Contributor: Kerwin Tan, Tan Hassani & Counsels
1. Which authority is in charge of the civil aviation registry in Philippines? Does Philippines use a single-registry system or is there a dual-registry system in place?
Aircraft shall be registered with the Civil Aviation Authority of the Philippines (hereinafter, the “CAAP”). CAAP is responsible for the following: (a) establish and maintain a system for the national registration of aircraft in the Philippines; (b) establish and maintain a system for the registration of liens, mortgages, or other interests in aircraft or aircraft engines; and (c) have sole authority to register aircraft and liens, mortgages or other interests in aircraft or aircraft engines.
2. Is the registry an operator registry or an owner registry (or both)?
It is an operator registry. The Philippine Civil Aviation Regulations (hereinafter, the “PCAR”) provides that no person may operate a civil aircraft unless it has been registered by its owner or operator.
3. What are the requirements and documentation to register an aircraft in Philippines? Include references to formalities such as notarisation, legalization, etc.
The PCAR provides that an aircraft is eligible for registration if it is: 3
- Owned by or leased to a citizen or citizens of the Philippines or corporations or associations organized under the laws of the Philippines at least sixty per centum (60%) of whose capital is owned by Filipino citizens (as referred in Section 44 of the Republic Act No. 9497), or a government entity of the Republic of the Philippines; and
- Not registered under the laws of any foreign country
- A foreign-owned or registered aircraft may be eligible for registration, if utilized by members of aero clubs organized for recreation, sport, or the development of flying skills as a prerequisite to any aeronautical activities of such clubs within the Philippine airspace, and if so, authorized by the Authority.
The following are the requirements for the registration of aircraft: 4
- A letter of approval on the assigned registration;
- Notarized Application for Aircraft Registration;
- Documentary Evidence of Ownership;
- Cancellation of registration from the country of origin (deregistration);
- Customs Clearance/Customs release/Custom Payment;
- Original or a certified true copy of registration certificate;
- Registration fee;
- Recording Fee (if applicable);
- Energy Tax Fee (if applicable);
- CAAP Accounting Clearance;
- Corporation Documents (Certificate of Registration from the Securities and Exchange Commission or Department of Trade and Industry, whichever is applicable);
- AAC & Operations Specification (if applicable);
- AOC & Operations Specification (if applicable);
- Civil Aeronautics Board List of Aircraft approval (if applicable);
- Notarized Certification from the Corporate Secretary (if applicable);
- Such other documentary-supporting documents that may be required.
All documents issued and/or signed outside the Philippines must be apostilled or consularized at the Philippine Consulate in that country.
4. What fees are payable to register an aircraft in Philippines?
A registration fee shall be paid for the registration of aircraft. Such fees shall depend on the aircraft’s weight, intended use, type of engine, and type of aircraft. An energy tax fee and a recording fee may also be paid.
5. Are there any weight and/or maximum age restrictions to register an aircraft in Philippines?
There are no weight or age restrictions to register an aircraft in the Philippines. However, in general, all aircraft would be subject to airworthiness evaluation by the CAAP.
6. Does registration of an aircraft in the national registry constitute proof of ownership under the laws of Philippines?
Republic Act 94979 (hereinafter, the “CAAP Law”) provides that the Certificate of Registration is conclusive evidence of ownership, except in a proceeding where such ownership is, or may be, at issue. However, since this is an operator registry, if the operator is registered as a “lessee,” then the ownership can be annotated on the Certificate of Registration.
7. How is an aircraft title transfer effected in Philippines? What are the formalities required to register such title transfer in the national registry of Philippines (e.g., notarization, legalization etc.)? Please summarize the related costs and procedures.
The following are the requirements for the transfer of ownership of aircraft:
- Application form prescribed by CAAP;
- Previous copy of Certificate of Registration;
- Documentary evidence of ownership (e.g. Bill of Sale);
- Copy of Accounting Clearance issued by the CAAP to the former and new owner of aircraft;
- Corporation document issued by the Securities and Exchange Commission/Department of Trade and Industry, if applicable;
- Secretary’s Certificate (if applicable);
- CAAP prescribed fees (i.e., Registration fees, energy tax, recordation fee, etc.);
- Air Operator Certificate Specification (if applicable);
- Civil Aeronautics Board’s list of aircraft approval (if applicable);
- Unless assumed by the new owner, all liens and encumbrances annotated at the back of the Certificate of Registration have been satisfied or complied with or declared by competent authorities as null and void or ineffective.
A new Certificate of Registration will be issued for the registration of an aircraft with the same nationality and registration mark. A new entry shall be made on the Philippine aircraft register. The process will be the same as the registration of an aircraft.11
All conveyance recorded under the CAAP Law shall comply with the requirements for the registration of documents similar to the land registration process. The conveyance to be recorded shall also state:
- The interest in the aircraft of the person by whom such conveyance is made or executed or, in the case of a contract of conditional sale, the interest of the vendor;
- The conveyance of such interest.12
All documents issued and/or signed outside the Philippines must be apostilled or consularized at the Philippine Consulate in that country.
8. What information and details are reflected in the certificate of registration of an aircraft?
The aircraft Certificate of Registration shall contain the following13:
- Control Number;
- Nationality or registration marks assigned for the aircraft;
- Manufacturer and Manufacturer’s designation of the aircraft;
- Aircraft Serial Number as found on the aircraft data plate affixed to the aircraft;
- Name of Owner or Operator;
- Address of Owner or Operator;
- Nil Action;
- Date of Issuance;
- Signature of the Director General;
- Remarks Section which must contain the date of expiration of the registration, the intended use (Commercial Air Transport, General Aviation, or Aerial Works), and record of payments;
- Conveyances connected to the aircraft must be entered at the back portion of the Certificate.
9. Are the entries in the aircraft registry of Philippines made available to the public upon submission of a specific application to the competent authority? Are there any fees payable for this?
Any person may request access to information from CAAP, including the list of entries in the aircraft registry, if it does not fall within any of the exceptions under the Freedom of Information Manual of CAAP.
As a rule, no fees shall be payable for any request for access to information. However, a reasonable fee may be imposed for the reimbursement of necessary costs, including costs of reproduction, and copying of the information required, subject to existing rules and regulations. In no case shall the applicable fees be so onerous as to defeat the purpose of the right to access information.
10. What kind of aircraft operations can be conducted with aircraft registered in Philippines (i.e., private use, commercial air transport or both)?
PCAR Part 8 provides that Aircraft Operations that can be conducted with the registered aircraft are commercial air transport operations and general aviation operations
Commercial air transport shall include operations involving the transport of passengers, cargo, or mail for remuneration or hire. General aviation operation refers to any other aircraft operations than a commercial air transport operation or an aerial work operation.
11. Does the civil aviation authority in Philippines authorise the operation of foreign registered aircraft? If so, with which countries has Philippines entered into bilateral agreements on the basis of article 83-bis of the ICAO Chicago Convention for the delegation of regulatory oversight?
As a rule, there is a nationality restriction when it comes to the registration and operation of aircraft in the Philippines. Only aircraft owned by or leased to a citizen or citizens of the Philippines, corporations or associations organized under the laws of the Philippines at least sixty per centum (60%) of whose capital is owned by Filipino citizens or a government entity of the Republic of the Philippines may be registered and operated in the Philippines.
However, the PCAR provides for an exception. A foreign-owned or registered aircraft may still be registered and operated within the Philippines, if utilized by members of aero clubs organized for recreation, sport, or the development of flying skills as a prerequisite to any aeronautical activities of such clubs within the Philippine airspace, and if so, authorized by CAAP. This means that foreign-owned aircraft may be registered and engage in operations of domestic air travel only. Foreign registered aircraft may still be authorized to operate in and to the Philippines. The PCAR allows foreign-registered aircrafts to perform commercial air transport operations in and to the Philippines upon issuance of a Validation of Air Operator Certificate. A Validation of Air Operator Certificate will be issued by the Director General upon satisfaction of the following:
- Has a valid Air Operator Certificate issued by a foreign Civil Aviation Authority;
- Has had its Aircraft Operator Security Program approved by its Civil Aviation Authority for the operations intended;
- Meet the applicable flight requirements and equipment requirements under the PCAR;
- Meets the standards contained in applicable Annexes to the Chicago Convention for the operations to be conducted; and,
- Philippine Civil Aeronautics Board (CAB) Approval.
12. Is there a separate register of aircraft mortgages and/or leases and/or security interests in Philippines?
No. Section 43 of the CAAP Law provides that CAAP shall: (a) establish and maintain a system for the national registration of aircraft in the Philippines; (b) establish and maintain a system for the registration of liens, mortgages, or other interests in aircraft or aircraft engines; and (c) have sole authority to register aircraft and liens, mortgages or other interests in aircraft or aircraft engines.
13. What are the formalities required to register a mortgage / lease / security interest in the national registry of Philippines (e.g., notarization, legalization etc.)? Please summarize the related costs and procedures.
No conveyance made or executed, which affects the title to, or interest in, any aircraft of Philippine registry, or any portion thereof, shall be valid in respect to such aircraft or portion thereof against any person, other than the person by whom the conveyance is made or executed, his heirs, assignees, executors, administrators, devisees, or successors in interest, and any person having actual notice thereof, until such conveyance is recorded in the CAAP and annotated at the CAAP original copy of the Certificate of Registration. Each conveyance so recorded shall be valid as against all persons.
No adverse claims may be recorded or annotated at the back of the Certificate of Registration unless originals of the documents are presented evidencing said claims and the payment of the corresponding fee.
After submission of a written letter from the owner requesting for the recordation of conveyances that affects the Certificate of Registration, the conveyance may be recorded only after the completeness of the submitted documents are verified. The following documents must be submitted:
- Notarized conveyances; and,
- Draft annotation to be signed by the parties involved.
Upon approval, the duplicate copy of the Certificate of Registration including all attached documents shall be forwarded to the Regulatory Standards Department for record keeping and updating of official database.
14. Is a mortgage priority notice an available security instrument for aircraft financiers in Philippines?
Mortgage priority notice is not an available security instrument for aircraft financers in the Philippines.
15. Does an aircraft mortgage duly registered in the national registry of Philippines extend to engines and other parts of such aircraft (either installed or not on the airframe)?
Yes. As mentioned in the previous questions, the CAAP is mandated to maintain a system for the registration of liens, mortgages, or other interests in aircraft or aircraft engines. CAAP Law provides that CAAP shall establish a national system for recording documents that affect title to or any interest in any aircraft registered and in any aircraft engine propeller, appliance, or spare parts intended for use on any such aircraft.
16. What statutory liens (if any) would rank prior to an aircraft mortgage duly registered in the national registry of Philippines?
The Civil Code of the Philippines provides that for specific movable properties of the debtor, duties, taxes, and fees due thereon to the State or any subdivisions thereof shall be preferred. This shall include, but not limited to, unpaid taxes under the National Internal Revenue Code, as amended (hereinafter, the “Tax Code”), the Customs Modernization and Tariff Act (hereinafter, the “CMTA”), any liens imposed by the Director General under the CAAP Law.
The Tax Code further provides that an excise tax imposed on imported goods, products, machinery equipment, or other similar articles shall constitute a lien which shall be superior to all other charges or liens, irrespective of the possessor.
17. Do the laws of Philippines provide for possessory rights and/or rights of detention over aircraft in favor of third parties (such as airport taxes, customs duties, air navigation charges, crew’s wages, MRO’s receivables)?
The CAAP Law provides that the Director General of CAAP shall have the power to impose a lien on personal and real properties, and other assets of persons, corporations, partnerships, and such other entities that shall be in default, or fail to perform their obligations, or fail to pay the fines, and other penalties imposed for violations of the law, rules, and regulations of CAAP.
Properties and assets levied upon may be sold and the proceeds applied to the satisfaction of the obligation after due notice and hearing.
The Civil Code provides that an unpaid seller of goods has a lien on the goods or right to retain them. It also recognizes possessory liens in respect of credits for the making, repair, safekeeping, or preservation of personal property
The Tax Code also authorizes the distraint or the sale of personal property to pay any tax due within the time required.
The CMTA further provides that liability for duties, taxes, fees, and other charges attached to importation constitute a lien on the imported goods which may be enforced while such goods are under customs’ custody.
In addition, Executive Order No. 903 provides for remedies for non-payment of any charges on the aircraft. It provides that the Manila International Airport Authority, in addition to any other remedy provided by law, detain, on its own, such aircraft equipment or furniture belonging to the owner or agent of the aircraft, until the amounts due have been paid
18. Are foreign law-governed security agreements (e.g., mortgages) recognized in Philippines in order to validly create a security interest over an aircraft registered in the national registry of Philippines? If so, are there any formalities/requirements to bear in mind?
Yes. Philippine laws generally allow the parties to choose which law shall govern their agreement or their contracts provided that it is not contrary to law, morals, public policy, or public order. However, such agreements, to be registrable, must be authenticated either at the Philippine Consular Office or the Philippine Embassy where the agreement was executed. If the country where executed is also a signatory to the Hague Convention on the Apostille, an apostille should also suffice in lieu of consularization.
19. Are foreign law-governed leases recognized in Philippines in order to validly lease an aircraft registered in the national registry of Philippines to a lessee incorporated in Philippines? If so, are there any formalities/requirements to bear in mind?
As mentioned in item 18, Philippine laws allow the parties to choose which law shall govern their agreement or their contracts provided that it is not contrary to law, morals, public policy, or public order.
In order for such contract of lease to be registered in the Philippines, the aircraft lease executed outside the Philippine territory must be authenticated either at the Philippine Consular Office or the Philippine Embassy where the said aircraft lease contract was executed. 26 If the country where executed is also a signatory to the Hague Convention on the Apostille, an apostille should also suffice in lieu of consularization. Normally, the lease is also annotated on the aircraft’s Certificate of Registration.
20. Has Philippines ratified the Cape Town Convention on International Interests in Mobile Equipment and the related Aircraft Protocol? Has Philippines made any declarations to better determine the scope of application of the Convention / Protocol in Philippines? If so, what is the impact of such declarations on aircraft registration issues? Are there any specific aspects relating to the enforcement of IDERA’s to be considered?
The Philippines has not ratified the Cape Town Convention on International Interests in Mobile Equipment and the related Aircraft Protocol as of this writing.
21. What are the requirements and documentation to deregister an aircraft from Philippines? How does the aircraft deregistration process work?
A letter of intention to deregister the aircraft in the Republic of the Philippines shall be prepared by the applicant. The Chief of the Aircraft Registration Section shall review the request to
determine the validity and authenticity of the request
The applicant must also submit the following:
- Notarized application form for deregistration;
- Original Certificate of Registration;
- Original Certificate of Airworthiness;
- Proof of Payment of CAAP prescribed fees;
- CAAP Accounting Clearance of current aircraft owner;
- Notarized Deed of Sale (if due to the sale of the aircraft);
- Other documents as the CAAP may deem necessary.
If the aircraft has an annotation, the applicant shall be required to settle/clear all derogatory or liens/encumbrances, prior to deregistration. No aircraft registered pursuant to Philippine civil aviation regulations shall be deregistered until and unless all liens and encumbrances annotated on the Certificate of Registration have been complied with or declared by competent authorities as null and void or ineffective.
The usual process involves filing the application for deregistration at the Aircraft Registration Section, who will then forward it to the legal department for review, before finally forwarding it to the Director General’s office for approval.
22. What fees are payable to deregister an aircraft from Philippines?
A deregistration fee shall be paid for the deregistration of aircraft in the registry. If there are annotations to be cancelled, the Certificate of Registration shall be reissued with cancelled annotations which shall also have a fee payable.
In general, the deregistration fee is Php750 and reissuance fee of Certificate of Registration and recording fee for cancellation of annotation would have fees of Php400 each, respectively. These are Value Added Tax exclusive (which is 12% as of this writing).
23. Is the consent of the mortgagee / lessor (as the case may be) required in order to deregister an aircraft from Philippines?
Consent is not required, per se. However, if a registered aircraft has an annotation (i.e., lease agreement, mortgage, pending accounts with CAAP), the applicant shall be required to settle or clear all derogatory or liens/encumbrances, prior to deregistration of aircraft.
No aircraft registered pursuant to Philippine Civil Aviation Regulations shall be deregistered until and unless all liens and encumbrances annotated on the Certificate of Registration have been complied with or declared by competent authorities as null and void or ineffective.
24. What are the usual practical difficulties (if any) involved in deregistering aircraft from Philippines?
The major factor to consider is whether the deregistration is voluntary or involuntary in nature. If the deregistration is voluntary in nature, the difficulty is more on the documentation involved, especially if executed outside the Philippines. If the deregistration is involuntary, a power of attorney for deregistration would be very helpful and has been recognized in the past by the CAAP as a valid instrument to effect deregistration.
25. How long does deregistration take, both where there is co-operation from the defaulted party (mortgagor / lessee / Operator) and where there is no such co-operation from it?
It cannot be easily determined how long a deregistration process may take if there is without cooperation from the defaulted party. As mentioned in the previous question, difficulties may arise if the document involved was executed outside the Philippines. The CAAP may also require further information and documentation to assure itself of the facts and circumstances of the default.
On the other hand, if there is cooperation from the defaulted party, the process may be done faster and will depend on how fast the parties will be able to prepare and submit the required documents.
Once the necessary documents are complete and submitted, officially at least, the application for deregistration should take three (3) days to process. But based on actual experience, the average processing time is about two (2) weeks.
26. Please outline the applicable repossession rules under the national laws of Philippines (and the Cape Town Convention, if applicable) following an event of default under a mortgage or a lease, including registration issues with the national registry in Philippines.
The rightful owner of the aircraft should file for an action in court to repossess the aircraft. Under Rule 60 of the Philippine Rules of Court, a party praying for the recovery of a personal property may, at the commencement of the action or at any time before answer, apply for an order for the delivery of the personal property. The applicant shall file an affidavit providing that (1) he is the owner of the property claimed, or entitled to possession thereof, particularly describing the property; (2) that the property is wrongfully detained by the adverse party, alleging the cause of detention thereof; (3) that the property has not been distrained or taken for a tax assessment or a fine pursuant to law, or seized under a writ of execution or preliminary attachment, otherwise placed under custodial egis, of if so seized, that it is exempt from such seizure or custody; and (4) the actual market value of the property.
A bond shall be posted by the applicant, executed to the adverse party amounting to double the value of the property as stated by the applicant in its affidavit, for the return of the property to the adverse party if that return be adjudged, and for the payment to the adverse party of such a sum as he or she may recover from the lessor in the action.
Once the affidavit is filed and the bond is approved, the court shall issue a writ of replevin and require the sheriff to take such property into his custody.