House panels OK bill to open interisland shipping to foreign vessels

A bill liberalizing the entry of foreign vessels to Philippine ports is closer to becoming a law after three committees in the House of Representatives voted to approve the substitute bill that consolidates nine proposed measures to relax cabotage restrictions in the country.

 

The committees on Trade and Industry, Ways and Means, and Transportation jointly adopted and approved the Senate version of the measure allowing foreign vessels to transport and co-load foreign cargo for domestic transshipment before Congress went on break last week. 

 

Davao del Norte Rep. Antonio Rafael Del Rosario, vice chair of the House Trade and Industry panel, said the House only made minor amendments to the Senate version of the proposed legislation.

 

Plenary debates on the measure will begin after session resumes in the House on May 4. 

 

Under the 57-year old Tariff and Customs Code of the Philippines, the right to engage in Philippine coastwise trade is limited to vessels carrying a certificate of Philippine registry.

 

The provision was meant to protect the domestic shipping industry from foreign competition and preserve domestically-owned shipping infrastructure for national security purposes.

 

Restrictive cabotage policy

 

But Las Piñas Rep. Mark Villar, one of the authors of the consolidated measures, said it is time to liberalize the entry of foreign vessels in Philippine waters to promote competition.

 

“Various studies showed that the high cost of domestic shipping services is attributed to the lack of meaningful competition in the industry. In fact, recent data from the Maritime Transport Authority (MARINA) provide evidence of concentration of domestic operation in the hands of few players, and this lack of competition is exacerbated by a restrictive cabotage policy as foreign vessels are not allowed to engage in inter-island shipping," he said.

 

Ways and Means vice chairperson AAMBIS-Owa party-list Representative Sharon Garin said allowing foreign ships to carry goods to and from local ports will lower the cost of shipping and decongest Philippine ports.

 

“Studies show that the expensive cost of domestic shipping is caused by lack of true competition in the domestic shipping industry,” she said in a statement.

 

Provisions

 

Under the bill, co-loading shall refer to arrangements between two or more international or domestic sea carriers, whereby a sea carrier bound for a specified destination agrees to load, transport and unload the container van cargo of another carrier bound for the same destination. 

 

From a foreign port, a sea carrier shall be allowed to carry a foreign container van cargo to its domestic port of final destination, after being cleared at its port of entry. 

 

In addition, the bill provided that a sea carrier arriving from a foreign port shall be allowed to carry foreign container van or cargo by another foreign vessel calling at the same port of entry to domestic port of final destination of such foreign cargo.

 

The proposal to liberalize the entry of foreign ships is one of the priority measures of the 16th Congress and the Aquino administration. — Xianne Arcangel/JDS, GMA News