The Export Development Council (EDC) has approved the Draft Executive Order (EO) which seeks to repeal a 41-year-old regulation granting the Philippine Ports Authority (PPA) a share of revenues from cargo handling.

The Exporters Council sent a letter on October 26 to approve the OE project

Transportation Secretary Arthur P. Tugade, who is also Chairman of the PPA Board of Directors, and PPA Managing Director, Jay Daniel Santiago. EDC’s letter was signed by Oscar Barrera, who is also chair of EDC’s Networking Committee on Legislative Advocacy and Monitoring (EDC-NCLAM).

The proposed OE will amend Letter of Instructions (LOI) 1005-A by eliminating Instructions 3 and 4, a decision that will remove the PPA’s share of cargo handling revenues generated by cargo handling contractors and contractors. port service operators.

Instruction No. 3 of the LOI states that “the government’s share for all cargo handling contractors and port service operators shall be at a rate of at least 10% levied on their gross income from these services. “.

Instruction n ° 4 stipulates that in order to ensure collection by the government, the PPA is responsible for “carrying out a one-off audit either alone or in coordination with other government agencies under the visiting authority of the ‘State “.

In 2017, the EDC also published EDC Resolution No.3, signed by the Chairman of the Board, Secretary of Commerce Ramon Lopez, pushing for the repeal of LAW 1005-A, which was issued in 1980 by the Marcos administration.

In calling for the LOI to be repealed, the resolution said the two instructions “constitute a” conflict of interest “” because the PPA, being the regulator, also benefits from its own regulation, giving the agency “the incentive to increase the rate to improve financial health. “

EDC Resolution No.3 also said that the Ministry of Transport, Ministry of Trade and Industry, Joint Foreign Chambers of Commerce and the National Competitiveness Council stressed the need for policy reform. aimed at reducing the cost of port services for shippers in order to ultimately benefit consumers.

Barrera in his letter to Tugade said: “This is a time of acute suffering for exporters whose operations have been hit hardest by the COVID-19 pandemic. However, the Philippine Ports Authority has steadily and reliably increased the cargo handling charges it allows to impose.

“In addition, he presents his collections as a success, ignoring the impact that his regulations [policy might have] on local industry. The adoption of this decree is a small step in the direction of supporting our local manufacturers.

EDC and the Philippine Exporters Confederation, Inc. (PHILEXPORT) strongly opposed any increase in freight handling rates at Philippine ports.

In July of this year, PHILEXPORT and EDC asked PPA to defer approval of the proposed increase in freight handling rates at the Port of North Manila.

In their July 28 petition letter, PHILEXPORT and EDC urged Santiago to withhold approval of the freight handling rate increase “given the state of the Philippine economy in these difficult times.”

They also suggested that PPA forgo its share in freight handling charges to resolve the conflict of interest issue around PPA and improve the competitiveness of the economy.

PHILEXPORT president Sergio Ortiz-Luis Jr. also wrote that the group was “strongly opposed” to the petition for a tariff adjustment, adding that it would be an additional burden on struggling MSMEs.

“We must anticipate that the rate hike will further decrease the country’s competitiveness, drive investors away, and reject efforts by government agencies and stakeholders to enhance the ease of doing business in the country. Moreover, the additional cost will ultimately be borne by the end consumers – ordinary Filipinos and our overseas buyers, ”he added.

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