November 19, 2023
THE European Chamber of Commerce of the Philippines (ECCP) on Tuesday expressed concern over the Philippine Ports Authority’s (PPA) proposed increase in storage charges for foreign containerized cargo, saying this will reduce the competitiveness of the Philippine market.
“We need to ensure the competitiveness of the Filipino market so if you put taxes and more blocks—that makes trade more difficult. It’s not helping,” ECCP President Paulo Duarte told reporters on the sidelines of a forum on Tuesday in Makati City.
Duarte was referring to a PPA proposal, aired at a public consultation last October 18, to increase by 32 percent the storage charges for import, export and transshipment containers; and by 150 percent the surcharges of the corresponding storage rates with increase for reefer containers.
Describing the Philippines’s current macroeconomic data as “very favorable,” the ECCP President said, “we need to continue this path, and not to create more blocks.”
According to a statement issued by the Philippine Exporters Confederation Inc. (Philexport) on Friday, the port regulator said foreign cargo are assessed for storage charges when they remain at PPA ports beyond the fee storage period (FSP).
In justifying its proposal, the Authority insisted this would ensure optimal use of the container yard and encourage immediate withdrawal of containers to prevent congestion.
But Philexport in its letter pointed out that a major policy like this should initially go through a Regulatory Impact Assessment (RIA) as required under Republic Act No. 11032 or the Ease of Doing Business and Efficient Government Service Delivery Act of 2018.
“This is to prevent causing undue regulatory harm that might arise from the higher charges. As proposed, we are already seeing the immediate harm they will cause to shippers and the economy in general,” said the letter, dated November 8, 2023 and addressed to PPA general manager Jay Daniel R. Santiago.
In a recent PPA hearing, Philexport said, “Any additional cost will hurt the economy and stakeholders that are facing inflation and a weak global economy.”
The Supply Chain Management Association of the Philippines (SCMAP)—also in a recent hearing—called the proposed rate increase ill-timed, given the recent rise in transport fare, minimum wage, and prices of basic commodities.
Other attendees at the hearing suggested either deferring the rate hike or spreading the increase in tranches over a three-year period.
Aside from an RIA of the proposed regulation, Ortiz-Luis in the Philexport letter also recommended that no fees be imposed in situations when containers overstayed due to reasons beyond the shipper’s control.
Local exporters also recommended that national and local holidays be excluded in counting the days to be charged beyond the FSP; as well as to base the rate of increase on the average inflation level recorded since the last fee adjustment.