MANILA: Smaller ports in the Philippines are bracing for rising container throughput following government approval of an act that liberalizes the country’s cabotage law and allows foreign carriers to participate in the domestic transport of cargo.
President Benigno Aquino recently signed the landmark Philippine Competition Act and the Foreign Ships Co-Loading Act, which amends the 50-year-old cabotage law. Once gazetted the law will take effect within 15 days.
The amendments to the law will lower shipping costs for export and import shipments by allowing foreign-flagged vessels to carry imported cargo directly to the final Philippine port of destination, according to a statement by Aquino.
Among other changes, the amended law will allow for the transport and co-loading of foreign cargos within Philippine waters by foreign vessels and empty containers from abroad will be able to be transshipped between two domestic ports.
After signing the act into law in July, Aquino took the opportunity to promote his “man of the people” image. “Through these two laws, we are changing the crooked ways of a lack of competition in business which do not benefit the people,” he said in a statement.
But the need to reform its shipping laws is more than just an attempt by the Philippine leader to burnish his populist credentials. The Association of Southeast Asian Nations will form a unified common market in December where trade barriers will be reduced with a free flow of goods, services, investment and skilled labour.
