2019News

Government rushes order to ease congestion in ports, regulate high shipping fees

By Elijah Felice Rosales, March 26 2019; Business Mirror

https://businessmirror.com.ph/2019/03/26/government-rushes-order-to-ease-congestion-in-ports-regulate-high-shipping-fees/

Image Credit to Business Mirror

THE government is rushing to conclude a joint administrative order (JAO) that will address port congestion and regulate high shipping fees, as it admitted the two issues are taking a toll on the country’s trading activities.

Trade Secretary Ramon M. Lopez said the JAO will be issued in the next two weeks, and the government is just waiting for final inputs from stakeholders. The order, he explained, will include measures regulating fees charged by shipping lines, as well as stabilizing port utilization rate.

“[The JAO] is still subjected to consultation, as stakeholders are still submitting their inputs [and we are awaiting them] so that we can fine-tune the order. We will be signing that hopefully within one week or two weeks. It should have been [issued] last week, but some stakeholders have yet to input,” Lopez said.

“Hopefully, we can include in the JAO measures regulating fees charged by shipping lines. We hope to regulate that,” he added. Lopez stressed the importance of issuing the order as soon as possible, as port congestion left unaddressed could slow down the economy, particularly trading activities.

“Yes, of course [there is an impact on the] cost of money, the cost also of charges being made. For any delay in the turnaround time of the trucks, that has a cost, too. These are the causes of higher costs, that is why we want to solve this. We need smoother operations [at our ports],” Lopez said.

The JAO, he added, also has measures aimed at stabilizing yard utilization rate of Manila ports between 60 percent and 65 percent.

As of March 4, the yard-utilization rate of the Port of Manila was down to 64 percent, according to the Bureau of Customs. Further, the number of laden and empty containers fell to 78 percent and 47 percent, respectively.

This was better than the port situation in the first week of January, when the yard-utilization rate was at 98 percent and the numbers of laden and empty containers were at 100 percent and 93 percent, accordingly.

The trade chief pinned his hopes on the expectation that, once issued, the JAO will resolve concerns raised by stakeholders, particularly the export sector trying to rebound this year after enduring a 1.8-percent decline in receipts last year. He said once all inputs are assessed and considered, the JAO will be out.

Data from the Philippine Statistics Authority (PSA) showed exports last year declined 1.8 percent to $67.48 billion from $68.71 billion in 2017, which exporters traced to the virtual trade war between the United States and China, record-high inflation in September and October, among others.

Exporters are trying to rebound this year, but figures did not favor them during the first month. PSA data reported exports in January fell 1.7 percent to $5.27 billion from $5.37 billion during the same month in 2018.

The Philippine Exporters Confederation Inc. (Philexport) last Friday called on the government to roll out those immediately doable measures that will assist the sector recovery, including the issuance of the JAO.

Philexport President Sergio R. Ortiz-Luis Jr. argued that it is urgent for the government to resolve the problems holding back the export sector from recovering. Regulating shipping charges and decongesting the ports—both of which are main components of the JAO—will certainly help exporters, Ortiz-Luis added.

“Other than the external factors, which we do not have control of, what really obviously hurts are so many big and small domestic growth hurdles and issues that keep recurring because the fundamentals are simply not in order,” Ortiz-Luis said.

The JAO is crafted by several government agencies headed by the Department of Trade and Industry. It was one of the DTI’s commitments at a logistics summit in December 2018, identifying measures to lower shipping costs and hasten trade operations.

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