Lowering the prices of goods is still possible, if key reforms in the shipping industry are undertaken, including a review and amendment of the Cabotage Law.

This was stressed by Senator Bam Aquino, chairman of the Senate Committee on Trade, Commerce, and Entrepreneurship, at a hearing conducted by the committee on Thursday morning.

“Reviewing and amending the Cabotage Law is one of the many reforms that need to be pushed in the shipping industry. Ultimately, this will benefit millions of Filipinos because it will help bring down the prices of goods in the country,” the senator emphasized.

During the hearing, Aquino explained that high shipping costs around the country

largely contribute to the high prices of goods.

In fact, Sen. Aquino noted that it is cheaper to send products from other countries to the Philippines than to ship goods within the country.

For example, the cost of shipping a 20-foot equivalent unit (TEU) from Kaoshiung, China to Cagayan de Oro is $360 or P16,000.

However, the cost of shipping the same cargo from Manila to Cagayan de Oro will take $1,120 or almost P50,000.

“If we look at it, local shipping costs are more than three times the cost of shipping costs to and from overseas.Hindi tama na mas mahal pa ang presyo ng local shipping sa pagbiyahe ng mga lokal na produkto,” he stressed.

With the current prices, local businesses have no other choice but to increase the prices of their products to cover for the high transport costs.

“Kung magsasagawa tayo ng mga kinakailangang reporma sa shipping industry, bababa ang halaga ng pagbiyahe ng produkto na mauuwi naman sa mas murang bilihin,” Aquino explained.

Aside from lowering prices, local businesses and the agriculture sector will be strengthened as farmers and local traders will be encouraged to transport their products to different parts of the country.

“We are confident that, with the help of our colleagues in government and the private sector, we will be able to find more ways to lighten the burden of our countrymen caused by high prices,” Aquino said.

“Our goal here is really to lower the prices of goods, but we also need to consider the welfare of our local shipping companies who will be affected by the proposed amendments,” the lawmaker added.

In his 2013 State of the Nation Address, President Benigno Aquino III asked Congress to amend the Cabotage Law, as it will lower the transport cost of products.

 

Photo source: Subic Bay Official Website