Review of Cabotage Law to make businesses in Mindanao competitive

The European Chamber of Commerce of the Philippines (ECCP) perceives the need to review the amended Cabotage Law to make businesses in Mindanao efficient and competitive. 

On July 21, 2015, former President Benigno Aquino III signed Republic Act (RA) 10668 which amended the old Cabotage Law of the Philippines, with the intention of enhancing Philippine competitiveness in international trade and lowering the cost of shipping cargo to and from the Philippines.

ECCP Southern Mindanao Business Council Chairman Antonio Peralta told media the amended Cabotage Law has no impact to the businesses in Mindanao since it was amended five years ago. 

“I am not saying that the amended Cabotage Law is a failure but we have to look at it why there is not much impact. Nag-amend ka nung 2015 at least look at the shipping cost in 2014 before that was amended. Was there meaningful change between 2014 and 2020?” Peralta said. 

Peralta cited shipping cost as challenges among businessmen wherein a large part of the cost is the price of oil. The other thing is the price of maintaining the operations because as ships need to provide capital expenditures for maintenance to make sure they are seaworthy and the cost of labor.

“These are the major cost-components that we are looking at. Ang problema is pricing bakit walang improvement ang shipping industry. The hindrance of any businessmen has always been shipping cost. At yan lagi ang naririnig ko,” he said.  

A review of the Cabotage Law, according to Peralta, should focus on the provisions that need further enhancement.

“A serious review of the Cabotage Law must be made to make our businesses much more efficient, competitive not only locally but for the rest of the world. Why? Because we also have the looming challenge of globalization. The cost of shipping from the point of origin is very low unya diri sa atoa is very high, do you think we have a chance of really competing? I don’t think so,” he added. 

The solution that Peralta sees is to open up this sector to competition by inviting foreign ships. 

“Because the point of contention is this and I can speak from experience. My foundation Freedom produces Nipa sugar and we have a very interesting discussion with a buyer in Sarawak. The thing that dawned on me is: how I am going to take this product to Sarawak? Then I have found out that I have to ship it out to Singapore then to Sarawak. There has to be more efficient way,” he said. 

The shipping cost and the amended Cabotage Law will be among the focus of discussions for the upcoming Business Conference on Logistics in the Visayas and Mindanao slated on January 31, 2020at Regus at the 6th floor of Felcris Centrale.

The conference, which aims to gather 50 to 70 participants, will also discuss the current problems in logistics and the opportunities for the traders in Mindanao. 

“We will also review what is going on as far as Cabotage Law in the Mindanao and Visayas economies. Why the shipping cost continue to be the same after all these years even with the amendments of the Cabotage Law. Are those amendments more or in favor of your companies or the general public?” Peralta said.

Shipping companies are expected to give their positions on Cabotage Law during the conference. 

“I would also like to hear out from their side. What seems to be the problem bakit hindi pa rin tayo efficient pagdating sa shipping. The purpose of the summit is to determine how far we have really gone. We have seen really the shipping industries such as freight forwarding companies would be a more vibrant economy if shipping cost is being lowered down so that we will be able to ship more, create greater economic activity in our farms and businesses,” Peralta said. 

Logistics is among important advocacies of ECCP. Peralta said at the end of the year, they will compile all the details and arrange a meeting with the appropriate government agencies such as the Department of Transportation and Communications (DOTC) and other regulatory agencies. 

“Because we cannot move to the next detail having the same said of laws,” he said. 

Officials and representatives from the Mindanao Development Authority (MinDA) is also expected to participate in the said conference as they have very good understanding about the shipping situation in Mindanao.