High local shipping cost increasing prices of goods

September 17, 2014 at 14:41

by Bernie Magkilat

September 16, 2014

The high cost of inter island shipping, which is exclusively reserved for ships bearing the Philippine flag, has been blamed for the high price of traded goods in the country.

Senator Bam Aquino stressed this as he pushed for the passage of his  bill that seeks to open domestic shipping to foreign ships.

Aquino, chairman of the Senate Committee on Trade, Commerce and Entrepreneurship, filed Senate Bill No. 2364 to amend Section 1009 of the Presidential Decree No. 1464, otherwise known as the Tariff and Customs Code of 1978.

The bill, which seeks to introduce reform in the shipping industry, will allow foreign ships to call in multiple  ports in the country provided that their cargoes are intended for import or export and duly cleared by the Commissioner of Customs.

The costly and cumbersome inter-island shipping is one of the roadblocks in increased prices of goods that will be a burden for consumers and will hamper the growth of the micro, small and medium enterprises (MSMEs) in the country, said Aquino.

“As an archipelago composed of more than 7,100 islands, the country relies heavily on sea routes interconnecting the islands. Inter-island shipping is crucial in the transport of goods especially this coming Christmas season,” said Aquino.

However, inter-island shipping is exclusively reserved for ships bearing the Philippine flag and shipping cost impacts the movement and price of traded goods in the country.

“While this helps the domestic shipping industry, the cost of shipping is hampering trade especially for the MSMEs,” said Aquino,

As a response to the call of the President and key stakeholders, Aquino has filed a bill seeking to allow foreign ships to call in multiple

During one of the committee hearings, it was discovered that it is cheaper to send products from other countries to the Philippines than to ship goods within the country.

For example, he said, the cost of shipping a 20-foot equivalent unit (TEU) from Kaoshiung, China to Cagayan de Oro is $360 or P16,000 only.

However, the cost of shipping the same cargo from Manila to Cagayan de Oro will take $1,120 or almost P50,000.

“MSMEs who are importing or exporting goods will be able to access a cheaper alternative in transporting their goods through co-loading in foreign ships. Ultimately, this leads to lower prices of goods for the Filipino public,” Aquino said.

If passed, the bill will allow importers and exporters to co-load in foreign ships going in or out of the Philippine jurisdiction.

Moreover, this bill gives clarification on the definition of common carriers and public service in the shipping industry.

With this bill, foreign cargoes shall not be subjected to the law concerning common carriers and public services as defined in the Civil Code and the Domestic Shipping Development Act, respectively.


Source: https://www.mb.com.ph/high-local-shipping-cost-increasing-prices-of-goods/

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