Port and Terminal Concessions in the Philippines: How MARINA Rules Apply

Port and terminal concessions in the Philippines fall within the regulatory framework of the Maritime Industry Authority (MARINA) under Republic Act No. 9295, the Domestic Shipping Development Act of 2004. The law governs domestic shipping, port operations, and the use of cargo handling equipment. While RA 9295 does not use the term "concession" as a single defined concept, it establishes the rules for who may operate in Philippine ports, how cargo is handled, and what authorizations are required. Port and terminal operations are treated as part of the domestic shipping and port services ecosystem that MARINA regulates.

What RA 9295 Covers in Port and Terminal Operations

RA 9295 defines "cargo handling equipment" as any machinery, gear, or equipment used by the ship operator or a duly authorized and licensed port operator to service or handle cargo, on board the vessel, at the pier, or in the terminal or container yard. This includes cranes, forklifts, top lifts, stackers, tractor heads, containers, pallet boards, and similar items, along with their spare parts and accessories.

This definition confirms that port and terminal operations are recognized under Philippine law and that the entities performing them — ship operators and licensed port operators — must be duly authorized. The law treats cargo handling as a distinct activity that may be performed by either the domestic ship operator or a licensed port operator.

Who May Operate in Domestic Shipping and Ports

Under Section 5 of RA 9295, no franchise, certificate, or any other form of authorization for the carriage of cargo or passengers in the domestic trade shall be granted except to domestic ship owners or operators. A domestic ship operator is defined as a citizen of the Philippines, a commercial partnership wholly owned by Filipinos, or a corporation at least sixty percent (60%) of the capital of which is owned by Filipinos, duly authorized by MARINA to engage in domestic shipping.

For foreign vessels, Section 6 provides that no foreign vessel shall be allowed to transport passengers or cargo between ports or places within Philippine territorial waters, except upon the grant of a Special Permit by MARINA when no domestic vessel is available or suitable to provide the needed shipping service and public interest warrants the same.

These nationality requirements shape the concession landscape. Any entity seeking to operate port or terminal services connected to domestic shipping must meet the Filipino ownership thresholds or secure the appropriate special authorization.

MARINA's Authority Over Port and Terminal-Related Operations

Section 10 of RA 9295 grants MARINA broad powers relevant to port and terminal operations. MARINA has the authority to:

• Register vessels;
• Issue certificates of public convenience authorizing the operation of all kinds, classes, and types of vessels in domestic shipping, valid for no more than twenty-five (25) years;
• Establish and prescribe routes, zones, or areas of operations of domestic ship operators;
• Require domestic ship operators to provide shipping services to any coastal area, island, or region where such services are necessary;
• Set safety standards for vessels and require compliance with operational and safety standards;
• Inspect all vessels to ensure and enforce compliance with safety standards and other regulations;
• Determine the impact which any new service shall have to the locality it will serve.

These powers extend to the operational environment in which port and terminal services are delivered. When MARINA evaluates a new shipping service, it considers the port, province, or region the service proposes to serve, as stated in Section 7.

Rates, Routes, and Terminal Handling Services

Section 8 of RA 9295 deregulates the domestic shipping industry, authorizing domestic ship operators to establish their own domestic shipping rates, provided that effective competition is fostered and public interest is served. MARINA monitors all shipping operations and may exercise regulatory intervention where public interest needs to be protected.

Section 13 addresses monopolized routes. MARINA has the authority to draw up rules and regulations necessary for service in monopolized routes to determine the fairness of passenger and cargo rates needed to sustain the service. In doing so, MARINA considers the economic and beneficial effect on the port, province, island, or region, the volume of passengers and cargo available, the level and quality of service offered, and the available port facilities and terminal handling services.

This provision explicitly recognizes terminal handling services as a factor in MARINA's rate regulation for monopolized routes, confirming that port and terminal operations are integral to the domestic shipping framework.

Compliance Requirements for Port and Terminal Operators

Entities involved in port and terminal operations must comply with several requirements under RA 9295:

Insurance coverage. Section 14 requires every domestic ship operator to submit annually adequate insurance coverage for each passenger and for cargo, computed in accordance with existing laws and rules. If a domestic ship operator offers both passenger and cargo service, the total insurance coverage must be equivalent to the sum of both requirements.

Safety standards. Section 9 requires all vessels operated by domestic ship operators to be in seaworthy condition, properly equipped, and manned by duly licensed and competent crew. MARINA has the power to inspect vessels and all equipment on board to ensure compliance.

Prohibited acts. Section 16 lists prohibited acts and practices of domestic ship operators, including operating without a valid certificate of public convenience or other required authority, refusing to accept or carry passengers or cargo without just cause, failing to maintain vessels in safe condition, failing to obtain adequate insurance, and failing to meet safe manning requirements.

Frequently asked questions

What is a port terminal concession in the Philippines? A port terminal concession generally refers to the grant of rights to operate or provide services at a port or terminal. Under RA 9295, entities performing cargo handling or terminal operations must be duly authorized and licensed port operators or domestic ship operators regulated by MARINA.

Who regulates port and terminal operations in the Philippines? MARINA regulates domestic shipping and related port operations under RA 9295. It issues certificates of public convenience, sets safety standards, monitors shipping operations, and has authority over rates in monopolized routes, considering terminal handling services.

Can foreign entities operate port terminals in the Philippines? Under RA 9295, domestic shipping authorization is granted only to Filipino-owned entities meeting the sixty percent (60%) Filipino ownership requirement. Foreign vessels may transport passengers or cargo between Philippine ports only upon a Special Permit from MARINA when no domestic vessel is available.

Practical takeaways

• Port and terminal operations in the Philippines are regulated under RA 9295, which defines cargo handling equipment and recognizes licensed port operators.
• Domestic shipping authorizations require Filipino ownership of at least sixty percent (60%) of capital for corporations.
• MARINA issues certificates of public convenience valid for no more than twenty-five (25) years and may impose fines or revoke licenses for violations.
• Terminal handling services are a factor in MARINA's determination of fair rates for monopolized routes.
• Foreign vessels need a Special Permit from MARINA to transport cargo or passengers between Philippine ports.

Primary sources

The rules discussed above are drawn from the following primary sources, as published in the Official Gazette and the national statute book.

• IRR of REPUBLIC ACT NO. 10635 - 2022 IMPLEMENTING RULES AND REGULATIONS OF REPUBLIC ACT 10635, "ACT ESTABLISHING THE MARINA AS THE SINGLE MARITIME ADMINISTRATION RESPONSIBLE FOR THE IMPLEMENTATION AND ENFORCEMENT OF THE INTERNATIONAL CONVENTION ON STANDARDS OF TRAINING, CERTIFICATION AND WATCHKEEPING FOR SEAFARERS, 1978, AS AMENDED, AND INTERNATIONAL AGREEMENTS OR COVENANTS RELATED THERETO:

• IRR of REPUBLIC ACT NO. 12009 - THE IMPLEMENTING RULES AND REGULATIONS OF REPUBLIC ACT NO. 12009 OR THE NEW GOVERNMENT PROCUREMENT ACT

• 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

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.