PPA asked to give up for good share in cargo handling earnings

Business groups want the Philippine Ports Authority (PPA) to give up its share in cargo handling revenues, as they appeal to the government to reduce the cost of logistics during the pandemic. Doing so would require the repeal of a letter of instruction (LOI) that has been in effect since the Marcos regime, allowing the PPA at least 10 percent of the gross income earned by all cargo-handling contractors and port-related service operators. “While this recommendation will cause a reduction in PPA’s revenue, we have to put a stop to this policy of sharing from cargo handling revenues (10-20 percent), which unnecessarily increases logistics cost,” they said.

This was one of the proposals of 13 business groups and one public-private sector group in a joint statement on Thursday. “The negative impact such a policy brings to the economy is definitely greater than whatever the government gets…,” the statement read, referring to LOI 1005-A.

The groups appealed to the President to issue an executive order that would rescind the LOI, noting that such a move would have a long-lasting positive impact that would go beyond the COVID-19 crisis.

“It corrects the conflict of interest where the regulator can increase rates not based on merit or financial justification but based on the benefit that accrues to it,” they said.

They also said the government should impose a moratorium on demurrage and detention fees, and other penalties imposed on shipments stuck at the port. They said the government should also do a regulatory impact assessment on COVID 19-related issuances, since a number of policies both at the national and local levels had caused confusion, unnecessary delays and hampered the transport of goods.

Those who signed the statement included the Philippine Chamber of Commerce and Industry, Philippine Exporters Confederation Inc., Supply Chain Management Association of the Philippines, private-public sector group Export Development Council, American Chamber of Commerce of the Philippines, Australian-New Zealand Chamber of Commerce Philippines, Canadian Chamber of Commerce of the Philippines and European Chamber of Commerce of the Philippines.