Exporters air concern over gov’t move to increase charges

MANILA, Philippines—Exporters are urging the government to rethink its recent decision to increase fees and charges levied by various agencies, believing that this will hamper their competitiveness just as the global economy is slowing down.

Industry group Philippine Exporters Confederation Inc. (Philexport) said Administrative Order No. 31 authorizing the increase in government fees and charges could drive exporters’ production costs up by 7 to 10 percent. The new AO signed by President Aquino last Oct. 1 will be implemented in January 2013.

Philexport president Sergio R. Ortiz-Luis Jr. said in a phone interview that his group has already submitted “a position paper to the Office of the President asking for a review.”

Ortiz-Luis noted that AO 31 effectively repealed a previous memorandum circular that directed the heads of agencies to seek clearance from the National Economic and Development Authority (Neda) before authorizing the imposition of new fees or an increase in existing fees. As such, exporters are also recommending that the Neda board continue to approve increases or changes in fees.

Exporters in the handicrafts sector are among those that could be hit hard by the order, said Dennis Orlina, president of the Philippine Chamber of Handicraft Industries Inc.

“In our sector, most will be affected because our raw materials [come from] the countryside,” Orlina said, explaining that AO 31 also covers barangay (village) fees and other local charges. “We are already facing unabated increases in power, water, freight costs.”

Orlina also stressed that exporters could not pass on to their buyers the additional costs brought on by the increase in government fees and charges.

“The margins are very small, and the buyers are not changing their [buying budget]. So, you lose business because you are already less competitive,” he said.

In a copy of the order posted by the Office of the President at the online Official Gazette, President Aquino had directed the heads of state agencies to review their existing fees and charges. The agencies could then increase rates and impose new fees and charges if necessary.