Shipping 2024 Comparisons

By way of background, the Philippines was a Spanish colony for almost 400 years, and a US colony for about 50 years. By reason of the historical link to Spain and the US, the Philippines follows the Spanish tradition of being a code-based jurisdiction, but all laws are written, and court proceedings conducted in the English language. The New Civil Code and the Code of Commerce were both adopted from the Spanish law. Most of the laws governing transportation and shipping are found in both Codes. The Philippines also follows the rule on judicial precedents and only the decisions of the Supreme Court interpreting provisions of the laws have the force of law.

The jurisdiction of Philippine Courts over maritime disputes is determined by law. We have the Judiciary Reorganization Act of 1980 (BP 129), as amended by Republic Act No 11576, which provides that regional trial courts have exclusive original jurisdiction over admiralty and maritime matters for demands or claims that exceed PHP2 million which is approximately USD38,000 at the exchange rate as of this writing. The lower trial courts (metropolitan/municipal/municipal circuit trial courts), have exclusive original jurisdiction in admiralty and maritime actions where the demands or claims are below PHP2 million. It was only in 2020 that the Supreme Court promulgated the Rules of Procedure for Admiralty Cases (the Admiralty Rules) with the aim to provide “fast, reliable, and efficient means of recourse to Philippine courts” to parties in admiralty and maritime related matter.

As of 2020, there are only ten designated Admiralty Courts with jurisdiction over maritime claims under the Admiralty Rules. The busy ports of Manila, San Fernando, Subic Bay, Cebu and Davao each have two designated Admiralty Courts.

Considering that the Philippines is an archipelago of over 7,000 islands, trade and commerce is heavily reliant on sea transport. The shipping cases filed with the Admiralty Courts cover a wide range of both wet and dry shipping claims.

The Philippines accepted the Memorandum of Understanding on Port State Control in the Asia-Pacific Region (or the “Tokyo MOU”) in 1994.

The Philippine Coast Guard (PCG), is the body vested with the authority to conduct vessel inspections, also issued Memorandum Circular 03-20 in relation to Port State Control for the purposes of establishing a uniform implementation of the Convention standards on foreign-flagged vessels calling at any port of the Republic of the Philippines.

Under the Philippine Coast Guard Law of 2009, the powers of the PCG are extensive. Among them are “to remove, destroy or tow to port, sunken or floating hazards to navigation, including illegal fish and vessels, at or close to sea lanes which may cause hazards to the marine environment”; “to investigate the inquire into the causes of all maritime accidents involving death, casualties and damage to properties”; “to enforce laws and promulgated and administer rules and regulations for the protection of marine environment and resources from offshore sources or pollution within the maritime jurisdiction of the Philippines”; and “to develop oil spill response, containment and recovery capabilities against ship-based pollution.”

By virtue of Presidential Executive Order No 125 and 125-A, as well as the Domestic Shipping Development Act of 2004 (RA 9295), the Maritime Industry Authority (MARINA) was vested with the authority to handle the domestic registration of vessels. The specific regulations on vessel registration are provided under MARINA Memorandum Circular No 2013-02. MARINA was vested with the authority to accredit and issue certificates of public convenience to domestic shipping operators to trade within the islands of the Philippine Archipelago.

Prior to July 2021, only Philippine nationals or Philippine corporations that were at least 60% owned by Philippine nationals, could own and registers ships in the Philippines. However, the Act amending portions of the Public Service Act (RA 11659) was recently enacted by the Philippine Congress to lift such restrictions. For the implementation and application of the new law, RA 11659, MARINA will need to issue its so-called Implementing Rules and Regulations (IRR) to dismantle the decades old restrictive rules and regulations. As of the date of this writing, MARINA has yet to issue the IRR, and thus the status quote has been maintained.

A vessel under construction cannot be registered with MARINA because a Builder’s Certificate from a MARINA accredited shipyard has to be submitted to be issued a Certificate of Ownership.

The Philippines allows temporary registration of vessels. A Philippine national or corporation may bareboat charter a foreign flagged vessel which may be registered with MARINA upon compliance with specific conditions. The vessel does not lose its original flag, but instead, shall be considered Philippine registered and flagged for the duration of the charter.

MARINA maintains the ship registry, and ship mortgages are annotated on the ship’s registry record. For a mortgage to be annotated by MARINA, the following documents should be submitted:

• a letter of intent;
• the mortgage contract which has to be notarised;
• proof of payment of documentary stamp tax; and
• the original Certificate of Ownership and Certificate of Vessel Registry.

These records and documents are available to the public, however, a letter request has to be provided and approved by MARINA before the information and documents are released.

The Philippines is a signatory to the 1992 Civil Liability Convention and the 1992 Fund Convention.

The Philippines is not a signatory to both the Collision and the Salvage Conventions.

However, regarding collision, the Philippines adheres to and applies the 1972 Collision Regulations. The 1972 Collision Regulations are part of the Philippine Merchant Marine Rules and Regulations of 1997 which were promulgated by MARINA. The rules on collision liability in the Philippines are set out in the Code of Commerce mentioned above. The rule is basically: all or nothing. If both vessels are to blame then each ship must bear its own loss, but both vessels are jointly and solidarily liable for the cargo loss on both vessels. To succeed on a collision claim, the claimant ship must be completely blameless.

The Philippines is not a signatory to the 1989 Salvage Convention. The Philippines has its own domestic legislation on salvage. The Philippine Salvage Law is set out in Act No 2616 and, the principles for a valid salvage service are no different from the concept as it exists in the United Kingdom, that is, the party performing the service must be a volunteer, there must be danger, and the service must be successful.

The Philippines is not a signatory to the 1976 Convention on Limitation of Liability for Maritime Claims. The domestic law on limitation of liability is set out in the Code of Commerce. The limitation amount is the value of the ship plus the value of the freight being earned during a voyage. In case the ship has been damaged, the limitation amount would be the ship’s damaged value plus the value of the freight in the course of being earned. The right to limit liability has been curtailed by the 2003 judgment in Aboitiz v New India. This Supreme Court judgment clarified that if there is a finding of any kind of unseaworthiness against the vessel, the owner loses the right to limit liability, regardless of whether the unseaworthiness arose through the owner’s fault or negligence.

A limitation action is an available remedy under the Admiralty Rules and is commenced by filing a verified (sworn) complaint impleading all known defendants any time after a marine casualty that causes damage, injury, or death. The defendants are the parties who are known to the owner to have claims against the limitation fund. To avail of the limitation action, the shipowner, charterer, or person in possession and control of the vessel must abandon the vessel with all her appurtenances, equipment, and freightage by notarial act filed with the Ship Registry. However, abandonment by notarial act is not necessary in case of a total loss.

The amount of the limitation shall be determined during a hearing set by the Admiralty Court based on judicial affidavits submitted by the parties. Said limitation fund is constituted either by making a deposit of money to the Admiralty Court or by producing a letter of undertaking from a Protection and Indemnity Club.

The Maritime Labour Convention (MLC) was ratified by the Philippines on 20 August 2012 and became a binding law on 20 August 2013. Being ratified, it forms part of Philippine law and is a direct legal basis for the protection of seafarers’ rights and safety. In fact, the Supreme Court of the Philippines has relied on the standards and guidelines set forth in the MLC in several of its judgments.

Some of the domestic legislation that applies in regards of seafarers’ rights and safety are:

• Department Order No 129, Series of 2013 issued by the Department of Labour and Employment streamlining the maritime labour standards in compliance with the MLC;
• RA No 11199, otherwise known as the Social Security Act of 2018, which mandated compulsory Social Security coverage for Overseas Filipino Workers; and
• Memorandum Circular No 34, Series of 2020 issued by the Philippine Overseas Employment Administration amending its Standard Terms and Conditions of Employment to comply with the standards and guidelines of the MLC.

The Philippine Carriage of Goods by Sea Act was enacted during the US Commonwealth period and brought into force in the Philippines the US Carriage of Goods by Sea Act, which is effectively the Hague Rules.

As for the general law governing carriage by sea involving common carriers, the same is covered by the general provisions of the New Civil Code.

The New Civil Code (Articles 1507–1520) defines a bill of lading as a negotiable document of title and provides the rights emanating therefrom. The valid holder of the bill of lading would be entitled to sue the carrier. Under Article 1518, the holder of the bill of lading in good faith and for value would be a valid holder thereof. The New Civil Code defines the valid holders as:

• the named consignee in the bill of lading;
• in case of a bearer bill of lading, the holder of the bill of lading transferred by delivery; and
• in case of a to order bill of lading, the holder of bill of lading transferred by indorsement and delivery.

For domestic carriage, the liability of the carrier is governed primarily by the Civil Code. Under the aforesaid Code, common carriers cannot limit liability for loss or loss to goods where such injury or loss was caused by its own negligence. In the absence of negligence, a shipowner can limit its liability for domestic carriage to his interest in the vessel in keeping with the well-settled doctrine of the real and hypothecary nature of maritime law.

In case of foreign carriage, neither the carrier nor the ship shall be liable for any loss or damage in an amount exceeding USD500 per package, or in case of goods not shipped in packages, per customary freight unit, or the equivalent of that sum in other currency. The exception to this is when the shipper declares the nature and value of such before shipment and inserts it in the bill of lading.

The foregoing limitation may be availed of by either the ship-owner or charterer.

The carrier can set up a claim against the shipper for misdeclaration of cargo. The carrier acting under a contract of carriage is entitled to damages arising from the natural and probable consequences of the misdeclaration. Furthermore, if the misdeclaration was made in apparent bad faith, ie, made with a dishonest purpose and a conscious commission of a wrong, then the shipper shall be responsible for all damages which may be reasonably attributed to the misdeclaration.

To date, there is no jurisprudence involving a carrier’s claim against a shipper for misdeclaration of cargo. However, in the 2014 case of Philam Insurance Company v Heung-A Shipping Corporation, the shipper was considered solidarily liable for damages with the carrier due to the shipper’s misdeclaration of the cargo.

There are two sets of rules for filing a cargo claim. There is a rule for domestic carriage and another for foreign trade.

In the case of domestic carriage, notice of loss or damage to the goods must be provided by the cargo owner to the carrier within 24 hours from the delivery of the goods. This notice is a condition precedent to filing a claim for damaged or lost cargo. If notice of loss has been timely given, the cargo owner has ten years within which to file his cargo claim. This period can be reduced by agreement of the parties but cannot be extended beyond ten years.

In foreign carriage, the Philippine COGSA provides that the carrier shall be discharged from all liability in respect of cargo loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered. Failure to provide a notice of loss shall not affect or prejudice the right of the shipper to bring suit within said one year period after the delivery of the goods or the date when the goods should have been delivered.

The Philippines is not a party to any international convention regarding the arrest of vessels. The procedure for the arrest of vessels in the Philippines is governed by Administrative Matter No 19-08-14-SC, otherwise known as the Admiralty Rules.

The Philippines recognises two types of maritime liens, that is, damage done by a ship and services rendered to the ship. Indemnities for crew injuries is not a recognised maritime lien.

For purposes of arresting a ship, a maritime lien holder for services to a ship may arrest regardless of her ownership based on Section 21 of the Ship Mortgage Decree.

In general, a ship may be arrested for maritime liens and maritime claims. The grounds for arresting a ship under the Admiralty Rules are as follows:

• preferred mortgage liens;
• pilot, tonnage and port dues and other similar charges;
• the wages of the crew, Master’s wages, and disbursements;
• repairs and other necessaries;
• damage done by a ship and/or collision liabilities;
• salvage;
• loans on bottomry and respondentia; and
• use of drydocks or marine railway or other necessaries furnished to the vessel.

Under the Rules of Procedure for Admiralty Cases, any of the foregoing maritime claims can be used as a ground to arrest a vessel and can be enforced even if resulting from chartering contracts.

By way of background, in an action both in rem and in personam, the Admiralty Rules require that the “relevant person” should either be the owner or the charterer by demise at the time of the filing of the initiatory pleading called a Complaint with the Admiralty Court. The “relevant person” is defined by the Admiralty Rules as “the person who would be liable on the claim in an action in personam.”

However, in an action purely in rem, the vessel may be arrested regardless of its owners’ personal liability on the merits. Such would be the case for claims arising from recognised maritime liens such as the unpaid bunkers claim described in 4.4 Unpaid Bunkers (also see Tsuneishi Heavy Industries v MIS Maritime Corporation).

Under the Admiralty Rules Section 5 (j), Rule 1, Part I, the bunker supplier’s claim for unpaid bunkers comes within the jurisdiction of the Admiralty Court. The claim for necessaries gives rise to a maritime lien under Philippine law and under Section 6 (e), Rule 1, Part I, the claim based on a maritime lien may be enforced by way of an action in rem. Under Section 21 of the Ship Mortgage Decree of 1978, any person furnishing supplies to any vessel upon the order of the owner of such vessel, or of a person authorised by the owner, shall have a maritime lien over the vessel. The bunker supplier will need to allege or prove that credit was given to such vessel. The Philippines does not have case law so far to state whether a charterer is “a person authorized by the owner” to order bunkers. Therefore, each claim will have to be judged based on its individual merits.

An application for arrest in the Philippines is an ancillary remedy, ie, it can only be applied for through a principal in rem action brought against the vessel. In filing the principal in rem action, a verified (sworn) complaint must be filed by the plaintiff, which should be accompanied by:

• a statement that it is a case in Admiralty jurisdiction;
• the names, addresses, and other relevant personal or juridical circumstances of the parties;
• all facts material and relevant to plaintiff’s cause or causes of action;
• the law, rule, or regulation relied upon, violated, or sought to be enforced;
• specification of all evidence supporting the cause of action, such as affidavits of witnesses, authenticated documentary evidence which must be attached to the complaint, and object evidence;
• the reliefs prayed for, which includes a prayer for the issuance of a Warrant of Arrest of a Vessel; and
• a certification against forum shopping.

Since the complaint must be verified and accompanied by a certification against forum shopping, the plaintiff’s representative must be duly authorised through a power of attorney, a board resolution, a secretary’s certificate, or other similar documents. These documents must be duly notarised, or when executed outside of the Philippines, duly apostilled or consularised. The documents accompanying the verified complaint, including its annexes, need not be original or certified true copies at the time of filing, but the original or certified true copies will be required by the Admiralty Court during the pre-trial conference.

In relation to the warrant of arrest, the applicant must execute an affidavit, which shall be attached to the verified complaint, that the applicant undertakes to pay all port charges, fees, and expenses for preservation and maintenance of the ship or cargo during its arrest until its release or sale.

In addition to this undertaking, the applicant must also give a bond or security executed in favour of the Admiralty Court in the amount of 30% of the claim but in no case less than PHP5 million).

Notice and hearing must be afforded unto the owner, master, or person in actual possession and control of the property before any Warrant of Arrest may issue. This notwithstanding, the plaintiff may request for an ex parte issuance of a Warrant of Arrest in cases of extreme urgency where he may suffer irreparable or gross inconvenience on account of the mobility of the ship.

Once issued, the Warrant of Arrest shall be valid for a period of 12 months from the date of its issuance.

Prior to the promulgation of the Admiralty Rules, we had successfully attached charterer’s bunkers by way of a writ of preliminary attachment. This remedy is described below. However, with the promulgation of the Admiralty Rules, the recourse to an attachment is no longer possible.

Arresting bunkers – in theory it should be possible, but the Admiralty Rules are relatively new and there are no precedents. Under the Admiralty Rules Section 5 (j), Rule 1, Part I, “Any agreement relating to the use of a ship, including bareboat charter, charter by demise, time charter, voyage charter or contract of affreightment, and maritime contract of carriage, whether of goods or people, including bills of lading”, comes within the jurisdiction of the Admiralty Court. It should be possible formulate a claim for charterer’s bunkers under said section.

Arresting freight - Under the Admiralty Rules Section 5 (f), Rule 9, Part I, “Any agreement relating to the use of a ship, including bareboat charter, charter by demise, time charter, voyage charter or contract of affreightment, and maritime contract of carriage, whether of goods or people, including bills of lading”, comes within the jurisdiction of the Admiralty Court. A warrant of arrest for freight may be issued through of an action in personam and in rem.

It is possible to arrest a sister-ship provided that the sister-ship is owned and registered under the same owner as the offending ship. Ships under the same management company or within the same group of companies may not be arrested.

Under Rule 57 of the Rules of Civil Procedure, it is possible to obtain an Order of Attachment against the property of the defendant as security for the satisfaction of any judgment. The procedure and the requirements to obtain such an Order is different from seeking a Warrant of Arrest. An attachment is similar to the English law Mareva Injunction.

The Rules of Procedure for Admiralty Cases provide that the defendant may file a bail bond or security, including a corporate surety, from a surety company accredited by the Philippine Supreme Court, to lift a Warrant of Arrest. The bail bond or security must be approved by the Admiralty Court, and in an amount sufficient to answer for the arresting party’s claims.

While a Letter of Undertaking or a foreign bank’s guarantee are not expressly mentioned, the same may be offered by the defendant and if accepted by the plaintiff, may be allowed by the court in the exercise of its discretion.

During the pendency of the action, the applicant shall pay all port charges, fees, and expenses for preservation and maintenance of the ship or cargo during its arrest until its release or sale.

After finality of judgment and upon motion of the prevailing party, the Admiralty Court may direct to sell (at a public auction) a ship or cargo which has been subject of a warrant of arrest and has remained in custodia legis due to failure to file the appropriate bail bond. For this purpose, the Admiralty Court shall cause the appointment of one or more appraiser/s who shall assign a value of the ship or cargo and assist the Sheriff in the sale of the property.

In case there are numerous prevailing parties in an action in rem, a motion may be filed before the court to determine the priority of the claims against the proceeds of the sale of the ship. In determining the priority of claims, the Court shall consider the relevant laws such as, but not limited to, the Ship Mortgage Decree of 1978, which gives preferred status to duly-constituted mortgages over the vessel.

The Philippines’ insolvency law is Republic Act No 10142, also known as the Financial Rehabilitation and Insolvency Act of 2010 (FRIA). FRIA provides procedures for the different types of rehabilitation and liquidation proceedings.

Under the FRIA, when a petition is filed and commenced by or against a distressed debtor, a stay or suspension order is issued and has the following effects:

• suspend all actions or proceedings, in court or otherwise, for the enforcement of claims against the debtor;
• suspend all actions to enforce any judgment, attachment or other provisional remedies against the debtor;
• prohibit the debtor from selling, encumbering, transferring, or disposing in any manner any of its properties except in the ordinary course of business; and
• prohibit the debtor from making any payment of its liabilities outstanding as of the commencement date except as may be provided herein.

The suspension order under FRIA takes precedence over admiralty proceedings filed against the distressed owner. As such, the admiralty proceedings will be suspended and cannot continue without an order from the insolvency court.

To apply for a Warrant of Arrest, the applicant is required to give a bond or security executed in favour of the Admiralty Court in the amount of 30% of the claim, but in no case less than PHP5 million). This bond is conditioned that the arresting party will pay all the costs which may be adjudged to the adverse party and all damages which he or she may sustain by reason of the arrest, if the court shall finally adjudge that the applicant was not entitled thereto.

The Philippines is not a signatory to international conventions relating to maritime passenger claims. For claims such as these, we rely on the New Civil Code provisions as well as our Code of Commerce. Under the New Civil Code, for contractual breaches, the prescriptive period would be ten years from the date the cause of action arose. For actions based on tort, the time bar is four years.

The personal injury of a passenger is considered a maritime claim. Article 587 of the Code of Commerce, as elaborated by Supreme Court jurisprudence, provides that ship-owners may be held liable for the indemnities in favour of the third persons arising from the conduct of the captain in relation to transported goods, as well as for the safety of passengers. However, the same provision provides that, the owner may exempt himself and limit liability by abandoning the vessel (including its equipment and freight it may have earned).

To add, for cases of cancelled, delayed or unfinished/uncompleted voyages, MARINA has issued Memorandum Circular No 7, series of 2018 which lists the rights of passengers and obligations of domestic operators.

The choice of law and jurisdiction in the Philippines is subject to the doctrine of forum non conveniens, ie, a court, in conflicts-of-laws cases, may refuse jurisdiction where it is not the most convenient or available forum, and the parties are not precluded from seeking remedies elsewhere. In determining the applicability of said doctrine, the court considers the “connecting factors” such as the situs of the res, the place of celebration, the place of performance, or the place of wrongdoing.

As a rule, the Philippines recognises arbitration as a means of resolving civil disputes. Parties may agree to enter arbitration either through an arbitration agreement contained in a contract between the parties or through a submission agreement. As such, an arbitration clause appearing on the face of a bill of lading is legally binding and enforceable in the Philippines.

For purposes of arbitration, the parties’ stipulation as to the Choice of Law in their agreement shall govern the substance of the dispute.

The recognition and enforcement of a foreign arbitral award in the Philippines is governed by the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, and Administrative Matter No 07-11-08-SC promulgated by the Supreme Court of the Philippines, otherwise known as the Special ADR Rules, and its implementing Rules and Regulations.

Rule 5 of Administrative Matter No 07-11-08-SC mentioned above states that: “A party to an arbitration agreement may petition the court for interim measures of protection.” Among other relief, the applicant may seek security for the claim by means of a writ of a preliminary attachment.

There is no domestic arbitration institute in the Philippines that particularly specialises in maritime claims. There are, however, several capable domestic arbitration institutes in the Philippines such as the Philippine Institute of Arbitrators, Philippine International Centre for Conflict Resolution, and Philippine Dispute Resolution Centre, Inc, with arbitrators that have experienced handling maritime claims.

Rule 5 of Administrative Matter No 07-11-08-SC mentioned above states that: “A party to an arbitration agreement may petition the court for interim measures of protection.” Among other relief, the applicant may seek an injunction directed against the party to the arbitration.

Republic Act No 10378 provides that international carriers are now only liable for paying the 3% common carrier’s tax imposed on cargo, but not on passengers. The Bureau of Internal Revenue has also issued Revenue Regulation No 15-2015 which exempts from value-added tax (VAT) the transport of passengers and cargo by international carriers doing business in the Philippines. The sale, importation or lease of passenger or cargo vessels including engines, equipment and spare parts thereof for domestic or international transport operations are also VAT-exempt, subject to the requirements of MARINA.

There is no concept of “frustration” under Philippine law, and therefore the New Civil Code would provide the guiding principles.

During the pandemic, the Courts addressed issues such as these by referring to the contract’s provisions on force majeure and the wording of the exempting circumstances. If the term, force majeure, was not contractually defined, the New Civil Code would be referred. Article 1174 thereof provides that these are extraordinary events that “could not be foreseen”, or even if foreseen, they were inevitable. Jurisprudence further elaborates that to invoke “force majeure”, it is necessary that the occurrence was independent of human will and that event has made it impossible for the party responsible to fulfil the obligation in a normal manner. Lastly, the party responsible for fulfilling the obligation should not have done anything to aggravate the injury or damage to the other party.

We also have Articles 1266 and 1267 of the Civil Code which provide that a person responsible to fulfil an obligation is released from it if, without his fault, the obligation becomes legally or physically impossible or if the difficulty of fulfilling the obligation is manifestly beyond the parties’ contemplation.

MARINA is the body that monitors and enforces this sulphur content limitation in fuel oil. It has been previously reported by MARINA that Philippine-flagged vessels that ply international routes are already compliant with IMO 2020. However, as regards vessels plying domestic waters, MARINA Memorandum Circular No SR 2020-06 has given these vessels until 1 January 2025 to comply with the 0.50% m/m fuel oil Sulphur content, per IMO 2020. This Memorandum Circular also provides for the penalty for using fuel oil with sulphur content above the limitations. we are not aware of any proceedings before MARINA relating to the violation of the limit.

The Philippines has recognised international trade sanctions, but specific to anti-terrorism financing. The Philippines has enacted Republic Act No 10168 specifically to make the financing of terrorism a crime against the Filipino people, against humanity, and against the law of nations.

The Philippines also follows the UN-mandated controls on export, transit and brokerage assistance of dual use items related to proliferation of weapons of mass destruction. Republic Act No 10697, otherwise known as the “Strategic Trade Management Act”, was set in place to fulfil its international commitments and obligations, including United Nations Security Council Resolution (UNSCR) 1540 proliferation of weapons of mass destruction.

There is, however, no direct sanctions imposed by the Philippines against Russia. As a matter of fact, while not having any direct sanctions in place, the Philippines was adversely affected by trade sanctions on Russia imposed by the United Nations and other countries because it resulted in the replacement and repatriation of several Filipino seafarers.

Similar to the rest of the world, the Philippines felt the negative impact of the Ukraine–Russia war on the prices of fuel and commodities.

The Philippine maritime labour sector was greatly affected by the war in two ways. Considering that the Philippines provides about 30% of the officers and crew on international ships, the ships that were trapped in the Black Sea employed numerous Filipino seafarers who had no easy way home. The Ukrainian seafarers were being repatriated to join the war and the Russian seafarers were also affected by the sanctions imposed on the Russian government. These factors created a short-term shortage of seafarers and Filipinos were considered for replacement to respond to the shortage in marine personnel.

The Philippines is one of largest providers of seafarers and marine officers for international vessels. These seafarers make a substantial contribution to the Philippine’s economy. Prior to COVID-19, the Philippines deployed 507,730 seafarers internationally. During the pandemic, the number went down by almost 50%, but after the first year, the number steadily increased. In terms of seafarers’ remittance, the country earned USD6.545 billion in 2021 and USD6.715 billion in 2022, the latter figure comprising at least 22% of all USD remittances from Filipino overseas workers. In January to July 2023, seafarers’ remittance reached USD3.809 billion.

This industry has not been without challenges, one of which is the rising number of seafarers’ claims for disability benefits. Due to the Philippines’ labour laws’ bias favouring employees and laws on immediate execution of judgment awards, ambulance chasers have taken advantage by filing legally unsubstantiated cases, with most of it decided in favour of seafarers. Even if a lower court’s decision is reversed by the Supreme Court, restitution of the paid award is usually slim as seafarers would no longer have the assets to satisfy the writ of execution. Because of this, ship owners are considering hiring seafarers of other nationalities for their vessels.

The Philippine government realises the repercussions of these questionable claims, and recognises the vital contribution of the manning industry to the nation’s economy. Thus, steps have been taken to “level the playing field” between seafarers and the ship owners. Currently, there is a pending legislation awaiting signature by Philippine Congress, giving ship owners fair chance of recovering paid judgments, should the Supreme Court decide that the award is erroneous. The Maritime Industry Authority (MARINA) also has a complaint process for cancellation of the seafarer’s identification and record book (SIRB) for those who received payment for full disability benefits.”