POLICY GUIDELINES FOR THE DEVELOPMENT OF INTER-ISLAND SHIPPING
Policy Guidelines designed to serve and support specific objectives of
the Maritime Industry Authority towards the development of inter-island
shipping.
1. Objective: To ensure that the interisland
shipping development program is formulated and implemented in accordance
with the over-all development priorities set by the government.Policy Statement: The inter-island shipping development program
shall be dovetailed with national economic development priorities, which
program should stress the following:a. The industry should be made an effective development agent
particularly in such priority areas as industry dispersal, creation, and
development of marketing channels, labor absorption and employment
generation, technology transfer, and social services.b. The industry should, relative to other transport modes,
provide efficient, reliable, and safe transportation for passenger and
cargoes.c. The industry development program should maximize vertical
and horizontal linkages with other industry groups particularly
commercial, agricultural, and industrial enterprises and the
shipbuilding/repair industry and related industries.2. Objective: To encourage and protect private
investment and to prevent cutthroat competition especially in investment
areas deemed already overcrowded or where the existing or potential
market is thin.Policy Statement: The Government shall protect
already established shipping companies providing adequate shipping
services from undue competition from new entrants. For this purpose, no
new shipping companies shall be allowed to enter the liner trade in the
primary and secondary routes and only one shipping company shall be
allowed to operate (unless more than one is already operating, in which
case the government shall promote and/or encourage mergers or joint
services) in a tertiary or development route. In significant routes
where no substantial competition exists, the government shall impose
strict measures to upgrade operating and service standards, and whenever
market conditions allow, encourage the entry of a competing operator to
help upgrade operating standards.3. Objective: To accelerate fleet modernization and balance the allocation of shipping services.
Policy Statement: The Government shall induce investment in the following pioneer areas:
a. Use of modern, specialized vessels such as container and RO-RO ships.
b. Shipping services in routes considered developmental.
The following incentives shall be granted to operators in the above pioneer areas:
a. Preferential treatment already existing under PUPP.
b. Preferential treatment in government ship financing program
through granting of priority in allocation of loan funds, premium rates
for government lending, and guarantee operations.c. In case of operators in developmental routes, the
application of higher freight/fare schedule based on past and projected
load factors and operating conditions.4. Objective: To effect an over-all maritime
industry development program that balances the short-run and long-run
requirements of inter-island shipping with the need to develop a local
shipbuilding industry that is intended to eventually become the
exclusive (or at least principal) source of inter-island passenger and
cargo ships.Policy Statement: Recognizing that the
developmental implications of inter-island shipping on the national
economy are more pronounced than those of the shipbuilding industry, the
government shall give priority to the immediate fleet development and
acquisition requirements of inter-island shipping while at the same time
meeting the long-run objective of establishing self-reliance in the
supply of inter-island ship types. In achieving the desired balance
approach, the interests of the inter-island shipping industry and the
end users shall not be unduly jeopardized in the equally vital need to
support, on a phased basis, the domestic shipbuilding industry.5. Objective: To ensure the technical and
commercial viability of the inter-island shipping industry and the
individual shipping companies comprising the industry.Policy Statement: Only shipping projects, whether
involving the establishment of new shipping companies or acquisition of
ships, deemed technically and commercially viable and which shall
enhance the over-all viability of the shipping industry shall be
allowed, except that unprofitable operations in development routes may
be assigned to operators in primary and secondary routes as a condition
for maintenance or increase of sailing frequencies and/or in the
expectation of viability in the long run. Commercial viability shall be
determined on the basis of technical, market, financial and economic
considerations.6. Objectives: To ensure that the government’s
direct participation in the inter-island shipping business shall not,
unless if so required by national exigency, jeopardize the over-all
viability of the industry.Policy Statement: The participation of the
government, including its agents, in the business of inter-island cargo
shipping shall be limited to the following:a. Cases involving national security or national economic contingency.
b. As an integral part of the operations of a government owned or controlled corporation.
c. Carriage of government owned cargoes.
d. In areas inadequately serviced by the private sector
because of low profitability, high risks, or large capital requirements.7. Objective: To accelerate the modernization of the inter-island fleet and upgrade the quality of inter-island shipping services.
Policy Statement: Only those ships meeting the
physical and service standards set by the government shall be allowed to
operate in the inter-island trade. For this purpose, the government
shall implement a continuing fleet modernization and rehabilitation
program which shall include classification requirement and an incentives
system for ship replacement/phase out.
For your information and guidance.
Adopted: 18 Sept. 1978
(SGD.) GENEROSO F. TANSECO
Administrator