SHIP owners are ready to buy the necessary oceangoing vessels if the state-owned grains firm will give them the chance to transport the millions of tons of rice imported by the government.

Filipino Shipowners’ Association president Dario Alampay told reporters the group’s members are capable of buying vessels that the National Food Authority (NFA) can use.

“We have been knocking on the government’s [doors] to give Philippine shipping [firms] a chance to carry Philippine government-controlled cargo like [those of the] NFA’s,” Alampay said.

He explained that through the years, the NFA has been using the cost and freight (C&F) scheme, where the seller makes arrangements for the freight-cost aspects of the transaction.

“But if the Philippines will buy rice on FOB [freight on board], those who will arrange for the carrier will be the buyer, which is the Philippine government,” Alampay said, adding that they can have a crack at the market only after the NFA changes its import scheme.

For taxes alone, the national government allocates between P32 billion and P39 billion for these imports through the Tax Expenditure Funds.

“But ever since, their [NFA’s rice] importation scheme is on C&F,” he added.

Alampay said they’ve had a number of discussions with the NFA on the issue but they were always given the same reasons, such as the state agency’s fears that the rice may not arrive on time.

He said, however, that the government can initially give domestic ship owners a low volume of 300,000 metric tons (MT).

“If we can do that, if both parties are confident, then we can extend that arrangement; we should think of the deal on a long-term basis,” he said.

The NFA imports about 1.5 million MT of rice per year, but it allows the private sector to also import up to 300,000 MT. The Philippines is the world’s biggest rice importer.

The Maritime Industry Authority (Marina) has been asking major government agencies such as the NFA to use Philippine vessels and help the industry compete with international vessels.

Marina, in talks with the NFA, invoked a Marcos-era law, Presidential Decree 1466, which orders all government entities to use transportation services only from locally registered ships.

The NFA agreed with Marina’s proposal, but the plan fizzled out even before it started as local shipping firms failed to secure charter agreements with shippers abroad, citing the transaction’s high cost.

When bidding for a project, shipping firms would normally assign all operational costs, including the 4.5-percent withholding tax in its freight rates, to the hiring entity.