Customs brokers: PPA’s new monitoring system won’t cut logistics costs

The Customs Brokers Federation of the Philippines (CBFP) on Friday disputed the claim of the Philippine Ports Authority (PPA) that its new monitoring system in ports would bring down logistics and shipment costs.

Amid protests from several groups, the PPA suspended the implementation of the Trusted Operator Program-Container Registry and Monitoring System (TOP-CRMS).

However, PPA General Manager Jay Santiago said that the TOP-CRMS would lessen the expenses of exporters and importers.

Under the monitoring system, the container deposit fee of P10,000 to P30,000 will be removed. The PPA will instead charge a flat rate of P980 for insurance per container.

CBFP president Julita Lopez said that Santiago’s statement was "misleading and far from the truth."

"On the contrary, the stakeholders stand to pay more due to the TOP-CRMS. As a consequence, these excessive and unnecessary additional costs will be passed onto consumers," Lopez said.

"What the PPA deliberately omitted is the fact that these container deposits they are trying to eliminate are refundable to importers once the container is returned to the depot. Under the TOP-CRMS, this will not be the case anymore. The PPA will charge importers a service fee amounting to P980 per container on top of an undisclosed amount of insurance coverage in lieu of a container deposit, excluding value-added taxes," she added.

She said that even the choice of insurance provider would be left to the PPA.

Santiago denied this, saying that "the choice of insurance is not PPA’s."

"It is the choice of the importer/broker from a list of accredited insurance companies that need to pass stringent requirements, including capitalization, before being accredited," the PPA chief said when sought for comment. 

Santiago went on to say that, in concept, the container deposit should really be returned immediately upon return of the containers.

"But this doesn’t happen. A lot of complaints from customs brokers and importers relate to the extreme delay in the return of these container deposits, ranging from six months to more than a year before anything is returned, but with deductions and a lot of times not at all," he said.

"Based on reports and statistics, less than 10% of containers incur any material damage at the hands of importers before they are returned to the shipping lines. So the question is, how come the general sentiment of stakeholders is that it takes so long to give these deposits back, if at all," he added.

Lopez, however, claimed that the direct financial cost from the additional insurance fees, transaction fees, and trucking fees required by the new monitoring system "will result in an almost 50% increase in the cost of importing goods."

"In real terms, this will lead to a staggering additional annual import cost estimate of at least P35 billion," she said.

Santiago, meanwhile, accused "some sectors opposed to the program" of "deliberately spreading false information."

"We don't understand how P980 in replacement of the P30,000 container deposit will result in a 50% increase in the cost of goods. Or that the additional annual import cost will be P35 billion. That’s just unbelievable," he said.

"Obviously, numbers are being bloated to scare people and discredit the program. Anybody who knows basic mathematics would conclude that P980 is smaller than P30,000 under any circumstance. We are curious where they are getting their numbers because ours is based on actual statistics and documentation," the PPA chief said. —VBL, GMA Integrated News