The House of Representatives has approved on second reading a priority measure of the Aquino administration that makes it easier for foreign vessels to engage in inter-island shipping withing the Philippines.
Voting via viva voce or voice vote, the majority of lawmakers on Tuesday night approved House Bill 5610 or the proposed law allowing foreign vessels to transport and co-load foreign cargoes for domestic transshipment.The approved bill was released to reporters on Wednesday.
The measure is expected to become a law as soon as the counterpart bill in the Senate, filed by Sen. Paolo Benigno “Bam” Aquino IV, has been approved on third reading.
Co-loading under HB 5610 refers to the arrangements between two or more international or domestic sea carriers – meaning a ship bound for a specified destination agrees to load, transport and unload the container van cargo of another carrier bound for the same destination.
A vessel from a foreign port will be allowed to transport a container van cargo to a final port of destination in the Philippines after being cleared at its port of entry.
In addition, a ship originating form a foreign port will be allowed to carry any container van or cargo by another foreign vessel, calling at the same port of entry, to the same final port of destination in the Philippines.
Under the 57-year old Tariff and Customs Code of the Philippines, the right to trade within Philippine waters is limited only to vessels of certified 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.
But Las Piñas Rep. Mark Villar, one of the authors of the consolidated measure, 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 Rep. Sharon Garin said allowing foreign ships to carry goods to and from local ports will not only result in cheaper cost of shipping, it will also decongest Philippine ports.
