DEREGULATING DOMESTIC SHIPPING RATES

WHEREAS, Executive Order No. 185 was issued on 28 June 1994, opening the
domestic water transport industry to new Operators and investors and minimizing
government intervention and control over the domestic shipping industry to
attract more investments under an environment of free-market competition;

WHEREAS, Executive Order No. 185 liberalizes only the entry of vessels into
liner routes but has not covered the deregulation of domestic shipping rates;

WHEREAS, there is an imperative need to deregulate domestic shipping rates
by the government which prescribes such rates based on an outdated commodity
classification by then Public Service Commission which is considered obsolete
and unrealistic;

WHEREAS, the supply and demand in the domestic shipping industry would
determine the rates of shipping services provided/availed of, as now widely
practiced internationally;

NOW, THEREFORE, I, FIDEL
V. RAMOS, President of the Philippines by
virtue of the powers vested in me by law, do hereby order:

SECTION 1. DEREGULATION OF PASSAGE RATES. – Passage rates are hereby deregulated as follows:

First and Second Class. – Passenger rates for First Class
and Second Class rates are hereby deregulated for all passenger-carrying
domestic vessels; Provided, That such accommodation is
in accordance with the service standards prescribed by the Maritime Industry
Authority (MARINA); Provided, Further,
That, at least fifty per centum (50%) of the authorized passenger capacity of
the vessel shall be allocated and reserved for Third Class accommodation, whose
rates shall be regulated by the MARINA.

Tourism-Oriented
Vessels. – For vessels catering to tourism as duly certified by the
Department of Tourism (DOT), or passenger vessels of any type/size serving
DOT-identified tourist priority links/areas, they shall be exempted from the
requirement of allocating 50% of their total passenger capacity for Third Class
accommodation, and accordingly, their passage rates are hereby deregulated,
unless the operators opt to have their rates rationalized/prescribed by the
MARINA.

Vessels Not Covered
Above. – In cases where only First and Second Class passenger
accommodations are provided by a vessel under the MARINA-prescribed service
standards, or where Third Class passenger accommodations provided by a vessel
is less than 50% of the vessel’s total passenger capacity, the Second Class
passenger rates shall be regulated in accordance with the prescribed rates as
determined by the MARINA.

SEC. 2. DEREGULATION OF CARGO SHIPPING OR FREIGHT RATES.

The freight rates for all
commodities now classified as Class “A” and “B” and “C” are hereby deregulated,
except for non-containerized basic commodities the freight rates of which shall
continue to be regulated, with the MARINA prescribing the indicative/reference
rates thereto; Provided, that the Government hereby reserves its right
to intervene in cases of unreasonably high rates, especially with respect to
basic commodities.

In cases, however, where a
route/link is still monopolized or cartelized as determined by the MARINA, the
freight rates to be charged therein shall remain regulated until such time that
a new operator is authorized to operate in such route/link to provide
cost-effective/competitive shipping service, as defined by the MARINA.

SEC. 3. IMPLEMENTING GUIDELINES.

The MARINA, in coordination with
the Philippine Shipper’s Bureau of the Department of Trade and Industry, is
hereby directed to undertake the needed activities and issue the pertinent
rules and regulations for the effective implementation of this Executive Order.
The implementing guidelines shall include sanctions on ship owners who will
refuse cargo, especially basic commodities, without just and reasonable cause.

All government departments,
offices, agencies, or instrumentalities, including government-owned and
-controlled corporations, are hereby ordered to assist, coordinate, and
cooperate with the MARINA in the implementation of this Order.

SEC. 4. REPEALING CLAUSE. – This Order repeals or amends all executive, departments and other
agency issuances, or any provision thereof inconsistent with this Order.

SEC. 5. EFFECTIVITY. This Executive Order shall take the effect fifteen (15) days after
its publication once in a newspaper of general circulation.

DONE in the City of Manila, this 28th day of November, in the year
of Our Lord, Nineteen Hundred and Ninety-Four.

(Sgd.) FIDEL
V. RAMOS
President of the Philippines

By the President:

(Sgd.) TEOFISTO T. GUINGONA, JR.
Executive Secretary

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