The Department of Transportation and Communications may resort to more “interventionist” measures to decongest Manila’s ports, such as the South Harbor (in photo) in favor of underutilized facilities in Subic and Batangas. AFP
MANILA, Philippines—The Department of Transportation and Communications may resort to more “interventionist” measures to decongest Manila’s ports in favor of underutilized facilities in Subic and Batangas, including recommending certain government guarantees for shipping companies.
The move represents a significant shift in policy as earlier efforts to let market forces naturally divert shipping traffic away from Manila have failed, Transportation Secretary Joseph Emilio Abaya said last week.
“We are trying to restrain government intervention but we might just have to come into this in a calculated manner,” Abaya said.
The DOTC previously tapped the Japan International Cooperation Agency (JICA) to come up with several proposals to solve the issue.
Among the proposals are implementing certain caps on Manila’s harbors as well as a proposal for a “take or pay” guarantee to encourage shipping companies to use Batangas and Subic.
Abaya said the agency was reviewing all options, including the take or pay proposal, despite the negative stigma associated with the scheme given the bad experiences in the past involving the power sector during the Ramos administration.
Some Manila-based ports operators also raised concerns that diverting traffic away from the capital could raise shipping costs.
“I know people are allergic with that phrase (take or pay). We’ve had some horrible experiences with it. But done well and really carefully studied this would (help solve) the problem,” Abaya said.
“We are calibrating our way and talking with all stakeholders so that they are aware if this is going to hit them so they can prepare,” Abaya said.
The JICA proposals have yet to be approved by Abaya, according to the DOTC spokesman. The next step in the process is for these to be reviewed by the so-called economic development cluster, which includes the Department of Finance and the National Economic and Development Authority.
Abaya said the DOTC was simultaneously studying measures to bring down the cost of shipping within the country. He, however, did not elaborate.