Shipping Agreement (Philippines)

A Shipping Agreement in the Philippines governs the arrangement between the parties and the conditions on which it operates.

Philippine maritime law is primarily governed by the Code of Commerce and its provisions on maritime commerce (Articles 652-869), which are supplemented by the Civil Code's provisions on common carriers (Articles 1732-1766). The Philippine shipping industry is regulated by the Maritime Industry Authority (MARINA) under Presidential Decree No. 474, which licenses shipping companies and regulates domestic shipping routes. The Philippine Ports Authority (PPA) under Presidential Decree No. 857 manages port facilities and port tariffs, affecting the loading and discharge costs included in freight agreements.

For international shipping, Philippine shipping agreements must comply with applicable international conventions. The Philippines is a signatory to the International Convention for the Safety of Life at Sea (SOLAS, 1974), the International Convention on Load Lines (1966), and the International Convention for the Prevention of Pollution from Ships (MARPOL 73/78), all administered domestically through MARINA. International cargo documentation — Bills of Lading — are typically issued under the Hague-Visby Rules or the Hamburg Rules depending on the shipping company's flag and route.

The Bureau of Customs (BOC) under the Customs Modernization and Tariff Act (Republic Act No. 10863, 2016) regulates the importation and exportation of goods through Philippine ports. Shipping agreements for goods subject to import/export controls must address BOC documentary requirements — Import Entry and Internal Revenue Declaration (IEIRD) for imports, and Export Declaration for exports — and the customs broker's role under Republic Act No. 9280 (Customs Brokers Act).

The Bureau of Internal Revenue (BIR) treats domestic freight income of shipping companies as income subject to corporate income tax. International shipping income of foreign-flagged vessels may be subject to VAT exemption under Section 102(b) of the NIRC for services rendered to persons engaged in international trade, and the expanded withholding tax on freight payments depends on whether the shipping company is a resident or non-resident corporation.

The legal framework governing the Shipping Agreement (Philippines) in Philippines draws on several key statutes and regulatory bodies. Under Philippine law, the Civil Code of the Philippines (Republic Act No. 386) governs contractual obligations. The Revised Corporation Code (Republic Act No. 11232) regulates corporate entities through the Securities and Exchange Commission (SEC). The Labor Code of the Philippines (Presidential Decree No. 442) and Department of Labor and Employment (DOLE) govern employment matters. The Data Privacy Act of 2012 (Republic Act No. 10173) and the National Privacy Commission (NPC) protect personal data. The Bureau of Internal Revenue (BIR) administers tax obligations under the National Internal Revenue Code. Parties executing a Shipping Agreement (Philippines) in Philippines should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Revised Corporation Code (RA 11232, 2019) sets the foundational requirements.

A Shipping Agreement in the Philippines is needed whenever a cargo owner or consignee engages a shipping company for the regular or recurring transport of goods by sea between Philippine ports or on international routes.

A Shipping Agreement is required when a manufacturer or trader engaged in domestic inter-island trade regularly ships goods between Manila, Cebu, Davao, and other Philippine ports. Domestic shipping agreements establish freight rates, cargo acceptance procedures, and priority booking arrangements with MARINA-licensed domestic shipping companies.

A Shipping Agreement is needed when an importer or exporter engages a freight forwarder or shipping line for regular export shipments of Philippine goods (electronics, agricultural products, garments) to international destinations. International shipping agreements define the Incoterms (FOB, CIF, CFR) governing the point of risk transfer from seller to buyer, which affects cargo insurance obligations.

A Shipping Agreement is required when a logistics company engages a shipping line for space reservations on container vessels for a fixed period — a slot charter or space agreement — establishing guaranteed container slots, freight rates, and surcharge structures.

A Shipping Agreement is needed when a Philippine island municipality or barangay government procures sea transport services for essential goods (rice, fuel, medicine) under Republic Act No. 9184 (Government Procurement Reform Act), where a formal shipping agreement forms part of the procurement documentation.

A Shipping Agreement is required when a cold chain operator ships temperature-sensitive pharmaceutical products or perishable food items between Philippine ports, where the agreement must specify refrigerated container requirements, temperature monitoring obligations, and compliance with MARINA reefer container handling standards.

Parties in Philippines should prepare a Shipping Agreement (Philippines) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under Philippine law, the Civil Code of the Philippines (Republic Act No. 386) governs contractual obligations. The Revised Corporation Code (Republic Act No. 11232) regulates corporate entities through the Securities and Exchange Commission (SEC). The Labor Code of the Philippines (Presidential Decree No. 442) and Department of Labor and Employment (DOLE) govern employment matters. The Data Privacy Act of 2012 (Republic Act No. 10173) and the National Privacy Commission (NPC) protect personal data. The Bureau of Internal Revenue (BIR) administers tax obligations under the National Internal Revenue Code. Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.

A valid Shipping Agreement in the Philippines must contain the following essential elements to be enforceable under the Civil Code and the Code of Commerce.

Parties and MARINA Licensing: Full legal names of the shipping company or freight forwarder (with MARINA Certificate of Vessel Registration or freight forwarder registration) and the shipper or cargo owner (with BIR TIN), with addresses. MARINA licensing verification protects the shipper against engaging unlicensed operators.

Cargo Description: Detailed description of the goods to be shipped — commodity type, packaging (pallets, containers, bulk), weight and volume, Harmonized System (HS) Code for customs purposes, and any special handling requirements (hazardous materials, refrigerated goods, oversized cargo). Accurate cargo description is essential for compliance with Bureau of Customs import/export documentation requirements.

Freight Rate and Charges: The freight rate in PHP ₱ per unit of measure (per 20-foot equivalent unit, per ton, per cubic meter), applicable surcharges (bunker adjustment factor, port congestion surcharge, documentation fee), and the payment terms (payable in advance or collect). For international shipments, whether freight is payable in PHP or USD should be specified.

Port Information and Delivery Terms: Port of loading, port of destination, estimated transit time, and the applicable Incoterms 2020 (FOB, CIF, CFR, EXW, DDP) or equivalent delivery terms for domestic trade. Incoterms determine the point at which risk and cost transfer from the shipper to the consignee, affecting cargo insurance obligations.

Cargo Liability: The shipping company's liability for cargo loss or damage under Articles 1734-1766 of the Civil Code and relevant provisions of the Code of Commerce. The carrier's per-package or per-shipment liability limit, cargo insurance requirements, and the claims notification period (typically 3 days for apparent damage at delivery under the Civil Code).

Force Majeure and Deviation: Provisions covering typhoon, storm, earthquake, port congestion, government orders, or other force majeure events under Article 1174 of the Civil Code that may delay or prevent shipment, the carrier's right to deviate from the agreed route in an emergency, and the allocation of additional costs arising from force majeure events.

Additional compliance elements for a Shipping Agreement (Philippines) used in Philippines include: Under Philippine law, the Civil Code of the Philippines (Republic Act No. 386) governs contractual obligations. The Revised Corporation Code (Republic Act No. 11232) regulates corporate entities through the Securities and Exchange Commission (SEC). The Labor Code of the Philippines (Presidential Decree No. 442) and Department of Labor and Employment (DOLE) govern employment matters. The Data Privacy Act of 2012 (Republic Act No. 10173) and the National Privacy Commission (NPC) protect personal data. The Bureau of Internal Revenue (BIR) administers tax obligations under the National Internal Revenue Code. Forms-legal.com provides this template as a starting point for Philippines-compliant documentation.