by Gico Dayanghirang
PLDT has recently announced that it is investing in a fiber optic link that would increase communication carrying capacity considerably and more efficiently. Competition indeed has the beneficial effect of compelling businesses to continuously innovate. This is to provide better products and services at more affordable cost to consumers.
But this hasn’t always been the case in the Philippines until lately. Immediately following World War ll, policy capture has been the order of the day in this country. Back then, influential businesses, among them PLDT, have been able to secure from government legal protection from competition.
Those who are old enough then should be able to recall the consequence of monopoly. In the case of PLDT the line is always busy. Without competition a monopoly has no incentive to improve its product or service. Monopolies have proliferated even more during the Marcos dictatorship where favored cronies have easy access to policy.
This is until former president Cory Aquino has come to power and has promptly liberalized the economy. I’ve been a party to this process as a member of the 8th Congress. Competing industries have since prospered giving only the best to their customers. This precisely is the reason why PLDT is investing in a fiber optic link to please customers and secure more patronage in a now highly competitive telecommunication industry.
The bad news is that there are still a couple of important industries that remain protected. These are the shipping and airline industries. Foreign cargo vessels are only allowed to unload and pick up cargo at the port of Manila and nowhere else in the country. Local shipping companies have the monopoly of picking up cargo coming from abroad which has been unloaded at the port of Manila for delivery to its final destination elsewhere in the country such as to Cebu or Davao City. They also have the monopoly of picking up cargo destined for abroad from all over the country for shipment to the port of Manila where foreign cargo vessels may pick it up for delivery to its final foreign destination.
This double handling necessarily adds to cost. Moreover, the exclusive privilege is also being abused. Shipping cargo from Davao City to Metro Manila is two times more expensive than shipping the same cargo by foreign carrier from Metro Manila to Thailand which is three times farther away. This makes export products from outside of Metro Manila such as from the Visayas and Mindanao less competitive. Foreign vessels must therefore be allowed to deliver cargo to and pick up cargo from any port in the country in order for the export industries of the Visayas and Mindanao to prosper.
The same goes for the airline industry. Foreign airlines carrying passengers from abroad may only land at NAIA. They’re not allowed to fly their passengers directly to their final destinations in the Philippines such as to Metro Cebu or Davao City. Local destinations are reserved for local airlines.
The Philippines is endowed with superior tourist resources. The country is also the nearest tourist destination in the ASEAN region from tourist outgoing countries such as Japan, Taiwan and China. Yet, tourists from these countries prefer to go to Thailand and Malaysia because coming to the Philippines is more costly.
Most tourist destinations in the Philippines are in the Visayas and Mindanao. But the cost and inconvenience of having to take a double ride to these destinations are driving tourists elsewhere in the ASEAN region. Some tourist have to stay overnight in Metro Manila before they can take a connecting flight to their final destination in the Visayas or Mindanao.
I recommend that congressmen from the Visayas and Mindanao take up the cudgel for their constituents with regards to the domestic shipping and airline monopolies. They must mobilize a strong lobby in congress to eliminate these last remaining legacies of post-war Philippines. The object is not to secure privilege but to ensure fairness which is always good for everyone.
