Industry stakeholders and port users are strongly against the implementation of Philippine Ports Authority (PPA) Administrative Order (AO) No. 04-2021, saying the order should be scrapped for duplication of tasks, discouragement of business and investment, lack of transparency, and its impact on transport and consumer costs.
Opposition to PPA AO 04-2021, which prescribes the policy governing the registration and monitoring of containers, was expressed by participants at a recent multi-stakeholder meeting organized by the Association of International Shipping Lines, Inc.
The order sets the policy on the registration and monitoring of containers entering and leaving PPA ports, including the scheduling, loading, unloading, release and movement of all containers.
It aims to generate a record of accountability to “enable PPA to monitor the movement of containers from the time of entry, discharge, return and storage, and re-export,” the AO said.
Further, the order “shall apply to all containers originating from foreign ports that will be unloaded at government and/or private ports under the administrative jurisdiction of the PPA.”
At the question and answer portion of the meeting attended by members from affected sectors, one attendee said that too many agencies were already monitoring containers, and PPA could be encroaching into the jurisdiction of the Bureau of Customs (BOC).
“Dala-dalawa na yung tag na ire-remove sa container? May Customs meron pang PPA… tapos may tag pa ng DA (Department of Agriculture)?” he asked.
Vicente Suazo Jr., a former PPA official and currently a shipping consultant, concurred that the order duplicates the tasks being done by BOC. He added that PPA should just share data with BOC without needing to establish its own monitoring system.
Suazo, one of the two resource speakers at the meeting, added that PPA cannot contribute to economic growth, one of its mandates, when it is discouraging doing business in the Philippines through such “unnecessary impositions.”
Another participant said the AO contradicts Republic Act No. 11032 or the Ease of Doing Business Act by adding another layer to business transactions.
“Right now all these proposals of PPA are already in place. Meron na ang Bureau of Customs. Meron na ang port operators. This is just duplication,” the attendee said.
AISL director Joselito Ilagan, who was the other meeting resource speaker, said “this is something unacceptable to us because [we can see] what would be the impact operationally—disastrous!”
Ilagan during his presentation pointed out that the program carried potential adverse impacts for customers, transportation providers and the community.
Customers face pass-on charges due to the increased logistics cost including from installing the tracking device and the route deviation of trucks.
Transportation providers would likewise feel the effects in terms of the additional cost of deviating the movement of containers; fewer round trips due to the additional transaction time; data privacy issues due to the centralized truck registration database and dispatch; and ad-hoc charges from using the container monitoring facility for attaching and detaching and other incidental charges for truck drivers.
To the community, AISL foresees congestion at terminals, inland depots, and roads as truck routes get deviated, as well as an environmental impact from the additional carbon footprint.
Ma. Flordeliza C. Leong, vice president at the Philippine Exporters Confederation, Inc. (PHILEXPORT), expressed support for the move to scrap the policy, citing duplication, administrative and logistics complications and higher cost of doing business for exporters.
All the participants stressed that the AO would only serve to add to the burdens of Juan de la Cruz, the ordinary Filipino. They noted that it would deal a crippling blow to industry and that its impact would be particularly harsh on importers and end-users.
“Cost factor alone (will be) shared by all port users (and) we’re all going to be affected and (this will) set us back decades,” said one of the participants.
It was also claimed that the order lacked transparency or a clearly defined purpose, and fears were raised about the possibility of hidden or additional costs coming to light later on.
Another participant pointed out that the measure would be problematic for containers brought to domestic ports that are not under PPA jurisdiction, as it would open up the question of how untagging would be done unless the container is brought back to Manila. She said this indicated that the program may not be well thought out.
It was also brought up that the container monitoring system runs contrary to free trade market practices, discouraging negotiation, business relationships, and performance review.
Additionally, the program is seen to worsen yard space issues, especially during the peak season. It was further pointed out that PPA AO 04-2021 comes just as the Philippines is suffering serious delays in shipments because of the shutdowns in China. The measure would also “ensure that we remain to be the most expensive country to do business in, especially in the ports.”
The participants agreed that the order should be scrapped and be immediately brought to the attention of the government, especially the Anti-Red Tape Authority and the Department of Trade and Industry, for its “very bad effect for all commodities sold in the market.”
PPA AO 04-2021, which took effect on October 19, 2021, has just taken a further step toward implementation with the recent awarding of the contract to the winning bidder.