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Truckers: amended PSA Act to usher in stiff competition

  • If it passes into law the amended Public Service Act will encourage entry of foreign-owned trucking companies and displace small- and medium-sized local players, according to the Confederation of Truckers Association of the Philippines
  • CTAP fears the entry of foreign truckers will “tip the balance of competition in favour of cash-rich foreign-owned and controlled trucking companies”
  • The group said there is no shortage in equipment in the trucking sector
  • To boost competitiveness, CTAP said “operational stumbling blocks at the ports” be removed

The Confederation of Truckers Association of the Philippines (CTAP) fears passage of proposed amendments to the Public Service Act (PSA) will cause “tremendous” economic fallout, ushering in entry of “cash-rich” foreign truckers that would displace small- and medium-sized local players.

In a position paper submitted to Senate Public Service Committee (SPSC) chair Senator Grace Poe dated June 24, CTAP urged a review of the impact of Senate Bill 2094 on the local trucking sector.

The bill aims to clear “the ambiguity surrounding the interchangeably used terms ‘public utility’ and ‘public service,’” and limit public utility to just three services—distribution of electricity; transmission of electricity; and water pipeline distribution and sewerage pipeline systems.

Under the bill, excluded from the definition of public utility are transportation, telecommunications, broadcasting, and other public services. Their exclusion will effectively allow 100% foreign ownership in these industries as they will no longer be considered public services or be covered by the 60%-40% ownership principle under the Constitution.

Poe earlier said the amendment of the PSA is a way to improve basic public services and lower their cost.

But CTAP said that “being an industry sector that is vertically integrated into the economy, the economic fallout of Senate Bill 2094 to the local trucking industry would be tremendous.”

There is no shortage of equipment in the trucking sector, CTAP noted, further claiming that “operational setbacks at the ports like the inefficient handling containerized cargo, the unregulated operation of international shipping companies and the truck ban among others are the ones causing delivery delays and the spike in the country’s trucking rates, raising the country’s cost of importation.”

CTAP said “allowing foreign majority equity ownership in the local trucking industry will tip the balance of competition in favour of cash-rich foreign-owned and controlled trucking companies.”

The group said this would eventually displace small- and medium-sized local trucking companies.

It noted the transport sector is currently facing challenges in complying with the government’s fleet modernization program. CTAP claimed that while allowing foreign players in the country’s trucking sector would modernize the industry, “its impact to an industry that’s not encountering equipment shortage, but only port operational setbacks and hindrances, will displace cash-strapped small and medium trucking companies that employ over a million Filipinos.”

The group said “in an industry with no established level playing field safeguards for its players, the small players will hardly have the opportunity to compete and grow in such as market-driven sector.” Not only will local business interest be taken over by foreign-owned and controlled corporations, but Filipinos could lose their jobs as well, it added.

Moreover, the group said allowing foreign players to dominate the local trucking industry will endanger national security and patrimony.

It explained: “The trucking industry is a vital component of the economy, even as it serves as the nation’s lifeblood, in time of peace and emergency. Under normal conditions, the trucking industry facilitates the delivery of raw materials and finished products to and from the manufacturers to the local and international markets. And in times of emergency, it secures the unfettered delivery of much needed emergency supplies and equipment, relief goods and medicines to secure the nation’s public safety.”

“Perhaps, the Senate Public Service Committee can consider National Patrimony first, before it gives majority foreign equity the green light to operate in the local trucking industry,” the group said.

CTAP’s counterproposal

To help safeguard competitiveness and viability of local trucking companies, CTAP suggested several measures for SPSC to consider.

The first is uplifting the service capability of local truckers to respond to current and emerging transport needs “by removing, or at least rationalizing, the operational stumbling blocks at the ports, if only to relieve the local truckers from the unreasonable operational policies of private port operators and international shipping companies.”

Another request is to exempt the trucking sector from the government’s modernization program, which orders the phase-out of trucks more than 15 years of age.

The group suggested that instead of basing roadworthiness on the age of trucks, the government should enforce the motor vehicle inspection system (MVIS) program as a better way to determine a truck’s safety level on the road.

Moreover, CTAP recommends giving incentives to local truckers such as tax holidays similar to those given to companies in Freeport zones, as well as easing the importation of new equipment.

Aside from truckers, another sector from the transport industry has also raised its concerns over some provisions of SB 2094.

READ: PSA bill should include sea, air ports as ‘critical’ infra, say domestic lines

In a position paper last April, the Philippine Inter-island Shipping Association (PISA) suggested that SB 2094 should include seaports and airports as part of the “critical infrastructure” system to complete the supply chain.

PISA also expressed concern that the bill’s reciprocity provision compromises the viability of critical infrastructure, and reciprocity should thus be on a “one-on-one basis” within the same specific industry sector.

SB 2094 is pending second reading; its counterpart measure in the Lower House, House Bill 78, passed third and final reading in March 2020. SB 2094 substitutes various Senate bills filed in the Senate to amend the PSA, and takes into consideration HB 78.

Last March, the SPSC endorsed the approval of SB 2094, and on April 13, President Rodrigo Duterte certified the PSA bill as urgent, which removes the requirement to have separate days for the three readings and allows the bill to be approved on the same day. It also removes the requirement of printing/distribution three days before the passage of the bill. The bill underwent several interpellations from March to June. – Roumina Pablo

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