EDC revives advocacy to reduce shipping costs

CEBU, Philippines - The Export Development Council (EDC) has teamed up with the National Competitiveness Council (NCC) to revive its advocacy on bringing down the domestic shipping cost as well as port charges in the Philippines.

Although the Philippines has managed to improve slightly on its competitiveness ranking, EDC is determined to further bring up the country’s competitive edge, pushing the country’s products to make considerable interest from overseas’ market.

Donald G. Dee, PhilExport vice chairman and trustee said that the exporters have been clamoring for reforms in the domestic shipping cost of over 30 years. However, the government has yet to make drastic action on this matter.

The high domestic shipping cost and port changes have been identified as one of the greatest concerns among processed food exporters, who source their raw materials and inputs all over the country.

Other exporting sectors, like furniture and home furnishing industries that also source their raw materials from different regions in the country likewise suffer from the problem.

Based on a study conducted by local think-tank groups and even by the World Bank submitted to EDC, it revealed that shipping costs to and from the country are competitive with neighboring countries, but inter-island shipping is more costly.

The study contained two major reasons were traced behind bloated domestic shipping cost, these include; the cabotage enacted by Congress long time ago to disallow foreign vessels from carrying inter-island cargoes, plus exorbitant port charges that the Philippines Ports Authority (PPA) has allowed.

According to EDC, there have been bills reversing the cabotage law filed in both houses of Congress, but these have not been enacted into law for decades.       

On the other hand, it was pointed out that the PPA has been a beneficiary of high port charges due to its power to approve petitions for rate hikes.

Under a presidential letter of instruction issued by then President Ferdinand Marcos, it gets a share of 20 percent of port charges for exported and imported cargoes and ten percent for domestic shipments, the study mentioned.

Because of this, the EDC decided to draft a presidential executive order which, together with the NCC, will be submitted for consideration by the President.

EDC will ask the help of Transportation Secretary Manuel Roxas II, a long time ally of the business community, to help them convince President Benigno Aquino III to institute the reform.

Meanwhile, the export sector in the Philippines is seeing a promising outlook this year, as the financial squabbles in both US and Europe are starting to show slight improvement.

Exporters hope that with the support of the Philippine government to help exporters achieve greater competitiveness in the global trading scene, the country‘s export sector can anticipate “good times” once again. (FREEMAN)