PPA urged to forgo share of freight handling revenue

Local players in the export industry want to eliminate the Philippine Ports Authority (PPA) share of cargo handling revenues in order to reduce logistics costs amid shipping constraints.

The Export Development Council (EDC) has approved the Draft Executive Order (EO) which aims to amend the 41-year-old regulations providing for a share of revenue from PPA cargo handling.

The letter, signed by the chairman of EDC’s advocacy and legislative oversight networking committee, Oscar A. Barrera, was sent last week to the secretary of transportation and chairman of the board of directors of the PPA, Arthur Tugade, and PPA Executive Director, Jay Daniel R. Sanitago.

The proposal seeks to amend Letter of Instruction (LOI) 1005-A by removing Instruction 3 and Instruction 4. This, in turn, will eliminate the share of PPAs in revenues from cargo handling contractors and port service operators.

LOI Instruction 3 notes that the government has a share of at least 10 percent of related revenues. Instruction 4, for its part, stipulates that the PPA is instructed to “carry out a one-off audit either alone or in coordination with other government agencies under the visiting authority of the State” to ensure the collection of the data. part of the government.

“This is a time of acute suffering for exporters whose operations have been hit hardest by the Covid-19 pandemic. However, the [PPA] has steadily and reliably increased the cargo handling costs it imposes, ”Barrera said.

” Moreover, he [PPA] touts its collections as a success, ignoring the impact that its regulations [policy might have] on local industry. The passage of this [EO] is a small step in the direction of supporting our local manufacturers, ”he added.

As a reminder, the EDC also issued a resolution calling for the repeal of LAW 1005-A in 2017, which was also signed by Secretary of Commerce Ramon M. Lopez.

The resolution states that the two instructions create a conflict of interest, as the APP benefits from its own regulations. The regulations in place provide the agency with “the incentive to increase the rate to improve its financial health,” he noted.

In addition, the resolution mentioned that the Ministry of Transport, the Ministry of Trade and Industry, the mixed foreign chambers of commerce and the National Competitiveness Council had called for a reduction in the costs of port services, as this would be good. bodes well for consumers.

EDC, along with the Philippine Exporters Confederation Inc. (Philexport) and the Supply Chain Management Association of the Philippines (SCMAP), opposed the increase in port fees.

In July, EDC and SCMAP appealed Manila North Harbor Port Inc.’s (MNHPI) 15.33 percent tariff increase proposal as it is seen as an additional burden on the already struggling economy. .

EDC and SCMAP noted that the “untimely proposal” will have an impact on micro, small and medium enterprises (MSMEs), whose operations – in most cases – are either temporarily closed or reduced amid protocols. lock.

Stakeholders in the export industry have pointed out that the pandemic has forced logistics services to be more expensive due to mobility restrictions, staff limitations and other related capacity issues. “MNHPI’s new policy forcing ships calling at port to use their dock cranes – thus subjecting shippers, and ultimately businesses, to crane fees – was also an additional burden, which did not make the subject to consultations with relevant stakeholders, ”they added. .

“We must anticipate that the rate hike will further decrease the country’s competitiveness, drive investors away and reject the efforts of government agencies and stakeholders to enhance the ease of doing business in the country. Plus, the extra cost will ultimately be borne by the end consumers – ordinary Filipinos and our overseas buyers, ”Philexport President Sergio Ortiz-Luis Jr. said.

Previously, EDC, SCMAP, Philexport and the Philippine Chamber of Commerce and Industry sent a letter to the House of Representatives Transport Committee calling for the implementation of standardized shipping charges.

Speakers stressed that shipping charges based on international trade terminology, a globally accepted standard for international trade, will allow companies to have better cost management. As such, they said shipping companies can also be more competitive because they level the playing field in terms of pricing.

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