The Philippine Exporters Confederation Inc. (Philexport) on Monday warned against any move to insert the pre-shipment inspection (PSI) scheme into the proposed Customs Modernization and Tariff Act (CMTA), saying that the move will further reduce the competitiveness of traders who are still bearing the hefty costs of trucking and shipping fees, on top of the downturn in export receipts.
“Kung ipatupad ’yan, businesses will shoulder the costs. Maganda sana kung gobyerno ang sasagot niyan, but hindi e. Madadagdagan na lang ’yung mga binabayaran. May trucking and shipping fees na nga, dadagdagan pa. Magiging uncompetitive lang tayo [If that is implemented, businesses will shoulder the cost. Ideally the government should shoulder it; but it doesn’t. This is an added expense to the trucking and shipping fees. This makes us uncompetitive],” said Philexport President Sergio Ortiz-Luis Jr. in a phone interview.
He did not readily give an estimate on the additional costs that exporters would have to bear if the PSI is revived.
The Philexport chief raised the issue after exporters were informed that groups are attempting to insert the provision on the PSI scheme during the legislative deliberations on the proposed CMTA.
Regulations such as the PSI—labelled as another business red tape—will only aggravate the plight of traders who are currently experiencing a slowdown in exports brought about by softening of demand from China, the world’s second-biggest economy, he said. “Bagsak pa exports natin (Our exports are still down); it’s not a good time for additional costs,” the Philexport head said. He noted that the x-ray inspection scheme should be sufficient.
However, if the Bureau of Customs is really bent on imposing the PSI, Ortiz-Luis said the implementation should be on a voluntary basis.
The PSI scheme entails the inspection of a country’s imports at the point of origin, doing away with any inspections at the destination. It is usually carried out by contracted private organizations for governments. Currently, the PSI only covers bulk and break-bulk cargoes, not containerized cargos.
The proposal of the customs bureau last year was to expand the scheme to include all bulk, bulk-break, containerized and noncontainerized cargoes arriving and entering the country’s ports. These cargoes need to undergo the so-called load-port survey at the port of origin.
“Make it optional and let the service speak for itself. If it would really speed up the process, then well and good. But right now, it should be the soft approach, which is voluntary,” Ortiz-Luis said.
The move to revive the PSI was first raised last year by former Customs Commissioner John Sevilla in his bid to curb misdeclarations, specifically undervaluation of imported goods.
The proposal, however, was quickly shelved after a swift backlash from local and foreign businessmen, who were also harshly affected then by the congestion at Manila’s ports.
The House version of the CMTA, House Bill 5525, is currently pending second reading, while its Senate counterpart bill is still at the committee level at the Senate’s Ways and Means Committee.