DTI sees reduced prices of goods after LGU pass-through fee suspension

The Department of Trade and Industry (DTI) expects President Ferdinand ”Bongbong” Marcos Jr.’s order to suspend the collection of “pass-through" fees by local government units (LGUs) on vehicles transporting goods and merchandise would translate to lower prices, which would benefit consumers.

At the Saturday News Forum in Quezon City, DTI Undersecretary for Communications and Legislative Affairs Maria Blanca Kim Bernard-Lokin said the issuance of Executive Order No. 41 “will directly address the plight and the sentiments of consumers.”

EO 41, signed September 25, prohibited all LGUs from collecting toll fees on all motor vehicles transporting goods or merchandise while passing through any national road and other roads not constructed and funded by the LGU.

Moreover, the order “strongly urges” all LGUs to “suspend or discontinue the collection of fees such as, but not limited to, sticker fees, discharging fees, delivery fees, market fees, toll fees, entry fees, or Mayor’s Permit fees, that are imposed upon all motor vehicles transporting goods and passing through any local public roads constructed and funded by said LGUs.”

Lokin said EO 41 will help lower the cost of transporting goods “so... when the product reaches them [consumers], the price would be lower or somehow be affordable.”

The Trade official said that, on average, logistical costs —which include pass-through fees collected by LGUs, and fuel, among others— account for 30% of the actual retail price of goods sold in markets.

“So 30% of the actual cost of the products we buy, about 30% of that, on average, comes from logistical costs,” Lokin said.

“So it would be a great deal if that pass-through fees would be removed because, in turn, it will reduce the cost of goods that we buy in the market,” she said.

For her part, Alliance of Concerned Truck Owners and Organizations (ACTOO) Vice President Rina Papa said that pass-through fees accounted for about 30% of truckers' expenses.

“If that would be removed, of course, we won’t claim there will be a direct translation in terms of lowering the cost of products, but definitely it will contribute substantially,” Papa said.

The truckers group official added that in the City of Manila alone, the fee collected per truck averages P2,000 up to P2,500 monthly.

“So multiply that by 12 months, in one truck only, the additional cost is almost P30,000,” Papa said.

“Other LGUs would impose on an annual basis. Some would impose P800, P675. It varies because they [LGUs] create their own designs,” she added.

However, ACTOO added there were factors other than pass-through fees that influence the price of goods such as fuel prices.

"Hindi natin icli-claim there is a direct translation in terms of cost of products. But definitely it will contribute substantially," said Papa in Bernadette Reyes' Saturday 24 Oras Weekend report.

The EO indicated that the unauthorized imposition of pass-through fees significantly affected transportation and logistics costs, which are often passed on to consumers as they bear the burden of paying for the increase in prices of commodities.

“To uphold the welfare and advance the best interest of the Filipino people, it is the overarching policy of the Administration to consolidate all essential components within the value and supply chain and reduce the costs of food logistics, which play a pivotal role in effectively tempering the inflation rate in the country,” the EO said.

The EO also said reducing transport and logistics costs is one of the pillars of the Eight-Point Socioeconomic Agenda of the Marcos administration. — DVM, GMA Integrated News