THE suspension of “pass-through” fees collected by local government units (LGUs) from vehicles transporting goods across the country will help reduce costs among micro and small businesses, among others, according to an official of the Department of Trade and Industry (DTI).
“This has been a long-standing issue, not just from the truckers, but even the manufacturers, the local businesses. Because they need to transport their goods, services and everything else they’re selling; even the micro and small businesses,” DTI Undersecretary Kim Lokin said at a news forum in Quezon City on Saturday.
The Trade undersecretary added, partly in Filipino, “There are many of those—so the permits, the taxes, the sticker fees and so many sundry fees, the businesses are suffering already, especially for the micro and small businesses, since their capital is not so big.”
Lokin illustrated the process that small merchants go through. When they transport the goods they sell, for instance, under the One Town One Product (OTOP), these micro and small businesses would hire jeepneys, and not even trucks because it’s going to cost them more.
According to the website of DTI, OTOP Philippines is a “priority stimulus program” for micro, small and medium enterprises (MSMEs) as government’s effort to drive inclusive local economic growth.
“The program enables localities and communities to determine, develop, support, and promote products or services that are rooted in its local culture, community resource, creativity, connection, and competitive advantage,” the DTI website noted.
“So when they reach the next town or city, they will be flagged down again. Mayroon po ba kayong mga kailangan namin na ganito, ganiyan [They’re asked if they have this or that kind of paper requirements for this particular locality],” Lokin said.
Last Thursday, President Ferdinand R. Marcos Jr. prohibited LGUs from collecting pass-through fees for delivery vehicles on national roads, and those unfunded by Republic Act (RA) No. 7160 or the Local Government Code (LGC).
He also “strongly urged” LGUs to suspend or discontinue the collection of fees such as sticker fees, discharging fees, market fees, toll fees, entry fees, or mayor’s permit fees, imposed on vehicles simply transporting goods and passing through public roads constructed by and funded through the LGC.
The policies were issued through the president’s Executive Order No. 41, which he signed on September 25, 2023, but only took effect last Thursday after it was posted in the Official Gazette.
Marcos said this is in line with his administration’s goal to reduce transport and logistics costs, which are often passed on to consumers, who bear the brunt of the increase in prices of goods and commodities.
Logistics costs eat up 30%
Meanwhile, Lokin divulged that 30 percent of the annual cost of a good being sold in the market originate from logistics cost. With this, she pointed out that the suspension of the pass-through fees helps ease the burden of manufacturers, consumers, and small business owners.
For her part, Rina Papa, Vice President of Alliance of Concerned Truck Owners and Organization (ACTOO), expressed hope that the truckers group will be part of the technical working group being developed for the implementing rules and regulations (IRR) of EO 41.
“And we hope they take into consideration not just the national roads but the roads that lead to business centers—our manufacturing sites, our warehouses natin,” Papa said.
Papa also noted that since the distribution of goods would have an implication on the entire nation and not just one municipality, the LGUs, through this EO, should consider the “general impact of imposing taxes, levies, permits, et cetera even under local roads.”
While she only dropped estimates, Papa revealed that the road use taxes being imposed by the local government on truckers could cost about P2,000 to as high as P2,500 per truck, per month.
This, she said, translates to around P30,000 additional cost to logistics per truck, annually.
Currently, Papa said there are about 3,500 members of ACTOO. Meanwhile, in terms of truck units, she said there are 5,000. She added that these members are mostly based in Manila.
She cited some instances where trucks are obliged to pay for a sticker fee whenever they would pass through the checkpoints of some provinces. Not paying for this, she added, would mean that the truck wouldn’t be able to pass through.
“We cannot understand that treatment of truckers and as I have said, I think the EO would open up and enlighten the various local government units and other sectors as to the importance of the truckers in terms of the national economy,” the ACTOO official emphasized.