DTI to conduct study & review of PH’s cabotage law

GENERAL SANTOS CITY (MindaNews / 6 Sept) – The Department of Trade and Industry (DTI) is set to launch a comprehensive study and review of the country’s cabotage law as it moves to improve the competitiveness of local industries, including tuna fishing and manufacturing.

Trade Assistant Secretary Blesila Lantayona said on Friday the study will mainly focus on determining the “pros and cons” of the proposed lifting of the cabotage provisions of Republic Act 1937 or the Customs And Tariff Code of 1978

She specifically cited the law’s granting of exclusive rights to coastwise trade for Philippine-registered marine vessels.

“We will be conducting consultations with various sectors to get the necessary inputs as to their experiences with the implementation of the law,” she said at the opening of the 15th National Tuna Congress trade exhibit here.

Lantayona said the agency moved for the conduct of the study after President Benigno S. Aquino III directed Congress in his state-of-the-nation address in July to revisit the provisions of the cabotage law.

In his address, the President said the move was aimed to “foster greater competition and to lower the cost of transportation for our agricultural sector and other industries.”

In the 13th edition of the National Tuna Congress, the delegates passed a resolution “urging the Philippine government to rationalize the cabotage provisions of Republic Act 1937 and other related issuances.”

Congress delegates reiterated such move in their 14th gathering last year.

The resolution, which was addressed to the President, cited that the cabotage provisions have contributed to the aging of the shipping industry’s fleet and triggered the prohibitive costs on fuel, insurance premiums and taxes that eventually resulted to high shipping and freight cost as well as inefficient passenger and cargo handling.

It said shipping, freight and transportation costs constitute a significant portion of the operating costs of the fishing industry in terms of movements of its raw materials, production inputs and finished products.

“There is a need to rationalize the cabotage provisions of the law and other related issuances in order to improve the competitiveness of the Philippine tuna industry and its allied industries,” it said.

Joaquin Lu, president of the Socsksargen Federation of Fishing and Allied Industries Inc. (SFFAII), explained that the cabotage provisions have been hampering the movement of tuna products to various domestic markets.

“At present, the cost of shipping tuna to Manila is more expensive than moving them to other markets abroad like the United States,” he said.

Lantayona said the agency will work with the tuna industry players, specifically the SFFAII, in their upcoming study.

“If we find out in our study that the cabotage law has been actually blocking the progress of our industries, we will go to Congress to advance this cause,” she added.

In late July, Cagayan de Oro Rep. Rufus Rodriguez filed House Bill 1789 to repeal and modify certain sections of the Tariff and Customs Code of the Philippines and the Domestic Shipping Development Act of 2004.

To be known as the “Coastwide Trade Act of 2013,” the bill seeks to spur domestic tourism, increase port revenues and promote cost-competitiveness among shipping companies with the entry of foreign vessel operators.