Sen. Grace Poe's Opening Statement
Committee on Public Services Hearing
April 12, 2023

Maritime transport is the backbone of the global economy. According to the United Nations Conference on Trade and Development, 90% of goods in the world trade are still carried by sea through the international shipping industry.

Mula sa balikbayan box ng ating mga OFWs, imported raw materials at manufactured goods, hanggang sa mga pinamili sa online shopping --naka-depende lahat sa maayos na pamamalakad ng mga cargo sa ating mga daungan. However, our shipping industry has long been plagued by high logistics costs, delayed or damaged goods, smuggling, and corruption.

At the center of the pandemic global supply chain crisis and congestion in Philippine ports are shipping containers or the large steel boxes that contain cargo. For the past years, the Philippine Ports Authority has found it difficult to address problems in the deposit and return of foreign-owned containers.

Port users currently pay shipping lines a deposit of P10,000-P30,000 for dry containers and P180,0000 for refrigerated containers. But it takes 6 months or sometimes years to get the refund.

Under the DOTr's Shipper's Protection Office, 80% of complaints against international shipping lines were about the months-long delay in the return of container deposits and lack of transparency in the additional charges levied. Hindi na nga abot-kaya para sa small businesses, hindi ka pa sigurado kung maibabalik ang deposit. The PPA's proposed P980 insurance and monitoring fee intends to replace this flawed deposit system.

Wala ding mapaglagyan ang mga empty containers. When container yards cannot accommodate their return, these containers and the trucks carrying them congest our ports and access roads. Worse, consignees and brokers have to shoulder additional charges for the delay.

To address this, PPA intends to roll out a Container Staging Facility (CSF) which will be the shared service facility for empty foreign-owned containers scheduled for reexport. The container yard handling and the 3-day storage costs P3,520/ per container, compared to the old Empty Container Handling cost of P6,400.

PPA further proposes to digitize through the Trusted Operator Program- Container Registry and Monitoring System (TOP-CRMS) which is an electronic tagging and tracking system where container movement and port users shall be enrolled in the system.

Like any other policy borne of good intentions, everything looked good on paper. In May 2022, PPA awarded the P877.6 million contract to the lone bidder the joint venture of NextIX Inc. and Shiptek Solutions Corp. But in February 2023, the PPA Board decided to indefinitely defer the implementation of the Order pending compliance with President Marcos' directive to ensure compliance with ease of doing business. However, PPA still targets these policies to be rolled out "later in the year."

PPA takes comfort in the Anti-Red Tape Authority's "Good Practice" rating. Among all options, only the TOP-CRMS solution has a net benefit of an estimated P282.6 billion for a 10-year period.

Today, we shall see if it is indeed the best solution to our worsening port problems. We shall also look at other PPA Administrative Orders that seek to introduce a Centralized Ticketing System, Prescribed Waste Reception Fees in all PPA Ports, Mandatory Tree/Mangrove Planting, and the Port Terminal Management Regulatory Framework.

Shipping industry associations and organizations claim that these administrative orders result to higher port charges that will lead to a drastic increase in logistics costs.

Solusyon nga ba ang mga polisiyang ito o dagdag problema lamang? Does replacing container deposits with insurance and monitoring fees protect users? If so, why are the users complaining? In creating reforms to our maritime trade, panahon na para magkaroon ng regulations sa excessive charges kasabay ng pagsuporta sa paglago ng shipping industry. Were there sufficient studies and stakeholder consultations to support these policies?

Gusto nating maayos at ma-modernize ang sistema pero ayaw naman nating ipasa lahat sa port users at kalaunan ay sa ordinaryong konsyumer ang mga bagong port fees. High shipping rates also worsen inflation. Lahat tayo ay maapektuhan ng pagtaas ng mga produkto sa merkado.

We need to keep this in mind as we listen to our regulatory agencies and stakeholders, and weigh the benefits versus the costs of these proposed port reforms.

Maraming salamat po.