‘Foreign players threat to PH shipowners’
STAKEHOLDERS in the domestic shipping industry fear that the entry of foreign players would further burden the maritime sector due to overcapacity, which worsened during the coronavirus disease 2019 (Covid-19) pandemic.
Archipelago Philippine Ferries Corp. (APFC) Executive Vice President Mary Ann Pastrana said allowing foreign owners to do business in the coastwise trade would put local players at a disadvantage.
The House of Representatives has approved on third and final reading the House Bill 78, amending the Public Service Act and allowing 100 percent foreign ownership in the power, transport and communications sector.
Pastrana disclosed that FastCat, managed by the APFC while has registered a decline in sales and operations and the whole nation also needs to revive businesses, especially now that we’re gradually easing quarantine restrictions.
“We are at over bottom. If we allow entry of new ships from foreign owners, although it would mean increasing safety standards and comfort, it would compete with the domestic operators, and we would be at the losing end,” she told TheManilaTimes.
She cited that the fuel and lube oil cost for domestic ship owners is more expensive as it is subject to lots of taxes such as value added tax (VAT), sales, excise taxes, import duties, etc. While, for foreign ship owners, they will supply their ships with fuel coming from their own countries, which were not subject to VAT and other sales and excise taxes as these will be used exclusively to their own ships.
“In fact the reason why Congress did not allow before the removal of our Cabotage law is because we did not want ships coming from a foreign country to operate in the coastwise trade,” she quoted their lawyer as saying.
“Now that they passed a bill allowing foreign ship owners to operate in the domestic trade, they have in essence removed the Cabotage law,” she explained
Under the present Cabotage law, only domestic shipping lines can serve domestic routes.
Chelsea Chairman Dennis A. Uy earlier said the shipping business was faced by the challenge of overcapacity in the market and that there were certain routes that remain unprofitable.
“The challenge in this sector especially now that there is Covid- 19 is that less people are traveling. There’s overcapacity and because of overcapacity, the rates are going down. That’s the biggest challenge,” he said.
Senator Lito Lapid noted that the roll on – roll off (RORO) has been a big help to people living in remote islands of the country that do not have airports.
The Philippine Interisland Shipping Association (PISA), the umbrella association of major industry sectors has asked to retain the foreign ownership to 40 percent for our national security and economic development.
The PISA in its position paper said the effective control by Filipinos of the merchant marine fleet is important and necessary because of the allegiance to our country and to our Philippine flag.
“As an archipelago, our territorial borders are very porous and prone to foreign intrusion. Foreign ownership of ships, which will be registered in the Philippines and carry the Philippine flag will only exacerbate this situation and cause us to lose control over our shipping, our trade and eventually our economy. It will also make us lose control over our territorial security and integrity and likely encourage the mapping of our land and maritime areas and our marine resources for the benefit of foreigners and to the detriment of our citizens,” the PISA said.