THE Philippine International Seafreight Forwarders Association (PISFA) is sending its members this week a questionnaire on proposals to increase the minimum capital requirement for freight forwarding businesses.
Put forward by the Philippine Shippers Bureau (PSB), the proposal stems from the industry’s desire to make the capitalization requirements more reflective of the economic times. Although comprising only about 25% of the total number of freight forwarders in the Philippines, PISFA members control the bulk of the business.
It is also the only association recognized by the bureau. The PISFA results will be tabulated and presented during a membership forum this month, said association president Erich Lingad.
The forum aims to revisit details of the draft administrative order (AO) and deliberate whether its contents still apply to the present situation. PISFA is also expecting the PSB to conduct its own public hearing on the subject.
“Some major questions would have to be answered. Does the majority want an increase in the minimum required capitalization for forwarders?
If so, how much? What would be the phasing period for the existing companies to achieve the required minimum capitalization?” Lingad pointed out.
The draft AO proposes raising the minimum capitalization to P5 million for both non-vessel operating common carriers (NVOCCs) [from the current P500,000] and cargo consolidators (from P400,000). PSB is also planning to collapse into one category the currently separate categories of International Freight Forwarder and Breakbulk Agent.
Under the proposal, the new category will have a minimum paid-up of P3 million. Current requirements are P300,000 and P250,000, respectively. Domestic freight forwarding firms, on the other hand, would still be required a minimum paid-up of P250,000.
Stockholders must also be 100% Filipino citizens. The proposed minimum amount of insurance coverage is: P5 million for NVOCCs, P3 million for international freight forwarders, and P250,000 for domestic freight forwarders.
The draft AO also contains amended requirements for new applicants and penalties and fines for non-compliance with PSB rules.
Lingad said the draft was actually prepared years ago and was already presented at a public hearing but no decision came of it. – Maritess R. Mesias