PHILIPPINES Trends and Developments Contributed by: Valeriano Del Rosario, Maria Francesca V Bautista and Celestine Jeanne M Generillo, VeraLaw
Pacific Ocean north of the equator, and once born they track westward towards the Philippines. Over the last 15 years, the strength, ferocity and destruc - tive power of typhoons that have struck the Philip - pine Islands have increased dramatically. As a result, ships on the water are at greater risk. As an example, in December 2021, Typhoon Rai (international name), which was named Typhoon Odette in the Philippines, cut through the Philippines like a scythe sowing death and destruction. The Philippines keeps track of the count of typhoons that enter the Philippine Area of Responsibility by designating the first of the year’s typhoon with an “A” and following the sequence of the alphabet. VeraLaw was busy during Typhoon Odette when the firm opened over 20 files for damaged/ stranded vessels for yachts, tugs, barges, general cargo ships, and docks and harbour facilities. In 2023, the Philippines suffered a major oil spill off the island of Mindoro, with over 800,000 litres of industrial fuel spilled by the vessel Princess Empress during heavy weather. Again in 2024, another oil spill occurred in Manila Bay when the tanker Terranova went down during the passage of Typhoon Gaemi (local name Carina). The Philippines is a signatory to both the 1992 Civil Liability Convention and the Fund Convention. In both instances, the flying squad of ITOPF (Inter - national Tanker Owners Pollution Federation Limited) were on site almost immediately to assist with reme- dial measures to minimise damage and environmental degradation. It is a growing concern that climate change has been greatly affecting the severity of typhoons in the Philip - pines. In fact, the Asian Development Bank considers the Philippines as the nation that is most affected by extreme weather (“Climate Change and Disaster Risk Management”, Asian Development Bank, accessed 6 Jan 2024). According to an article by Carbon Brief, the Philippines’ typhoon season had worsened due to the fact that the world has warmed by 1.3 degrees Celsius. According to Carbon Brief, this would trans - late to the country possibly experiencing three major typhoons making landfall in a single month, roughly once every 15 years. This is said to be 25% more fre - quent than in a world without climate change (Ayesha
Tandon, “Record-breaking Philippines typhoon sea - son was ‘supercharged’ by climate change”, Carbon Brief, 12 Dec 2024). With the increasing severity and frequency of typhoons due to climate change, there will likely be a corresponding increase in claims made to hull and machinery (H&M) and protection and indemnity (P&I) insurers in the foreseeable future. Future Litigation Trends The two recent oil spills mentioned above prompted inquiries concerning limitation of liability under Philip - pine law. There are two distinct limitation regimes. One regime is specific to oil pollution under the Oil Pollu - tion Compensation Act (OPCA), which was passed in 2007. OPCA brought into force the Civil Liability and Fund Conventions. The other regime is available in the case of damage to third parties (for example, ship collision and cargo damage cases), and the procedure is governed by the 2020 Rules of Procedure for Admi - ralty Cases (the “Admiralty Rules”). Under OPCA, the limitation fund is based on special drawing rights (SDRs), and is SDR3 million for ships not exceeding 5,000 units of tonnage. For ships over 5,000 tons, there is an additional SDR420 per ton over 5,000 tons. OPCA likewise contains a provision that considers subsequent amendments to the 1992 Civil Liability Convention with respect to the limit of liabil - ity. When the Implementing Rules and Regulations of the law were issued in 2016, the limit of liability was increased as follows: • for ships not exceeding 5,000 GT, the limit is SDR4.51 million; • for ships of 5,000 GT to 140,000GT, the limit is SDR4.51 million and an additional SDR631 for each additional unit of tonnage; and • for ships exceeding 140,000GT, the limit is SDR89.77 million. The OPCA fund is constituted by depositing money with the Maritime Industry Authority (MARINA) or by providing a financial guarantee, such as a P&I letter of guarantee. The pollution claims must be brought before the regional trial courts, and recovery is from
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