WHEREAS, in the interest of the national economy, it is imperative that Philippine domestic shipping be expanded to meet the ever-increasing inter-island cargo and passenger traffic;

WHEREAS, due to the heavy capital requirements of the shipping industry, local ship owners and operators cannot raise sufficient financial resources to acquire new tonnage to replace their uneconomic and over aged fleet; and

WHEREAS, in order to alleviate the present plight of domestic shipping, it is necessary to temporarily relax certain aspects of the restrictive and constrictive legal framework under which vessels may be registered in the Philippines;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Republic of the Philippines, by virtue of the powers in me vested by the Constitution, do hereby order and decree the following as part of the law of the land:

SECTION 1. Any provision of law, decree, executive order, or rules and regulations to the contrary notwithstanding, any foreign-owned vessel under time charter or lease to a Philippine national, as the term is defined in Section 3 of Presidential Decree No. 474, may be issued a temporary certificate of Philippine registry by the Maritime Industry Authority: Provided, That the said Charter or lease (1) has had the prior written approval of the Maritime Industry Authority, (2) shall be valid and effective for a period of not less than five years, and (3) shall be used exclusively in the coastwise trade in the Philippines: Provided, further, That the operation of the vessel shall be entirely in the hands of Philippine nationals and free from any participation or interference from the alien owner, except insofar as such action shall be to directly protect his rights as owner thereof: Provided, finally, That the registered vessel shall be manned completely by a Filipino crew, except in the case of specialized fishing vessel.

The effectivity of any charter or lease contract entered into pursuant to this Decree shall not extend beyond the year 1990, unless otherwise extended by the President of the Republic of the Philippines.

SEC. 2. Any vessel issued a temporary certificate of Philippine registry as provided for in the section immediately preceding shall be entitled to all the rights and privileges of a vessel of Philippine registry, as well as the protection of Philippine law so long as its temporary certificate of registration is valid and subsisting. Correspondingly, the vessel shall also be subject to all requirements, limitations and all the duties and obligations imposed upon vessels of Philippine registry.

SEC. 3. The Maritime Industry Authority shall promulgate the rules and regulations, together with the procedures and guidelines, for the implementation of this Decree, subject to approval by the Office of the President.

SEC. 4. Any provision of law, decree, executive order, or rules and regulations inconsistent with this Decree is hereby repealed, amended or modified accordingly.

SEC. 5. This Decree shall take effect immediately.

Done in the City of Manila, this 31st day of July, in the year of Our Lord, nineteen hundred and seventy-five.