SCMAP Perspective is our fortnightly column on PortCalls, tackling the latest developments in the supply chain industry, as well as updates from within SCMAP. On this column, Henrik Batallones looks at pending legislation that are set to impact the competitiveness of supply chains in the Philippines.
Legislative priorities
Before stepping down as secretary of the Department of Trade and Industry, Fred Pascual released a statement reiterating the agency’s support for the passing of the International Maritime Trade Competitiveness Act, citing how it would help address the issue of unreasonable shipping charges that continue to affect importers and exporters.
We at SCMAP have also long called for the passing of the measure, and as a new legislative session goes underway, we echo the call of various stakeholders for the passing of this bill. It would provide necessary safeguards that would ensure reasonable and competitive logistics costs, allowing businesses across the supply chain to be more competitive.
These safeguards include a requirement for port operators, carriers and forwarders to publish regular shipping charges and fees in a newspaper of general circulation, as well as to report these rates to the Maritime Industry Authority (MARINA). The agency would also be mandated to regulate the application of local charges. The culminating results should be more predictable charges, and more optimal logistics costs, where the competitive advantage of stakeholders move from price to service levels and added-value services.
While most of the recent State of the Nation Address focused on bolstering domestic production to reduce reliance on imports, it still is a fact that manufacturers in the country rely on raw materials from outside the country. These are subject to these shipping charges that the International Maritime Trade Competitiveness Act aims to oversee. While efforts are underway to improve our domestic sourcing and production capacities, the passing of this law would help businesses be more competitive and go some way to lowering prices for Filipinos.
We are also keen to see the progress of another proposed law, which would split the regulatory and commercial functions of the Philippine Ports Authority. One agency handling both duties continues to pose a conflict of interest that contributes to high logistics costs. The split should lead to greater transparency and oversight, and allow the concerned agencies to focus on their mandates without being blinded by financial considerations. In the proposed law, the new Philippine Ports Corporation would focus solely on modernizing our ports, ensuring port operators truly add value to the facilities they take over, while bringing far-flung ports to the 21st century. Meanwhile, rate-setting responsibilities will fall to MARINA.
In our struggle to modernize our supply chains and make them more competitive, we should continue to push for change on multiple fronts. The passing of critical legislation would provide legal support to regulatory and policy reforms, making them more sustainable and not subject to the whims of whoever is in power. This goes hand-in-hand with initiatives that boost our supply chain capacity and capability, such as the continued push for transport infrastructure, and efforts to boost education, like the introduction of an e-commerce track for senior high school students – incidentally also one of the last duties performed by former DTI secretary Pascual.
Meanwhile, for us in the private sector, it is up to us to find more ways to improve our operations and deliver more for our customers, partners and employees, whether it be through pursuing innovative processes and strategies with the aid of new technologies, or upskilling our workforce to ensure their preparedness for whatever could come, or by further embracing supply chain sustainability. Making our supply chains more competitive – and, as a result, making our businesses more competitive and making the lives of every Filipino better – is a long-term group effort.