Friday, October 22, 2021
HomeMaritimePSB pushes use of loan facility for shift to CFR/CIF

PSB pushes use of loan facility for shift to CFR/CIF

THE Philippine Shippers Bureau (PSB) recently re-introduced the use of a loan facility that will help shippers shoulder the cost of shifting to Cost and Freight (CFR) or Cost, Insurance and Freight (CIF) from the traditional Free on Board (FOB) payment mode.

PSB executive director Atty. Pedro Vicente Mendoza said the bureau, in a bid to intensify campaign for exporters to adapt the mode of payment, has been coordinating with lending firm Small Business Guarantee and Finance Corporation (SBGFC) to make available the facility.

According to him, initial surveys conducted by PSB reveal that a major hindrance in shifting from FOB to CFR/CIF is the lack of funds to pay for the freight cost of export cargoes.

The use of CFR and CIF gives exporters the choice and flexibility in making the best transport arrangements for export cargoes instead of complying with buyers’ demands under FOB.

The SBCFG may lend shippers money they need to pay the shipping lines or advance payments in behalf of shippers. The lending company may also act as a guarantor to assist shippers, exporters or manufacturers to avail of loans from local banks, Mendoza added.

He, however, admitted that since the introduction of the credit facility, there has been no major shift to the CFR/CIF payment mode. “We cannot expect a full turnaround or shifting in a span of one year.

They (shippers) still have to decide and compute all their costs.They also have to consider the reaction from their buyers if they shift,” Mendoza pointed out.

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