MINDANAO business leaders have called on President Benigno Aquino III to sign the newly Congress-approved Cabotage Law, which has already been forwarded to Malacañang for his signature.
They said the revised law, once approved, will foster competition among domestic shipping companies in the country and will pave way for a lower shipping costs.
"If it will be revised (Cabotage law), it will drive up competition among domestic shipping," Romeo Montenegro, director for investment promotions and public affairs of the Mindanao Development Authority (Minda), said at the sidelines of 24th Mindanao Business Conference (MinBizCon) Davao Roadshow at Park Inn ByRaddison Davao Friday.
He said the competition will lead to competitive rates in domestic shipping since logistics costs are expected to drop once the amended bill is signed into law.
"If there is competition there will be competitive rates. Because currently, our domestic shipping rates are very high. It is more expensive to ship products domestically than to ship it abroad. For instance Davao to Indonesia is just $550 per TEU but if we do the same domestically it will cost around $1,200 to $1,300 per TEU," he added.
Under the Cabotage Law, only domestic shipping lines could serve domestic routes.
According to a study conducted by Philippine Institute for Development Studies (Pids), "the absence of competition has resulted in high cost of transporting raw materials to manufacturing sites, finished products and agricultural goods to various destinations, and imported products to distribution areas, thereby increasing operational costs that are passed on to consumers as high prices."
Antonio T. dela Cruz, president of the Davao City Chamber and Commerce and Industry Inc., said he is looking forward to the approval of the amended Cabotage Laws since it has been a challenge for many of the local exporters and traders.
"We are looking forward that there will be an amendment to foster competition in the local shipping industry to pave way for a lower shipping costs," he said.
At present, the Senate and the House of the Representatives reached a consensus last week and finalized the version of Cabotage Law which was forwarded to Malacañang for the president's approval.
Under the proposed revision, foreign vessels will be allowed to pick up and deliver shipments straight to local ports across the country, eliminating the need to employ local shipping companies to transport goods between Manila and other domestic ports.//
