End to conflicting roles of PPA pushed

STATE think tank Philippine Institute for Development Studies has called for an end to the conflicting dual roles of the Philippine Ports Authority (PPA) as regulator and competitor in port services, as it also stressed the need to immediately address the lack of independence of the Maritime Industry Authority (Marina), to boost the country’s shipping and port system.

A Philippine Exporters Confederation Inc. (Philexport) statement quoted PIDS research fellow Rafaelita Aldaba as saying that the “PPA, as both operator and regulator of ports, has little incentive to promote competition, using its regulatory powers, instead, to protect its ports and approve rate hikes for port services, fromwhich it earns its revenue.”

“Marina, which is responsible for the development, promotion and regulation of the maritime industry in the Philippines, relies on congressional approval for its operational budget, affecting its independence as a maritime regulator,” Aldaba further said.

All these, she said, led to “weak competition, inefficiencies, and lack of investment which, in turn, raise business costs and lower competitiveness.”

To overcome these issues, according to the Philexport statement, Aldaba proposed the separation of the PPA’s regulatory functions, and its development and operational functions through congressional action.

She was also said to favor leasing PPA port facilities to operators, instead of collecting a percentage of their revenues “to remove the economic incentive for PPA to increase cargo handling rates.”

“There should also be transparent, fair and competitive guidelines for extending cargo handling contracts and overseeing the bidding process for port privatization,” Aldaba was further quoted by Philexport as saying.

Other proposals include allowing more competition in foreign containerized cargo operations and handling; permitting more foreign participation in port services by relaxing the 60-40 ownership rule; seeking more investments in port and shipping facilities and infrastructure through public-private partnerships; supporting Marina in implementing competitive reforms, and further expanding the roll-on-roll-off (Ro-Ro) terminal system to reduce local transport costs.

In July this year, the South Luzon Chambers of Commerce urged the government to end the multiple and conflicting roles of the PPA to encourage more investors to develop and operate private ports in the country.

Members of the Philippine Chamber of Commerce and Industry (PCCI) from Regions IV-A (Calabarzon), IV-B (Mimaropa) and Bicol have reportedly asked the Department of Transportation and Communications to amend the PPA charter so that the PPA function could be focused on regulation of the industry.