MAJOR business groups in the Philippines expressed “relief” that the proposed container monitoring policy of the Philippine Ports Authority (PPA) remains on hold due to the many issues raised by stakeholders.
The Philippine Exporters Confederation, Inc. noted that Philexport President Sergio R. Ortiz-Luis Jr. and Philippine Chamber of Commerce and Industry (PCCI) George T. Barcelon were among the resource persons who attended the Senate hearing on Resolution 484 seeking the inquiry on “increased logistics costs in the Philippines.”
The hearing was called by the Committee on Public Services chaired by Senator Grace Poe.
Filed by Senator Risa Hontiveros, the Senate Resolution No. 484 or Resolution calling for an Inquiry in aid of Legislation into Increased Logistics Costs in the Philippines Caused by Rising Port Fees and Charges noted that the “direct costs associated with TOP-CRMS…, including additional insurance, transaction, and trucking fees, will result in almost 50 percent increase in the cost of importing goods;…”
The Trusted Operator Program-Container Registry and Monitoring System (TOP-CRMS) was developed by the Philippine Ports Authority (PPA) to “solve high and unregulated charges in container deposits and ensure the smooth traffic flow within the ports it manages,” Philexport noted.
However, several port stakeholders—later backed by big business groups like Philexport and PCCI—argued that PPA’s good intentions are marred by objectionable provisions of the plan that will further bloat the already high logistics costs in the Philippines, now estimated over a quarter of total business costs, and one of the highest in the world.
At the Senate’s Wednesday hearing, Department of Transportation (DOTr) Secretary Jaime J. Bautista announced that the Board of the PPA deferred the implementation of Administrative Order (AO) 04-2021 which contains the details of the implementation of the TOP-CRMS.
Bautista explained that the PPA Board is still reviewing complaints of extra cost and processes involved as raised by most stakeholders. Oppositors, he said, also include the Bureau of Customs (BOC) which is also implementing a container monitoring system under its Electronic Tracking of Containerized Cargo (E-TRACC).
PCCI President George T. Barcelon said this policy “will not provide any value added” and is inconsistent with the efforts to ease the flow and cost of doing business in the country. Along with high energy and logistics costs, Barcelon noted the country is “challenged” in attracting more investors because of the difficult regulatory processes that the private sector has to deal with.
Meanwhile, Philexport chief Sergio R. Ortiz-Luis Jr. stressed that exporters are “very concerned” because the extra costs will be passed on to them and eventually to consumers, on top of the country’s inflation and competitiveness issues.
While recognizing the government body’s efforts to address port congestion and modernize its monitoring systems, Senator Poe raised port users’ complaints that the PPA’s administrative order would supposedly drive up fees and charges, and in effect, domestic logistics costs.
“High shipping rates also worsen inflation,” Poe pointed out as she presided over the Senate panel’s inquiry. “In creating reforms to our maritime trade, it’s time to regulate excessive charges, all while supporting the growth of our shipping industry,” she said in mixed English and Filipino.
The controversial system being pushed by the PPA has been drawing flak from major stakeholders since June 2021.
In an urgent open letter to President Ferdinand R. Marcos, Jr. in January 2023, at least 16 business organizations including the PCCI and Philexport called for the revocation of the policy.
In their open letter, the stakeholders warned that the TOP-CRMS and Empty Container Storage Shortage Shared Service Facility (ECSSSF) may “end up derailing the (Marcos) administration’s economic recovery efforts.” (Full story: https://businessmirror.com.ph/2023/01/27/top-business-groups-back-protests-vs-ppa-order-no-4/)
Image credits: Nonie Reyes