The House of Representatives is now working with the Department of Industry (DTI) for the passage of a measure that will regulate high shipping rates to help lower import cost.
Speaker
Alan Peter Cayetano said shipping rates, which are unilaterally imposed by
international shipping lines, have become excessive, leading to increases in
the cost of imported raw materials and other goods.
According
to the DTI, the Philippines has the highest logistics cost among manufacturing
rivals in Southeast Asia, as businesses here allocate over one fourth of their
sales on logistics services.
Cayetano
added the House is coordinating with the DTI in reconciling and fine-tuning a
draft bill that Trade Secretary Ramon M. Lopez plans to submit to the House to
regulate shipping fees and the pending measures already filed by several
lawmakers in the 18th Congress on this issue.
According
to the DTI, it plans to submit its draft bill before the end of January.
Currently,
there are two pending bills in the Lower House to regulate and standardize
local fees imposed by foreign shipping lines operating in the country.
Moreover,
the Speaker said high shipping fees force importers to pass on these costs to
consumers, leading to higher prices of goods.
“Local
producers who import raw materials are forced to pay these exorbitant shipping
fess, which jack up their production costs, and, in the process, result in
higher prices for domestic consumers,” said Cayetano.
“What we
are [seeking to protect]…here are our consumers [themselves]. This [measure]
will also help the government improve its tax collection capabilities,” the
Speaker added.
The DTI
had earlier planned to issue a joint administrative order, together with the Department
of Transportation and the Department of Finance, on the regulation of local
fees charged by foreign shipping lines, but later decided on asking the
President instead to issue an executive order on the matter.
But the
lack of an enabling law covering the regulation of fees imposed by foreign
shipping lines operating in the country prompted the DTI to draft a bill on
this issue and submit it later to Congress to give more teeth to the measure.
A study by the DTI and the
World Bank, titled “An Assessment of Logistics Services Performance of
Manufacturing Firms in the Philippines” said firms operating in the country
reportedly spend 27.16 percent of their sales on logistics.
When
pitted against Southeast Asian competitors, businesses in Thailand spend 11.11
percent of their sales on logistics services, 16.3 percent in Vietnam and 21.4
percent in Indonesia.
Some
shipping lines allegedly developed a mechanism to make shipping rates less
transparent to benefit exporters overseas at the expense of importers here,
according to an earlier study by the DTI’s Export Development Council and the
now defunct National Competitiveness Council. This scheme, the study read, is
costing the economy between $2 billion and $5 billion
yearly.
