An executive order will take the place of a proposed joint administrative order (JAO) designed to regulate charges of foreign shipping lines operating in the Philippines, giving the policy “more teeth”.
In a speech during the 2nd Logistics Services Philippines Conference and Exhibit (LSPH) on July 15, Trade Secretary Ramon Lopez said the change addresses “institutional arrangements required to regulate the high shipping cost and address the problem of port inefficiencies” and establishes the legal basis for the policy.
He said the JAO—which should have been signed by the heads of the Department of Trade and Industry (DTI), Department of Transportation (DOTr), and Department of Finance (DOF)—needs “more teeth” and an EO would “spell the difference and help us implement in greater force (its) provisions…”
Presented to industry stakeholders for comments last February and targeted for launch during the 2nd LSPH, the draft JAO is a proposed joint agreement intended to regulate origin and destination charges imposed by foreign carriers, and to lessen or eliminate port congestion. The JAO is part of DTI’s commitment to stakeholders during the agency’s first LSPH held last December to find measures to address the high cost of international shipping, a frequent complaint among stakeholders.
Lopez noted that the draft JAO, finalized last May, had already been signed by him and Transportation Secretary Arthur Tugade. Finance Secretary Carlos Dominguez III supposedly had issues regulating the shipping line rates.
The trade chief, in a press conference during the same event, said the draft EO “will specify [which agency] will really be accountable for the setting, or at least having better control on shipping rates.”
Bureau of Customs (BOC) deputy commissioner Atty. Edward James Dy Buco, during a congressional hearing last year and in a speech last April, had said the customs bureau could already regulate international shipping lines, as well as other third party logistics service providers, following the passage of the Customs Modernization and Tariff Act (CMTA) in 2016.
Specifically, Section 1226 (Supervision and Regulation of Third Parties) of CMTA states that third parties such as foreign carriers, freight forwarders, and container yards, among others, transacting with BOC on behalf of importers and consignees shall be treated equally as true importers or consignees.
Philippine Multimodal Transport and Logistics Association, Inc. president Marilyn Alberto, in a speech during the 2nd LSPH said BOC “has agreed to be the lead agency in implementing the JAO” pursuant to Section 1226.
Asked if an EO is really needed even with the CMTA already in place, Dy Buco, in a text message to PortCalls on July 16, said, “Yes, an EO is stronger.”
Meanwhile, Lopez said the EO will focus on shipping rates as congestion in Manila ports has already been addressed even without the signed JAO since Customs already controls movements inside Manila ports.
This, as the BOC released early this year several orders, such as those governing the transfer of overstaying containers and fast-tracking of the disposal of abandoned cargoes, to help address the then high utilization rates at Manila ports. This was aside from initiatives of other government agencies and the private sector to decongest Manila ports.
Asked about the timeline for the drafting of the EO, Lopez said, “Give us a month’s time, we will have a draft EO.” He acknowledged though that they have no control over the signing of the order, as this will be done by the President. – Text and photo by Roumina Pablo