Press Release
July 21, 2015

Drilon: New Anti-Trust Law, Cabotage amendments to boost PHL preparations for ASEAN integration

Senate President Franklin M. Drilon today welcomed the signing into law of two landmark measures which will play critical roles in advancing the Philippines' readiness for the ASEAN Economic Integration.

The twin measures - the Philippine Competition Act and the long-sought amendments to the 50-year old Cabotage Law - were ratified by Congress shortly before it adjourned its second regular session in June "in order to protect consumers and prepare local markets for upcoming regional challenges by the year's end," according to Drilon.

"We thank both leaderships of Congress and President Aquino for giving due consideration to these laws. The swift enactment of these laws is a victory for the average Filipino who will benefit the most from improved market policies," he stressed.

"For nearly three decades, lawmakers have been trying to pass both of these laws, and now under this reform-oriented 16th Congress, we finally enacted these measures," Drilon said.

The Senate leader underscored how the Philippine Competition Act and the amendments to the Cabotage will bolster the country's capability to respond positively to unavoidable challenges and opportunities to result from the ASEAN market integration.

"A new anti-trust law and an amended Cabotage law is just what the doctor ordered, so to speak, since our laws and policies need to be more than capable if we are to fully capitalize all the prospects for economic growth that the AEC will bring," he said.

Drilon explained that a new Philippine Competition Commission will be established to enforce a national competition policy prohibiting anti-competitive agreements, abuse of dominant position, and anti-competitive mergers and acquisitions.

Drilon warned of tougher penalties against entities that will engage in unfair business practices with fines reaching up to P250 million, with amounts adjusted for inflation every five years. Offenders of the act may also face up to seven years in prison.

According to Drilon, the Philippine Competition Act, a commitment by the country under the AEC blueprint, will address the nation's long-standing absence of a comprehensive competition law in effect.

"Before this law was signed, the Philippines remained as the only original nation-member of the ASEAN region without an anti-trust law. Now we are much closer to being at par with our neighbors in preventing unfair trade behavior within our markets," he said.

Meanwhile, the amended Cabotage Law, Drilon explained, will allow foreign-flagged vessels to call at multiple ports, and enable importers and exporters to co-load cargoes in foreign ships going in and out of the Philippines.

Under the existing law, only domestic vessels are allowed to engage in coastwise trading, which involves carrying cargoes from one domestic port to another domestic port.

The move will widen the market and is expected lower the cost of transport of agricultural goods and other local produces, which ultimately affect prices of products sold to consumers, noted Drilon.

He added that without the amended Cabotage law, local businessmen and consumers would continue to suffer from high cost of domestic shipping in the country, noting how cheaper it is to transport cargo to another country's port than from one local port to another.

For instance, shipping dry cargo from Davao to Taiwan costs approximately $450 per 20-foot equivalent unit, as compared to $680 when shipped from Davao to Manila, Drilon noted.

"By allowing foreign ships access to other ports in the country, the amendments will spur economic activity in these areas beyond Manila, and help free up space and decongest the port of Manila, which before was the only place in the country where these foreign ships could load and off-load their cargo," he said.

Lastly, Drilon lauded the Senate Committee on Trade, Commerce and Entrepreneurship chaired by Sen. Bam Aquino for crafting pro-economic legislation and vowed that the Senate will continue to work on reforms and policies which will make the country more competitive and help sustain its economic growth.

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