Bill filed to repeal Cabotage Law

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Thursday, July 25, 2013

A LAWMAKER on Thursday sought to repeal the Cabotage Law, one of the few measures President Benigno Aquino III mentioned in his fourth State of the Nation Address (Sona) to help drive the economy forward.

In his nearly two-hour Sona, Aquino asked members of Congress to amend the Cabotage Law "to foster greater competition and to lower the cost of transportation for our agricultural sector and other industries."

Cagayan de Oro Representative 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.

"The cabotage policy limits competition and encourages inefficiency among local vessel operators since foreign vessels are not allowed to pick up local cargo for delivery to another port within the Philippines. Local vessel operators are not forced to compete in terms of freight coast and service quality with international vessel operators," Rodriguez said in the bill's explanatory note.

"This barrier in foreign trade must be eliminated. Foreign vessels must be allowed to engage in transhipment of export and import cargoes with the same rules and regulations that apply to domestic shipping companies," he added.

Under the proposal, foreign vessels will be allowed to transport passengers or cargoes between ports within Philippine territorial waters even when a domestic vessel is available.

All domestic and foreign vessel owners shall be given a certificate of public convenience or any form of authorization for the carriage of cargoes by the Maritime Industry Authority.

The liberalization of the country's Cabotage law is among the priority legislation that the administration will push in the 16th Congress, as Aquino believes that it will increase competition in the industry.

This early, however, local shipping groups oppose the repeal of the Cabotage law, citing its effect to the local economy and the possibility of coastal trade getting into the hands of foreign liners.

Industry data show that there are over 4,000 ships, mostly operate as passenger-cargo liner, in the domestic trade.

The Philippines is an archipelago of 7,107 island and boasts of having long coastline with a length of 235,937 square kilometers. Out of its 76 provinces, the country has 55 coastal provinces. (Kathrina Alvarez/Sunnex)

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