The Philippine government and local shipping lines still have a lot of work to do to harmonize the country’s standards, policies, and documentation requirements and comply with the overall Association of Southeast Asian Nations (ASEAN) policy framework, according to a shipping executive.
This is something the country needs to accomplish in order for the local shipping industry to seize the opportunities emerging from a fully integrated regional shipping system, said Roberto Umali, president of Lorenzo Shipping Corp.
Umali, who spoke to PortCalls on the sidelines of a recent Supply Chain Management Association of the Philippines forum, said that every company should look at ASEAN integration as a potential opportunity, with its purpose being “not just to open barriers but to harmonize, liberalize, and integrate standards.”
“We know for a fact that ASEAN integration will happen,” Umali said, adding that integration is now “happening but slowly” since it is a “work in progress.”
He added that government thus needs to check that its national policies are in line with ASEAN directions in various key areas, including taxation and education.
Citing the educational sector, the shipping executive said the government has already aligned it by launching the K-12 program in 2012, lengthening the basic education program from 10 years to 12 years. By doing so, expatriate students from within ASEAN can move more easily into the country to pursue their studies, Umali said.
In the same way, since investors will now look at the whole ASEAN bloc as a single market, he said that “it’s now up to the Philippine shipping company (on) how to present itself” to be more competitive and investor-friendly.
Lowering shipping costs
For one, the industry needs to look into its domestic shipping costs, which are higher than elsewhere in the ASEAN. “In that sense, our domestic shipping might (be) uncompetitive,” Umali noted.
Moreover, standardizing shipping documentation should include integrating the country’s multimodal forms of transport into the region as well.
For example, Umali said a bill of lading issued in Indonesia should be valid until the goods arrive in the Philippines.
This means documentation requirements of agencies such the Bureau of Customs, Department of Trade and Industry, and Maritime Industry Authority have to be made seamless to fit in with requirements in other ASEAN member-states.
“Even if the goods are free to move, if the documentation side is not yet fixed… the effect of that is inefficiency,” Umali said.
Singapore, for example, is efficient because it does not require Customs clearance, so goods enter and exit ports faster, Umali noted.
But the shipping executive said that if ASEAN liners come to the Philippines, they’ll face efficiency constraints such as limitations in port infrastructure that other member-states like Singapore do not experience.
Asked which ASEAN countries are potential competitors in shipping, Umali said it might be Indonesia and Vietnam.
As for the fear of domestic liners that they will see transport companies from other ASEAN nations already gearing up for the integration “suddenly” infiltrating the country, Umali noted that the essence of ASEAN integration is “not to compete with each other” but for the 10 member-countries “to be viewed as one by the world.”
More focused on domestic challenges
But domestic liners’ plans for ASEAN integration have for the moment been “set aside,” according to Umali, as they have focused their attention on the effects of the truck ban. Philippine Liner Association of the Philippines and Philippine Inter-island Shipping Association are also busy opposing attempts to lift the cabotage policy in the country. – Roumina Pablo
Image courtesy of xedos4 at FreeDigitalPhotos.net
