Shipping article(s)
June 4, 2015

Proposed regulatory changes ahead of next year’s elections look set to make shipping in and out of the Philippines smoother, Sergio R Ortiz-Luis Jr, president of the Philippine Exporters Confederation (PhilExport) said in a speech to its First Quarter General Membership Meeting.

“We are pleased that three of [the changes] appear to have some chance of approval before May 2016,” he said in a reference to next year’s elections.

Senate Bill 2364, which has been passed by a Senate committee, tops the list, as it would allow foreign ships to call at multiple ports, provided they carry import or export cargoes, Ortiz-Luis noted.

This is a sharp change to the current 57-year-old Tariff and Customs Code, which limits multiple ports-of-call only to vessels carrying a certificate of Philippine registry. A change in the regulations would present a big opportunity for exporters and shippers, Ortiz-Luis noted.

“This would allow importers and exporters to co-load in foreign ships going in or out of the Philippine jurisdiction” he said. (Co-loading is where a sea carrier bound for a specified destination agrees to move the container van cargo of another carrier bound for the same destination).

In case there is any doubt as to the significance of the move: “This development is a critical competitiveness measure, since [the micro, small and medium enterprises (MSMEs)] that are importing or exporting goods will be able to access a cheaper alternative in transporting their goods through co-loading in foreign ships,” Ortiz-Luis said.

Customs reform is also helping both in terms of legislation and practices. For the former, the Customs Modernization and Tariff Act (CMTA) will bring Philippines laws on par with the best global practices, he added.

“It has passed the House Committee level and is now being fast tracked at the Senate with our active participation,” he added.

Customs is also simplifying its procedures with more computerization and fewer documents.

“We have seen this in the repeal of the inspection of container stuffing, removal of the ‘running list’ that can impede cargo loading, consolidation of regulated import lists, and computerization between the BOC and PEZA, airway bills and soon, sea freight bills,” Ortiz-Luis said

Supplementing this, a mix of short-, medium- and long-term measures – partly a rethink of the situation and partly to prevent another congestion crisis – have been outlined by a government think tank.

Among the ideas advocated by the Philippine Institute for Development Studies (PIDS) in a recent research note are policy and infrastructure reforms. At the top of the short-term suggestions is a policy statement putting a cap on the capacity of Manila’s ports to prevent a congestion crisis.

PIDS also urges instructions that cargoes bound for, or coming from, south of Manila should call on Batangas Port, and those coming from the north should call at Subic Port.

Port operator International Container Terminal Services Inc (ICTSI) is also urged “to revive the PNR Rail freight operation to its inland container depot in Calamba, Laguna, during off-peak hours.” Calamba is located about 45 kilometres south of Manila.

Medium-term, PIDS acknowledges the need to divert Manila traffic to Subic and Batangas via the expansion of the latter and a rationalization plan for the Greater Capital Region.

Long-term, the emphasis is on better planning and a new, large deep sea port, although the recommendations did not make any suggestions as to where this port should be situated. More importantly, it did not say how the port should be financed.

However, PIDS does say the Philippines should have “a national multimodal transport and logistics development plan with special emphasis on connecting the Subic-Clark-Manila-Batangas corridor to the rest of the country.”

As good as that though would be for the country, problems do overhang this hopeful vision of the future, money being chief amongst them.

A reality check came when the Philippines’ biggest port operator said it was not interested in the Aquino administration’s first public-private partnership (PPP) seaport project – the P17 billion (US$380 million) Davao Sasa Port Modernization Project.

“We are not quite sure if we are going to bid. What we are seeing is [that] the investment requirement is so large. Numerous private ports are already in the area. So we may not bid for that,” Enrique Razon, ICTSI chairman, told Quezon City-based TV5 news.

Razon’s comment should serve as a reminder that infrastructure projects of the scale and number the Philippines is talking about carry significant costs – and that businesses want a return on the investment they put up.


By Michael Mackey

Southeast Asia Correspondent | Bangkok

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