TRADE groups including the Philippine Exporters Confederation, Inc. (Philexport) and Philippine Chamber of Commerce and Industry (PCCI) have renewed their objection to a Philippine Ports Authority (PPA) order prescribing the registration and monitoring of containers, noting that such pads the “undue cost burdens” of business and consumers amid runaway inflation and container delays.
In a statement issued on Thursday by the umbrella organization of Philippine exporters, the organizations—PCCI and Philexport, along with Supply Chain Management Association of the Philippines (SCMAP), and four networking committees of the Export Development Council (EDC)—sought the scrapping of PPA Administrative Order 04-2021 and its Implementing Operational Guidelines (IOG).
In a January 10, 2023, joint position letter to PPA general manager Jay Daniel Santiago, the trade groups expressed their “vehement opposition to the implementation and strongly recommends the immediate rescission of PPA Administrative Order 04-2021 and its Implementing Operational Guidelines (IOG) on the Trusted Operator Program-Container Registry and Monitoring System (TOP-CRMS).”
The groups said the order will only bring a “regulatory burden” to all affected stakeholders while violating the Ease of Doing Business (EODB) law.
The groups said that their objection, along with brokers, truckers, shipping lines and other affected stakeholders that they expressed in meetings and through position papers last year “seemed to have fallen on deaf ears” when the PPA proceeded with the latest IOG.
Since May 2022, some 14 trade, industry and transport and logistics groups had issued a solidary statement seeking the “immediate revocation” of the policy, as it “threatens to cripple the transport and logistics industries and the national economy as a whole.”
PPA AO-2021 sets the policy for the registration and monitoring of containers entering and leaving PPA ports, including the scheduling, loading, unloading, release and movement of all containers.
The order aims to generate a record of accountability to “enable PPA to monitor the movement of containers from the time of entry, discharge, return and storage, and re-export,” with the objective of preventing smuggling.
Further, it “shall apply to all containers originating from foreign ports that will be unloaded at government and/or private ports under the administrative jurisdiction of the PPA.” In their letter to the PPA general manager, the trade groups listed issues against the PPA administrative order and its implementing operational guidelines.
Among the objectives of PPA AO 04-2021 that the groups oppose is how the Authority will supposedly simplify procedures and remedy port congestion through an electronic monitoring system for container movement.
They pointed out that PPA did not “sufficiently explain how the system could effectively prevent port congestion.”
“PPA AO 04-2021 is a tedious, redundant and expensive system. This redundancy generates additional undue costs to businesses and consumers who are already laden by the skyrocketing inflation rate and delays in the movement of containers that further worsen congestion in the ports,” the groups added.
The groups said they were also met with “similar suspicion” that the policy will reduce the transport cost of goods, adding that the container monitoring by PPA will rather “further inflate costs.”
Other than the container insurance cost of P980 plus value-added tax (VAT), there will also be a service fee of P3,520 plus VAT per container for use of the staging facility beyond the first three days. This, the groups said, is on top of accreditation fees that shipping lines, trucking and insurance companies must pay.
The staging facility is the designated site where the tracking device will be detached prior to re-exportation of the empty container.
The trade groups said “these costs will be passed on to the end consumer.”
The groups also noted that the order “directly encroaches” on the function of the Bureau of Customs (BOC), which under Customs Administrative Order No. 08-2019 is given the task to monitor the movement of containers inside and outside the port.
The groups have recommended that for information gathering purposes, “PPA should make sure its systems are interoperable with those of the BOC, trade department and other stakeholders.”
They reminded PPA of the EODB Law requirement to conduct a Regulatory Impact Assessment prior to the issuance of any proposed regulation to ensure that it does not add undue burden and cost to stakeholders.
“In the interest of public good and consistent with the President’s thrust of ‘reducing transport logistics cost to sustain the country’s economic recovery,’ we strongly call for the rescission of PPA AO 04-2021 [TOP-CRMS] and its IOG,” they stressed.
The position letter was signed by George Barcelon, president of PCCI; Sergio Ortiz-Luis Jr., president of Philexport; and Dennis Llovido, president of SCMAP as well as by the heads of different EDC networking committees: Philip Young, agri policy; Rami Hourani, legislative and advocacy monitoring; Danilo Lachica, trade policies and procedures simplification; and Enrico Basilio, transport and logistics.
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