A bill, which is supported by three big business groups, seeks to decouple the regulatory and commercial functions of the Philippine Ports Authority and transfers the regulatory function to the Maritime Industry Authority (MARINA).
Because of the ‘problematic mandate’ of the Philippine Ports Authority to generate revenues while regulating port operations in the country, this has led to the Philippines having the highest cargo handling cost in ASEAN, which undermines its global competitiveness.
This was the issue raised by three big business groups—the Philippine Chamber of Commerce and Industry, Philippine Exporters Confederation Inc. and the Supply Chain Management Association of the Philippines—which expressed support for the decoupling of PPA functions. They submitted a signed statement released on Thursday by PCCI President George T. Barcelon, Philexport President Sergio R. Ortiz-Luis, Jr., and SCMAP President Pierre Carlo Curay.
They also threw their support to a pending House Bill 1400 of Bagong Henerasyon Partylist Rep. Bernadette Herrera -Dy or the proposed Philippine Ports Corp. Act, which decouples PPA’s regulatory and commercial functions and converts it into the Philippine Ports Corp. (Philports), a government-owned and controlled corporation under the Department of Transportation. It will be tasked with owning, developing, managing and operating public ports within the old PPA system and collect the port fees and duties approved by MARINA (Maritime Industry Authority).
The bill transfers the regulatory functions of PPA to the MARINA.
At the same time, the PCCI, Philexport, and SCMAP said the government should look into the current management and regulation of ports in the country, Business Mirror reported.
The 2017-2022 Philippine Development Plan proposed splitting the regulatory and operations functions of port authorities and creating a single entity to regulate the ports in a bid to boost efficiency and competitiveness by permitting inter-port competition and encouraging more participation from the private sector.
Conflict of interest
“This policy reform will address not only the conflict of interest, but more importantly, the competitive neutrality issue hounding the port authority. Competitive neutrality recognizes that significant government business activities in competition with the private sector should not have a competitive advantage or disadvantage simply by virtue of government ownership and control,” they said.
“In PPA’s case, the competitive neutrality issue centers on its power to regulate against competition to protect its commercial interest, sometimes at the expense of public interest,” they added.
Meanwhile, the business groups also pushed for the revocation of the Letter of Instruction No. 1005-A, which allows PPA to have a 10- to- 20 percent share in cargo handling revenues.
“This is a case of the regulator, PPA, benefiting from its own regulation. As a public enterprise, PPA remits billions to the Bureau of the Treasury, even during the pandemic when trade was down by more than 30%, but in the process makes the Philippine economy uncompetitive with high port charges,” they said.
Since March, shipping firms have increased their freight charges by an average of 25 percent.
The PPA, formed under Presidential Decree (PD) No. 505 amended by PD No. 857, is mandated to facilitate the planning, development, financing, operation and maintenance of ports or port districts nationwide.
PPA previously announced that passengers who used its facilities increased by 144 percent in the first six months of the year, following a rebound in domestic tourism, travel, and trade. Passenger volume during the six-month period reached 26.053 million, while cargo throughput totaled 125.485 million metric tons.
Tags: #PPA, #HB1400, #highestcargohandlingratesinASEAN