For the attainment of these objectives, the

Government through the Maritime Industry

PRESIDENTIAL DECREE No. 474 Authority hereinafter created shall:

PROVIDING FOR THE REORGANIZATION (a) Adopt and implement a practicable and
OF MARITIME FUNCTIONS IN THE coordinated Maritime Industry Development
PHILIPPINES, CREATING THE MARITIME Program which shall include, among others, the
INDUSTRY AUTHORITY, AND FOR OTHER early replacement of obsolescent and uneconomic
PURPOSES. vessels; modernization and expansion of the
Philippine merchant fleet, enhancement of domestic
WHEREAS, the efficient sea transport of raw capability for shipbuilding, repair and maintenance;
materials, products, commodities and people is vital and the development of reservoir of trained
to the growth of the Philippine economy; manpower;

WHEREAS, the functions pertaining to the (b) Provide and help provide the necessary; (i)
development and regulation of shipping enterprises financial assistance to the industry through public
are fragmented among various government and private financing institutions and
agencies, resulting in inadequate and inefficient instrumentalities; (ii) technological assistance; and
shipping facilities, dependence on external shipping (iii) in general, a favorable climate for expansion of
interests, maldistribution of commodities, and domestic and foreign investments in shipping
piece-meal solutions; enterprises; and

WHEREAS, there is imperative need to modernize (c) Provide for the effective supervision, regulation
and expand the Philippine merchant fleet, and to and rationalization of the organizational
rationalize and improve their operations in order to management, ownership and operations of all water
make them effective instruments in promoting transport utilities, and other maritime enterprises.
domestic production, interisland and overseas trade,
price stabilization, and employment generation; Section 3. Definition of Terms. The terms, as used,
in this Decree, shall have the following meaning,
WHEREAS, it is urgently necessary to provide a unless the context of the particular usage of the term
strong organizational framework to effect the indicates otherwise;
accelerated and integrated development and
effective regulation of shipping enterprises; a. “Maritime Industry”, briefly referred to as
“industry” in the broadest concept of the term. All
NOW, THEREFORE, I, FERDINAND E. enterprises engaged in the business of designing,
MARCOS, President of the Philippines, by virtue of constructing, manufacturing, acquiring, operating,
the powers vested in me by the Constitution, in supplying, repairing and/or maintaining vessels, or
order to effect the desired changes and reforms in component parts thereof; of managing and/or
the social, economic and political structure of our operating shipping lines, stevedoring arrastre and
society, do hereby decree and order that the customs brokerage services, shipyards, drydocks,
following be adopted and made part of the laws of marine railways, marine repair shops, shipping and
the land: freight forwarding agencies and similar enterprises.

Section 1. Title.  This Decree shall be known as the b. “Vessels” or “Watercraft” Any barge, lighter,
Maritime Industry Decree of 1974. bulk carrier, passenger ship freighter, tanker,
container ship, fishing boats or other artificial
Section 2. Declaration of Policies and contrivance utilizing any source of motive power,
Objectives. It is hereby declared the policy of the designed, used or capable of being used as a means
State to accelerate the integrated development of the of water transportation operating either as
maritime industry of the Philippines to attain the common contract carrier, including fishing
following objectives: (a) To increase production and vessels covered under Presidential Decree No. 43,
productivity in the various islands and regions of except (1) those owned and/or operated by the
the archipelago through the provision of effective Armed Forces of the Philippines and by foreign
sea linkage; (b) To provide for the economical, safe, governments for military purposes, and (ii) bancas,
adequate and efficient shipment of raw materials, sailboats and other waterborne contrivance of less
products, commodities and people; (c) To enhance than three gross tons capacity and NOT
the competitive position of Philippine flag vessels in MOTORIZED.
the carriage of foreign trade; (d) To strengthen the
balance of payments position by minimizing the c. “Philippine national” A citizen of the Philippines;
outflow of foreign exchange and increasing dollar or a partnership or association wholly owned by and
earnings; (e) To generate new and more job composed of citizens of the Philippines; or a
opportunities. corporation organized under the laws of the
Philippines of which at least sixty per cent of the agencies. No government body or instrumentality
capital stock outstanding and entitled to vote is shall adopt any policy or take course of action
owned and held by Philippine citizens; or a trustee contrary to or inconsistent with the Program.
of funds for pensions or other employee retirement
or separation benefits, where the trustee is a B. MARITIME INDUSTRY BOARD
Philippine national and at least sixty per cent of the
funds will accrues to the benefit of the Philippine Section 6. Powers and Function of the Board.  The
nationals: Provided, That where a corporation and Maritime Industry Board shall have the following
its non-Filipino stockholders own stock in an powers, functions, and duties, among others:
enterprise, at least sixty percent of the members of
the governing board of both corporations must be a. To provide comprehensive policy guidance for
Philippine nationals. the promotion and development of the maritime
industry as provided for in this, Decree;
d. “Philippine flag vessel” A vessel or watercraft
registered under Philippine laws. b. To promulgate and prescribe such promotional
and developmental rules and regulations, standards,
e. “Foreign flag vessel” A vessel or watercraft guidelines and procedures and recommend laws or
registered under the laws of a country other than the measures as may be necessary for the growth and
Philippines. effective regulation of shipping enterprises;

f. “Philippines shipping companies” Philippine c. To formulate a comprehensive and practicable

nationals registered and licensed under the laws of Maritime Industry Development Program for a ten-
the Philippines to engage in the business of overseas year period and review and update the same
and/or domestic water transportation. annually;

A. MARITIME INDUSTRY AUTHORITY d. To prescribe specific policies in the

determination of just and reasonable passenger
Section 4. Maritime Industry Authority, Creation fares, freight rates and other charges relative to the
and Organization. There is hereby created a operation of inter-island vessels. Accordingly, the
Maritime Industry Authority, hereinafter referred to Board of Transportation shall exercise its rate fixing
as the “Authority”, under the Office of the functions in accordance with such policies;
President. It shall be composed of a governing
board of directors to be known as Maritime Industry e. To recommend to the President that the State,
Board and the Management. through such agency or agencies as the President
may designate, purchase, lease, manage, operate or
The Authority shall have general jurisdiction and requisition any vessel, ship or shipping enterprise,
control over all persons, corporations, firms or for national security purposes, to meet emergency
entities in the maritime industry of the Philippines situations or when the national interest so requires;
and shall supervise, regulate in accordance with this
Decree. f. To approve contracts;

The principal office of the Authority shall be in the g. To approve the organizational structure, staffing
Greater Manila Area Regional or branch offices pattern, and budget of the Authority upon the
may be established at such other place or places recommendation of the Administrator;
within the Philippines as may be deemed necessary
by the Board. h. To appoint, discipline and remove, and determine
the composition of the Authority technical staff and
Section 5. Maritime Industry Development other personnel: Provided, That all regular
Program. The Authority shall prepare and annually professional and technical personnel in the
update a Ten-Year Maritime Industry Development Authority shall be permanent and career in status,
Program, hereinafter referred to as “Program” but exempt from WAPCO and Civil Service rules
which shall contain a rational and integrated and regulations: Provided, further, That the
development of the maritime industry. The personnel shall be entitled to the benefits normally
Authority shall submit the same for approval by the accorded to government employees, such as
President of the Philippines. retirement, GSIS insurance, leave and similar
matters: Provided, furthermore, That appointments
Upon approval of the Program by the President, all of personnel in the management below the rank of
government departments, bureaus, agencies and section chief shall be made by the Administrator, in
instrumentalities shall implement the same within accordance with the approved budget and staffing
their respective jurisdictions. The Authority shall pattern and shall be noted by the Board: Provided,
ensure that the approved program is being finally, That the Board or the Administrator may
effectively implemented by the participating engage on contractual basis or other arrangements
for the temporary services, and fix the Section 9. The Maritime Administrator and Deputy
compensation of highly qualified professionals, Administrator. The Maritime Administrator and
expert technical advisers or consulting firms; Deputy Administrators shall be appointed by the
President for a term of six years: Provided, That
i. To adopt a common seal for the Authority which upon the expiration of their respective terms, they
shall be juridically noticed, determine the exact shall continue to serve until their successor shall
location of its office and prescribe the rules and have been appointed and qualified: Provided,
regulations to govern its proceedings; further, That no vacancy shall be filled except for
the unexpired portion of the term: Provided, finally,
j. To recommend to the President, through the That the President may remove the Administrator
National Economic and Development Authority, the and Deputy Administrators from office for cause
grant of necessary incentives for the development of upon recommendation of the Board.
shipping and other related maritime enterprises; and
The Maritime Administrator and Deputy
k. To perform such acts as are proper and necessary Administrators shall be citizens of the Philippines,
to implement this Decree. at least thirty-five years old on the date of their
appointment, of good moral character, or
Section 7. Composition and Organization. The recognized executive ability and competence in
Board shall be composed of eight members as previous public or private employment, with
follows: The Secretary of Trade, the Secretary of adequate training and experience in economics,
Public Works, Transportation and Communications, technology, finance, law, management, public
the Secretary of National Defense, the Executive utility, or in other phases or aspects of the maritime
Secretary, the Chairman of the Board of industry receive an annual salary of fifty thousand
Investments, the Chairman of the Development pesos and a monthly commutable allowance of two
Bank of the Philippines, the Chairman of the Board thousand pesos. Each Deputy Administrator shall
of Transportation and the Maritime Administrator. receive an annual salary of forty thousand pesos and
The Chairman of the Board shall be appointed by a monthly allowance of one thousand five hundred
the President of the Philippines from among its pesos.
members.
The Administrator shall be directly responsible to
The officials next in rank to the regular members the Board, and shall have powers, functions and
shall serve as permanent alternate members, except duties as provided in this Decree. The Deputy
that, in the absence of the Chairman, the Board shall Administrator shall be directly responsible to the
elect a temporary presiding officer. The alternate Administrator, and their respective powers,
members shall attend meetings of the Board and functions and duties shall be determined by the
committees assigned to their principals and receive Board, upon recommendation of the Administrator.
the corresponding per diems whenever their
principal is absent or the said position is vacant. Section 10. Authority to Administer Oath.  The
Chairman of the Board, the Administrator, the
The Board shall meet regularly once a month and Deputy Administrators, the Chief Legal Officer and
may hold special meetings to consider urgent heads of divisions of the Authority shall have the
matters upon call of the Chairman or any three power to administer oaths for the transaction of
members thereof. A majority shall constitute a official business.
quorum for the transaction of business.
Section 11. General Powers and Functions of the
Each member shall receive a monthly commutable Administrator. Subject to the general supervision
allowance of five hundred pesos and per diem of and control of the Board, the Administrators shall
one hundred for every meeting of the Board or have the following general powers, functions and
committee thereof actually attended: Provided, That duties;
the total amount of per diems which each may
receive shall not exceed five hundred pesos a a. To implement, enforce and apply the policies,
month. programs, standards, guidelines, procedures,
decisions and rules and regulations issued,
C. MANAGEMENT prescribed or adopted by the Board pursuant to this
Decree;
Section 8. Management Head.  The management of
the Authority shall be vested in the Maritime b. To undertake researches, studies, investigations
Administrator who shall be directly assisted by the and other activities and projects, on his own
Deputy Administrator for planning and a Deputy initiative or upon instructions of the Board, and to
Administrator for Operations hereinafter referred to submit comprehensive reports and appropriate
as “Deputy Administrator.” recommendations to the Board for its information
and action;
c. To undertake studies to determine present and accidents which shall be undertaken by the
future requirements for port development including Philippine Coast Guard;
navigational aids, and improvement of waterways
and navigable waters in consultation with f. Impose, fix, collect and receive in accordance
appropriate agencies; with the schedules approved by the Board, from any
shipping enterprise or other persons concerned, such
d. To pursue continuing research and developmental fees and other charges for the payment of its
programs on expansion and modernization of the services;
merchant fleet and supporting facilities taking into
consideration the needs of the domestic trade and g. Inspect, at least annually, the facilities of port and
the need of regional economic cooperation schemes; cargo operators and recommend measures for
and adherence to prescribed standards of safety, quality
and operations;
e. To manage the affairs of the Authority subject to
the provisions of this Decree and applicable laws, h. Approve the sale, lease or transfer of
orders, rules and regulations of other appropriate management of vessels owned by Philippine
government entities. Nationals to foreign owned or controlled
enterprises;
Section 12. Specific Powers and Functions of the
Administrator. In addition to his general powers i. Prescribe and enforce rules and regulations for the
and functions, the Administrator shall; prevention of marine pollution in bays, harbors and
other navigable waters of thePhilippines, in
a. Issue Certificate of Philippine Registry for all coordination with the government authorities
vessels being used in Philippine waters, including concerned;
fishing vessels covered by Presidential Decree No.
43 except transient civilian vessels of foreign j. Establish and maintain, in coordination with the
registry, vessels owned and/or operated by the appropriate government offices and agencies, a
Armed Forces of the Philippines or by foreign system of regularly and promptly producing,
governments for military purposes, and bancas, collating, analyzing and disseminating traffic flows,
sailboats and other watercraft which are not port operations, marine insurance services and other
motorized, of less than three gross tons; information on maritime matters;

b. Provide a system of assisting various officers, k. Recommend such measures as may be necessary
professionals, technicians, skilled workers and for the regulation of the importation into and
seamen to be gainfully employed in shipping exportation from the Philippines of vessels, their
enterprises, priority being given to domestic needs; equipment and spare parts;

c. In collaboration and coordination with the l. Implement the rules and regulations issued by the
Department of Labor, to look into, and promote Board of Transportation;
improvements in the working conditions and terms
of employment of the officers and crew of vessels m. Compile and codify all maritime laws, orders,
of Philippine registry, and of such officers and crew rules and regulations, decisions in leasing cases of
members who are Philippine citizens and employed courts and the Authority’s procedures and other
by foreign flag vessels, as well as of personnel of requirements relative to shipping and other shipping
other shipping enterprises, and to assist in the enterprises, make them available to the public, and,
settlement of disputes between the shipowners and whenever practicable to publish such materials;
ship operators and such officers and crew members
and between the owner or manager of other n. Delegate his powers in writing to either of the
shipping enterprises and their personnel; Deputy Administrators or any other ranking
officials of the Authority; Provided, That he informs
d. To require any public water transport utility or the Board of such delegation promptly; and
Philippine flag vessels to provide shipping services
to any coastal areas in the country where such o. Perform such other duties as the Board may
services are necessary for the development of the assign, and such acts as may be necessary and
area, to meet emergency sealift requirements, or proper to implement this Decree.
when public interest so requires;
Section 13. Maritime Industry Manpower
e. Investigate by itself or with the assistance of Needs. The Authority shall establish and support a
other appropriate government agencies or officials, system of maintaining and developing a reservoir of
or experts from the private sector, any matter within trained manpower to meet the current and future
its jurisdiction, except marine casualties or needs of the industry. For the attainment of this
objective, it shall undertake the following:
a. Evaluate, in collaboration with the Department of the Authority. Accordingly the Water
Education and Culture, the capability of maritime Transportation Division of the Bureau is hereby
educational and training institutions and programs abolished.
in the Philippines, including the Philippine
Merchant Marine Academy, herein placed under the c. National Development Company. The powers
administrative supervision of the authority, to and functions of the National Development
supply shipping and shipyard manpower needs. Company relative to ship acquisition under
Republic Act No. 1407, as amended (Philippine
b. Inspect and evaluate periodically the standards, Overseas Act of 1955), are hereby transferred to the
facilities and performance of the maritime Authority together with its applicable records,
educational and training programs of government equipment and property.
and private schools and enterprises and recommend
to the Department of Education and Culture and In addition to the powers and functions herein
other appropriate government agencies such transferred, balances of all appropriations, funds,
changes in the curriculum as may be necessary. accounts and notes receivable derived from
shipping companies, equipment, records and
c. Conduct or arrange for the holding of pre- supplies are likewise transferred to the Authority.
employment, on-the-job and other training
programs to provide and upgrade shipping skills and Section 17. Retention of the Functions and Powers
techniques, with the cooperation and support of of the Philippine Coast Guard. Nothing in this
private enterprises and government agencies. Decree shall be constructed to affect of delimit the
present functions and powers of the Philippine
d. Provide incentives for education and training in Coast Guard relative to maritime affairs. All such
shipping and shipbuilding fields, specially those functions and powers of the Philippine Coast Guard
which are not attractive to students such as naval are retained by it. Furthermore in the performance
architecture, including scholarships and fellowships, of its functions, especially in the classification and
in the Philippines or abroad, with liberal grants for inspection of vessels, the Philippine Coast Guard
the entire duration of the course, to be sponsored will be assisted by the Authority; Provided, That
directly or arranged by the Administration. within two years from the issuance of this Decree,
the President may transfer to the Authority such
Section 14. Penalties. Any person who gives false regulatory functions of the Philippine Coast Guard
or misleading data or information or willfully or pertaining to maritime affairs as may be necessary
through gross negligence, conceals or falsifies a for the achievement of the aims and purposes of the
material fact, in any investigation, inquiry or Authority. The Authority shall coordinate with the
hearing, or other proceedings held pursuant to this Philippine Coast Guard in the exercise of
Decree, shall be punished with imprisonment or not supervision and regulation of the operation of water
less than two nor more than six months and with a transport utilities.
fine of not less than five hundred nor more than one
thousand pesos: Provided, however, That if the false Section 18. Coordination with Other Agencies.  The
or misleading data or information shall have been Authority shall coordinate with the Department of
given under oath, the maximum penalty for giving Labor, the Department of Education and Culture
false testimony or perjury shall be imposed. and the National Manpower and Youth Council in
the exercise of its pertinent functions that have
D. MISCELLANEOUS PROVISIONS relation to the functions of the abovementioned
agencies, particularly as these pertain to the
Section 15. Auditor.  The Commission on Audit development of trained and qualified seamen for
shall be the ex-officio Auditor of the Authority and Philippine vessels.
it shall appoint its representative therein, who shall
audit all accounts thereof. In order to strengthen its coordinative functions, the
Authority shall hire and train appropriate technical
Section 16. Reorganizational Changes. personnel which may be assigned to other
government agencies involved in the
a. Department of Trade. The Shipping and Freight implementation of laws, rules and regulations
Study Unit of the Department of Trade is hereby relative to maritime affairs.
transferred to the Authority together with its
applicable appropriations, records, equipment, Section 19. Transitory Provision. Officials and
property and such personnel as may be necessary. employees of all existing offices or agencies which
are abolished or reorganized under this Decree may
b. Bureau of Transportation. The powers and be absorbed into the Authority on the basis of merit
functions pertaining to the development and and fitness: Provided, That employees who shall be
supervision of maritime shipping of the Bureau of laid off by reason of this Decree shall be given
Transportation for Water are hereby transferred to gratuity equivalent to one month’s salary for every
year of service but in no case more than twenty-four
months salary, in addition to all benefits to which
they are entitled under existing laws and
regulations.

To carry out the provisions of this Section there is

hereby appropriated the sum of Five-hundred
thousand pesos out of the unappropriated funds in
the National Treasury.

Section 20. Appropriations. To carry out the

provisions of this Decree, there is hereby
appropriated the sum of two million pesos out of the
funds in the National Treasury not otherwise
appropriated. Thereafter, the succeeding
appropriations of the Authority shall be included in
the Annual Appropriations Act.

In addition to the above, the Authority is hereby

authorized to retain fifty per cent of its collections
from fees, charges and fines to defray any
deficiency in annual appropriations and to finance
its other projects.

Section 21. Repealing and Separability

Clauses.  All laws, decrees, orders, rules and
regulations, policies, programs or parts thereof,
which are inconsistent with any of the provisions of
this Decree, are hereby repealed or modified
accordingly.

If for any reason any section or provision of this

Decree is declared to be unconstitutional or invalid,
the other sections or provisions hereof, which are
not affected thereby, shall continue in full force and
effect.

Section 22. Effectivity. This Decree shall take effect

upon its promulgation: Provided, That these
portions hereof which may require a transition
period to assure the orderly transfer of powers and
functions shall take effect as stated in the
implementing details: Provided, further, That such
implementing details shall be prepared by the
Board, in consultation with the government agency
heads concerned, and submitted to the President for
approval within four months after issuance of this
Decree.

Done in the City of Manila, this 1st day of June, in

the year of Our Lord, nineteen hundred and seventy-
four.

(Sgd.) FERDINAND E. MARCOS

By the President:

(Sgd.) ALEJANDRO MELCHOR

Executive Secretary

Source: Malacañang Records Office