A bill seeking to separate the regulatory and administrative functions of the Philippine Ports Authority (PPA) and create a new port agency focused on developing, managing, and operating public ports has been filed at the House of Representatives.
House Bill (HB) No. 8005, authored by Bohol Third District representative Arthur Yap, seeks to create a Philippine Ports Corporation (Philports) that will assume PPA’s commercial functions, while PPA’s regulatory functions will be transferred to the Maritime Industry Authority (Marina).
“There is an urgent need to reform the country’s port administration by separating the regulatory and development functions of the Philippine Ports Authority by converting it into a Philippine Ports Corporation and transferring its regulatory functions to the Maritime Industry Authority (Marina),” Yap said in his bill’s explanatory note.
The lawmaker said port users through the years “have complained of low service levels, inefficient port operations and ever increasing port charges.”
“They claim that the high cost of transport serves as an effective barrier to increased trade (both local and foreign) and undermines the country’s overall competitiveness,” he added.
In Section 2 of HB 8005, it is declared as policy of the state “to avoid conflict of interest arising from regulatory agencies vested with both regulatory and development or commercial functions.”
“Under no circumstance should a regulatory agency benefit from its own regulation and/or use its regulatory powers to protect itself from competition at the expense of public interest,” it added.
Stakeholders and several industry groups have been proposing the separation of PPA’s commercial and regulatory functions, citing conflict of interest.
Also calling for such separation are the National Logistics Master Plan of the Department of Trade and Industry, private-sector led Philippine Multimodal Transport and Logistics Roadmap, and a discussion paper by state-owned think tank Philippine Institute for Development Studies titled “Regulatory Measures Affecting Services Trade and Investment: Distribution, Multimodal Transport, and Logistics Services.”
“This anomalous arrangement under which the regulator is also partly responsible for port operation and management has resulted in the formulation and implementation of policies and regulations that are detrimental to the welfare of the transport and logistics service providers and users, and thus to the nation’s international competitiveness,” the PIDS report pointed out. It noted that under Letter of Instruction (LOI) 1005-A, PPA is entitled to a share of cargo-handling revenues.
Under HB 8005, Philports will still be a government-owned and controlled corporation attached to the Department of Transportation (DOTr) and will be mandated to own, develop, manage, and operate public ports within the port system of PPA.
While Philports is a public enterprise, “it is not primarily a revenue-generating entity but a service provider,” HB 8005 noted.
Its 15-member board of directors will be composed of concerned government agencies, as well as private sector representatives from the Philippine Chamber of Commerce and Industry, Supply Chain Management Association of the Philippines, Port Users Confederation, Philippine Exporters Confederation, Inc., National Tourism Congress, Philippine Inter-Island Shipping Association, and Philippine Chamber of Arrastre and Stevedoring Operators. The current PPA Board only includes one representative from the private sector.
Philports is mandated to prepare a long-term port system development plan, taking into consideration the needs and requirements of the manufacturing, agri-fisheries, tourism, transport, and logistics sectors. The plan will be integrated into the overall transport plan of DOTr and the road infrastructure development plan of the Department of Public Works and Highways, while also taking into account the regional development thrusts of the National Economic and Development Authority.
The proposed corporation will collect only port fees and dues duly approved by Marina, and will not have a share in cargo-handling revenues or in those of any service providers contracted. It will also not have a share in any revenues generated by private ports.
Revenues collected by Philports will be used to develop, modernize, expand, operate, and maintain its ports. Philports, unlike PPA, will also be exempt from declaring corporate dividends to the national treasury in order to provide adequate resources for port development and modernization.
HB 8005 was referred to the Committee on Government Enterprises and Privatization last August 8.
