Bill liberalizing entry of foreign vessels in PH filed

Cagayan de Oro Rep. Rufus Rodriguez. INQUIRER FILE PHOTO

MANILA, Philippines—After President Benigno Aquino III pushed for the amendment of the cabotage law in his State of the Nation Address, Cagayan de Oro Rep. Rufus Rodriguez filed a measure to liberalize the entry of foreign vessels in the country and to allow them to engage in coastwise trade.

Rodriguez, in his bill, said the country’s current cabotage principle reserving coastwise trade for national flag carriers has given rise to inefficiency because local operators have cornered the market.

“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,” he said in his explanatory note to the bill.

This foreign trade barrier must be lifted, he added.

Foreign-owned vessels should be allowed to ship export and import cargoes under the same rules and regulations covering domestic shipping companies, and they should be allowed to dock at any port in the country, he said.

This would bring about a host of benefits for the country, he said. Domestic tourism would receive a boost, and port revenues would increase. Shipping companies would also offer more competitive fees. Foreign vessels would also be able to provide the transshipment services needed by local exporters and importers, thus helping them to compete in the international market.

President Aquino, in his national address, said that the cabotage law must be amended to spur greater competition and lower transportation costs for the agricultural sector and other industries.

The proposal could give rise to protests from local shipping operators. In previous years, they warned that allowing the entry of foreign operators could kill the local shipping industry.