before the ETD.
9.1 Air carriers operating in international airports and in other airports

designated by the DOTC shall open a separate dedicated counter for a flight
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nearing check-in deadline to facilitate the checking in of passengers at least one
(1) hour before the published ETD.
9.2 To ensure that PWDs and senior citizens shall have equal access to air
transportation services, air carriers shall at all times and in all instances adhere
to the mandate of Batas Pambansa Blg. 344, otherwise known as An Act to
Enhance the Mobility of Disabled Persons by Requiring Certain Buildings,
Institutions, Establishments and Public Utilities to Install Facilities and Other
Devices, the provisions of the Expanded Senior Citizens Act of 2010, and other
related laws. Accordingly, an air carrier shall designate at least one (1) check-in
counter which will prioritize PWDs, senior citizens, and persons requiring
special assistance or handling. If this is not practicable, the air carrier shall
instead provide for priority handling and processing of such passengers. The
air carrier shall likewise coordinate with the appropriate authorities for the use
of proper airport equipment, entryways, and/or aerobridges, as the case may be,
when the same are available, to facilitate transactions, movement, boarding,
and/or disembarkation of PWDs, senior citizens, and/or persons requiring
special equipment, at the airport.
Persons accompanying a PWD, a senior citizen, or a person requiring special

assistance or handling should also be accommodated at the designated check-
in counter mentioned in the preceding paragraph. It is the duty of an air carrier
or its authorized agent to inform its passengers if additional costs will be
incurred for the use of facilities designed for passengers needing special
assistance in airports located in other countries.
It is the responsibility of a PWD to declare his/her need for special assistance

or handling to the airline, upon booking his/her flight. If the PWD fails to do so,
the airline may not be held liable for any services it was not able to provide the
passenger and/or for any additional costs incurred for the use of special
assistance facilities.
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Section 10. Right to Board Aircraft for the Purpose of Flight. A passenger
checked in for a particular flight has the right to board the aircraft for the
purpose of flight, except when there is legal or other valid cause, such as, but
not limited to, immigration issues, safety and security, health concerns, non-
appearance at the boarding gate at the appointed boarding time, or government
requisition of space as provided for in Section 10.2. Other than these causes,
no passenger may be denied boarding without his/her consent.
10.1 While it is an accepted practice for an air carrier to overbook its flights, any
expense, consequence, or inconvenience caused to affected passengers must
be borne by the air carrier, as follows:
(a) The air carrier shall determine the number of passengers in excess of the
actual seat capacity of the aircraft.
(b) The air carrier shall announce that the flight is overbooked, and that it is
looking for volunteers willing to give up their seats in exchange for air carrier
compensation.
(c) The air carrier shall provide the interested passengers or volunteers a list of
amenities and offers, which they can choose from, which list of amenities shall
always include the option to be given priority booking in the next flight with
available space or to be endorsed to another air carrier upon payment of any
fare difference, and provided that space and other circumstances permit such
accommodation, at the option of the passenger, and/or a cash incentive.
(d) In case the number of volunteers is not enough to resolve the overbooking,
the air carrier shall increase the compensation package by certain degrees or
by adding more amenities/services until the required number of volunteers is
met.
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10.2 Government agencies and/or officials wanting to acquire aircraft space for
official government purposes shall submit a written request justifying the
requisition to the CAB, which shall then make the request to the air carrier
concerned, detailing:
(a) The number, identities, and affiliation of the persons requesting for space;
(b) The date and time (if applicable) of the flight; and
(c) The destination.
Should government requisition result in passengers having to forego their

confirmed space, the air carrier shall look for volunteers in accordance with
Section 10.1.
Provided, that the air carrier shall have the right to claim from the requesting
government entity the full-fare value of the seats requisitioned by the latter.
10.3 The settling of compensation for passengers pursuant to this Section shall
not be an excuse for the undue delay of the flight’s ETD.
CHAPTER IV
RIGHT TO COMPENSATION
Section 11. Right to Compensation and Amenities in Case of Cancellation of

Flight. In case of cancellation of flights, the following shall be observed:
11.1 In case of flight cancellation attributable to the carrier, a passenger shall

have the right to:
(a) Be notified beforehand via public announcement, written/published notice

and flight status update service (text);
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(b) Be provided with the following, if he/she is already at the airport at the time
of the announcement of the flight cancellation: sufficient refreshments or meals
(e.g. snacks consisting of at least a bottle of water and a sandwich, or breakfast,
lunch, or dinner, or a voucher for the same, as the case may be); hotel
accommodation (conveniently accessible from the airport); transportation from
the airport to the hotel, v.v.; free phone calls, text or e-mails, and first aid, if
necessary; and
(c) Reimbursement of the value of the fare, including taxes and surcharges, of
the sector cancelled, or both/all sectors, in case the passenger decides not to
fly the ticket or all the routes/sectors; or
(d) Be endorsed to another air carrier without paying any fare difference, at the
option of the passenger, and provided that space and other circumstances
permit such re-accommodation; or
(e) Rebook the ticket, without additional charge, to the next flight with available
space, or, within thirty (30) days, to a future trip within the period of validity of
the ticket. However, for rebooking made in excess of the aforementioned thirty
(30) days for a trip likewise within the validity of the ticket, fees and/or fare
difference shall apply.
Provided, that in case a carrier cancels a flight at least twenty-four (24) hours
before the ETD, it shall not be liable for the foregoing amenities, except, it shall
be obliged to notify the passenger, and, in accordance with the preceding
provisions, to rebook or reimburse the passenger, at the option of the latter.
11.2 In case the air carrier cancels the flight because of force majeure, safety
and/or security reasons, as certified by the Civil Aviation Authority of the
Philippines, a passenger shall have the right to be reimbursed for the full value
of the fare.
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11.3 The provisions of this Section shall be the minimum entitlement of a
passenger in case of cancellation, and shall not prohibit the air carrier from
granting more favourable conditions or recourses, as it may deem appropriate.
Section 12. Right to Compensation and Amenities in Case of Flight Delay and
Exceptions Thereto.
12.1 In case of Terminal Delay of at least three (3) hours after the ETD, whether
or not such is attributable to the carrier, a passenger shall have the right to:
(a) Be provided with refreshments or meals (sufficient snacks, breakfast, lunch,

or dinner, as the case may be), free phone calls, text or e-mails, and first aid, if
necessary; and
(b) Rebook or refund his/her ticket in accordance with the preceding Section or
be endorsed to another carrier, in accordance with the preceding Section.
12.2 In case such Terminal Delay extends to at least six (6) hours after the ETD
for causes attributable to the carrier, it shall be deemed cancelled for the
purpose of making available to the passenger the rights and amenities required
to be provided in case of actual cancellation, as provided for in Section 11.1;
and in addition, an affected passenger shall be given the following:
(a) Additional compensation equivalent to at least the value of the sector

delayed or deemed cancelled to be paid in the form of cash or voucher, at the
discretion of the air carrier; and
(b) The right to board the flight if it takes place more than six (6) hours after the
ETD and the affected passenger has not opted to rebook and/or refund. For this
purpose, the air carrier is obliged to exert all efforts to contact the passenger
for the flight.
135
12.3 A passenger shall likewise have the right to be provided with sufficient food
and beverage, in cases of Tarmac Delay of at least two (2) hours after the ETD,
reckoned from the closing of the aircraft doors, or when the aircraft is at the
gate with the doors still open but passengers are not allowed to deplane.
12.4 The provisions of this Section shall be the minimum entitlement of a

passenger in case of delay and shall not prohibit the air carrier from granting
more favourable conditions or recourses, as it may deem appropriate.
Section 13. Compensation under Section 10 as Liquidated Damages. The

compensation provided in Section 10, if accepted by the passenger, shall
constitute liquidated damages for all damages incurred by the passenger as a
result of the air carrier’s failure to provide the passenger with a confirmed
reserved seat.
Provided that, while a confirmed reservation is necessary to make a passenger

eligible for compensation, a written confirmation issued by the air carrier or its
authorized agent qualifies the passenger in this regard, even if the air carrier
cannot find the reservation in the electronic records, as long as the passenger
did not cancel the reservation or miss a reconfirmation deadline.
Section 14. Right to Compensation for Delayed, Lost, and Damaged Baggage. A
passenger shall have the right to have his/her baggage carried on the same
flight that such passenger takes, subject to considerations of safety, security,
or any other legal and valid cause.
14.1 In case a checked-in baggage has been off-loaded for operational, safety,
or security reasons, the air carrier shall inform the passenger at the soonest
practicable time and in such manner that the passenger will readily know of the
off-loading (i.e. that his/her baggage has been off-loaded and the reason
therefor). If the passenger’s baggage has been off-loaded, the air carrier should
136
make the appropriate report and give the passenger a copy thereof, even if it
had already announced that the baggage would be on the next flight.
The air carrier shall carry the off-loaded baggage in the next flight with available
space, and deliver the same to the passenger either personally or at his/her
residence. For every twenty-four (24) hours of delay in such delivery, the air
carrier shall tender an amount of Two Thousand Pesos (Php2,000.00) to the
passenger, as compensation for the inconvenience the latter experienced. A
fraction of a day shall be considered as one day for purposes of calculating the
compensation.
For the purposes of this section, the twenty four (24)-hour period shall
commence one (1) hour from the arrival of the flight of the passenger carrying
such baggage.
14.2 Should such baggage, whether carried on the same or a later flight, be lost
or suffer any damage attributable to the air carrier, the passenger shall be
compensated in the following manner:
(a) For international flights, the relevant convention shall apply.
(b) For domestic flights, upon proof, a maximum amount equivalent to half of
the amount in the relevant convention (for international flights) in its Peso
equivalent.
14.3 For compensation purposes, a passenger’s baggage is presumed to have

been permanently and totally lost, if within a period of seven (7) days, counted
from the time the passenger or consignee should have received the same, the
baggage is not delivered to said passenger or consignee.
Section 15. Right to Compensation In Case of Death or Bodily Injury of a

Passenger. For international flights, in case of death or bodily injury sustained
137
by a passenger, the relevant Convention and inter-carrier agreement shall apply.
However, for an international carriage performed under the 1966 Montreal Inter-
Carrier Agreement, which includes a point in the United States of America as a
point of origin, a point of destination or agreed stopping place, the limit of
liability for each passenger for death, wounding or other bodily injury shall be
the sum of Seventy-Five Thousand United States Dollars (US$75,000.00),
inclusive of legal fees and costs. Provided, in the case of a claim brought in a
state where a provision is made for a separate award for legal fees and costs,
the limit shall be the sum of Fifty-Eight Thousand United States Dollars
(US$58,000.00), exclusive of legal fees and costs.
For domestic flights, the compensation shall be based on the stipulated amount
in the relevant convention which governs international flights, the same to be
given in Peso denominations.
Section 16. Right to Immediate Payment of Compensation. An air carrier liable

for any and all compensations provided by these rules shall make the same
available to the affected passenger at the air carrier’s counters at the airport on
the date when the occasion entitling the passenger to compensation occurred,
or at the main office or any branch of the air carrier at the discretion of the
passenger. The air carrier shall tender a check for the amount specified, or cash,
or the document necessary to claim the compensation or benefits mentioned
above; Provided, that such document shall be convertible to cash within fifteen
(15) days from the date when the occasion entitling the passenger to such
compensation occurred.
CHAPTER V
ADMINISTRATIVE MATTERS
Section 17. Air Carrier and CAB Complaint and Assistance Desks. Air carriers
shall provide Customer Service Representatives who can address common
problems, such as arranging for meals and hotel rooms for stranded
138
passengers, settling denied boarding compensation, arranging luggage
resolutions, and settling other routine claims or complaints, on the spot. In
addition, the CAB may provide Complaints and Assistance Desks in all airports.
These shall be manned by CAB or CAB-deputized personnel, who shall assist
passengers whose rights to the service have not been fully satisfied by the air
carrier. The said personnel shall assist in the filing and prosecution of the
complaints of passengers whose rights have been violated and who wish to go
after the concerned air carriers.
Section 18. Refund of Other Fees. Every air carrier must refund checked
baggage fees and other optional service fees (i.e. insurance, donation to WWF,
seat selector fee, etc.), if the passenger did not use his/her ticket provided, that
the said ticket is refundable and that the passenger is not at fault. Provided,
further, that refund of checked baggage fees will also apply, if the baggage was
not delivered to the passenger within twenty-four (24) hours from the arrival of
flight, on top of the compensation fee as mentioned in Section 14.1.
Section 19. Written Reports. Air carriers shall submit a monthly report to the
CAB on the following:
(a) The number of regular and promotional fare passengers who have been
denied boarding, or whose flights were delayed or cancelled;
(b) The number of regular and promotional fare passengers whose baggage was
lost, damaged, or off-loaded; and
(c) The number of regular and promotional fare passengers who died or
sustained an injury during the course of the flight or performance of the contract
of carriage, as well as the reasons and other circumstances of such
occurrences.
139
Provided, that the air carriers shall maintain a database containing the names,
addresses, and/or other particulars of such passengers, their flights, concerns
or complaints, as well as records of the air carrier’s personnel regarding the
same, if any, and other pertinent information, available to the CAB upon request.
CHAPTER VI
FINAL PROVISIONS
Section 20. Periodic review. This Order shall be reviewed periodically by an

inter-agency body consisting of representatives from the DOTC, the DTI, the
CAB, and airport operators, in consultation with the air carrier companies and/or
other directly affected stakeholders. Such review may include the assessment,
modification, removal, and/or update of provisions in accordance with issues
arising from the implementation of this Order.
Section 21. Separability Clause. If any section(s) or any part of this Regulation
is declared unconstitutional by a competent authority, the remaining sections
or parts thereof shall not be affected thereby.
Section 22. Repealing Clause. All other orders, guidelines, economic

regulations, and other issuances of the CAB, the DTI and the DOTC, which are
inconsistent with these provisions, are hereby amended, repealed or modified
accordingly. Otherwise, provisions not deemed inconsistent shall be of
suppletory application.
Section 23. Violations and Penalties. All violations of this Joint Administrative
Order shall be penalized in accordance with the pertinent provisions of the Civil
Aeronautics Act of the Philippines, save for violations pertaining to Sections 5
and 6 which are governed by the relevant provisions of the Consumer Act of the
Philippines, the implementing agency of which is DTI.
140
Section 24. Effectivity. This Regulation shall take effect ten (10) days after its
publication in a newspaper of general application. A copy of this Regulation
shall be deposited with the University of the Philippines Law Center in
compliance with Revised Administrative Code.
APPROVED, 10 December 2012.
(Sgd.) JOSEPH EMILIO AGUINALDO ABAYA

Secretary
Department of Transportation and
Communications
(Sgd.) GREGORY L. DOMINGO

Secretary
Department of Trade and Industry
141

Transportation Law (Course Outline)

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Transportation Law (Course Outline)

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TRANSPORTATION LAW

d. Where does the Power to Regulate Public Utilities Reside?

Relate to Public Service Act 13(a)

e. What happened to the Public Service Commission?

f. Not a Public Utility

(d) Radio companies except with respect to the fixing of rates;

(e) Public services owned or operated by any instrumentality of the National

II. Constitutional Provisions

SEC MC No. 8-2013 (Guidelines on Compliance with Filipino-Foreign Ownership

Relate to Public Service Act Sec 16(a) and Sec 20(i)

(a) To issue certificates which shall be known as certificates of public

III. Regulation of Public Utilities

(a) To issue certificates which shall be known as certificates of public

Section 18. It shall be unlawful for any individual, co-partnership, association,

iii. CPC vs. CPCN

See Public Service Act, Section 15

The foregoing is likewise applicable to any extension or amendment of certificates

ii. Provincial Rates

iv. Vis-à-vis Power to Grant Authority

Public Service Act. Section 20(g), (h), and (i)

e. Power to set fees and other charges

f. Other means of regulation

See Public Service Act, Section 16 and 20

(a) To issue certificates which shall be known as certificates of public

(b) To approve, subject to constitutional limitations any franchise or privilege

(d) To fix just and reasonable standards, classifications, regulations, practices,

(f) To establish reasonable rules, regulations, instructions, specifications, and

(j) To authorize, in its discret

(b) To establish, construct, maintain, or operate new units or extend existing

(e) Hereafter to issue any stock or stock certificates representing an increase

(g) To sell, alienate, mortgage, encumber or lease its property, franchises,

(k) Adopt, maintain, or apply practices or measures, rules or regulations to

g. Due Process requirements

PART TWO: TRANSPORTATION LAW

g. Private nature; rights and obligations of parties inter se arising

II. Regulation of the Transportation Industry

Executive Order No. 292 [BOOK IV/Title XV/Chapter 1-General Provisions]

Signed on July 25, 1987

Transportation and Communications

SECTION 1. Declaration of Policy.—The State is committed to the maintenance and

SECTION 2. Mandate.—The Department of Transportation and Communications shall

SECTION 3. Powers and Functions.—To accomplish its mandate, the Department

(2) Establish and administer comprehensive and integrated programs for

(3) Assess, review and provide direction to transportation and communications

(8) Accredit foreign aircraft manufacturers or international organizations for aircraft

SECTION 4. Organizational Structure.—The Department shall consist of the

AN ACT CREATING THE CIVIL AVIATION AUTHORITY OF THE PHILIPPINES,

SEC. 4. Creation of the Authority. - There is hereby created an independent

(a) Establishment of Authority Headed by a Director General - The Authority shall

(b) The encouragement and development of an air transportation system

(c) The regulation of air transportation in such manner as to support sound

(e) The encouragement and development of a viable and globally competitive

(d) Determine the organizational structure of the Authority in accordance with

(g) Use available services, equipment, personnel and facilities of other

(j) Promulgate rules and regulations as may be necessary in the interest of

(m) Adopt a system for the registration of aircraft as hereinafter provided;

(p) Exercise the corporate powers granted to the Authority;

(s) In coordination with the appropriate government agency tasked to provide

(3) To the extent practicable, require uniform procedures for the

(h) To issue certificates of persons or civil aviation schools giving instruction in

(l) To plan, design, acquire, establish, construct, operate, improve, maintain,

(n) To impose fines and/or civil penalties in respect thereto;

(t) To grant authorization to civil aircraft or persons to carry instruments or