The House of Representatives has approved on second reading a Palace-priority measure that seeks to liberalize the entry of foreign vessels between ports in the country.
Through viva voce voting, a majority of the lawmakers passed House Bill 5610, or “An Act Allowing Foreign Vessels to Transport and Co-load Foreign Cargoes for Domestic Transshipment and for other Purposes” on Tuesday night.
Nacionalista Party Rep. Mark Villar of Las Piñas City, chairman of the House Committee on Trade and Industry, one of the principal authors of the bill, said liberalizing the carriage of cargoes by foreign vessels within Philippine waters will ultimately benefit the Filipino people.
“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 provide evidence of concentration of domestic operation in the hands of a 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.
Party-list Rep. Sharon Garin of Aambis-Owa, vice chairman of the House Committee on Ways and Means, also coauthor of the bill, said local traders and consumers will benefit from lower cost of domestic-shipping services with the approval of the bill.
The House of Representatives is expected to approve the bill this month, as the Senate version of the measure—filed by Sen. Paolo Benigno “Bam” Aquino IV—already approved in the final reading.
Centrist Democratic Party Rep. Rufus Rodriguez of Cagayan de Oro, also the principal author of the bill, said the measure intends to promote competition in the shipping industry by allowing foreign vessels to transport passengers and cargoes between ports within the country’s waters.
Under the bill, coloading shall refer to arrangements between two or more international or domestic sea carriers, whereby a sea carrier bound for a specified destination agrees to load, transport and unload the container van cargo of another carrier bound for the same destination.
Currently, the 57-year-old Tariff and Customs Code of the Philippines said the right to engage in the Philippine coastwise trade is limited only to vessels carrying a certificate of Philippine registry.
The measure seeks to assist importers and exporters in enhancing their competitiveness in the light of intensifying international trade and to lower the cost of shipping containerized export cargoes from Philippine ports to international ports and containerized import cargoes from international ports.
The bill added that vessels arriving from foreign ports shall be allowed to carry a foreign container van cargo to its domestic port of final destination, after being cleared at its port of entry.
Also, the measure said that arriving from a foreign port, a vessel shall be allowed to carry foreign container van or cargo by another foreign vessel calling at the same port of entry to domestic port of final destination of such foreign cargo.
The bill added that the commissioner of the Bureau of Customs (BOC), upon such reasonable conditions, may clear any foreign vessel for any domestic port and authorize the conveyance therein of a foreign container van containing foreign cargo brought from aboard upon such foreign vessel; allow a foreign vessel to take a foreign container van containing import or export articles or cargo at any Philippine port and convey the same upon such foreign vessel to foreign port; authorize the transshipment of such foreign cargo intended for export through another Philippine port of its conveyance by another foreign vessel to cargo’s foreign port of final destination.
The BOC, commissioner may also impose penalties to foreign ship operators violating this act and take measures to address illegal activities, including smuggling, the bill said.
“The BOC, upon due notice, hearing and determination of the existence of any breach or violation of the provisions of this act or any rules and regulations issued pursuant to thereto, shall have the power and authority to impose penalty on any foreign ship operator in an amount to be determined in implementing rules and regulations,” the measure added.
“Foreign ship operators shall submit their cargo manifest to the Philippine Ports Authority to ensure that no domestic cargoes are carried by foreign ship. No foreign vessel shall be allowed to carry any domestic cargo or domestic van, whether loaded or empty, even if such domestic container van may contain foreign cargo,” the bill said.
The measure also provides that the foreign vessels operating within the territorial jurisdiction of local government units shall be exempt from taxes, fees and other charges that can be levied by LGUs under the Local Government Code of 1991.