-
Industry group Distilled Spirits Association of the Philippines is pushing for the Bureau of Customs to immediately issue a separate order regulating foreign shipping lines/agents’ destination and origin charges
-
DSAP president Olivia Limpe-Aw said Philippine importers pay 3.5 to 9 times more on destination charges compared with importers in other Asian countries
-
The group is requesting for BOC to “split” a proposed joint administrative order on port-related concerns and issue a separate order focusing on foreign carriers’ destination and origin charges
The industry group of distilleries and alcoholic beverage producers is pushing for the Bureau of Customs (BOC) to immediately issue a separate order regulating foreign shipping lines/agents’ destination and origin charges, underscoring that Philippine importers pay more on destination charges compared with importers in other Asian countries.
Distilled Spirits Association of the Philippines president Olivia Limpe-Aw, in a presentation during the 7th Customs Industry Consultative and Advisory Council (CICAC) general assembly and 13th Central CICAC meeting on November 5, claimed Philippine importers pay 3.5 to 9 times more destination charges than Singapore (3.5x), Japan (3.8x), Vietnam (4.9x), Malaysia (5.8x), Thailand (7x), South Korea (7.9x), China (8.2x), and Indonesia (9.1x).
“So we are paying $1,618 and typical in eight countries, nine countries that we studied, they would be paying only $177 to $458 for the same container, so that’s 3.5 to 9 times what other countries are paying,” Limpe-Aw said.
DSAP members include the country’s biggest industry players such as San Miguel Corporation; Tanduay Distillers, Inc.; Emperador Distillers, Inc.; and Destileria Limtuaco & Co., Inc.
Meanwhile, the Association of International Shipping Lines, Inc. in a Viber message to PortCalls said they are unable to comment because the matter involves pricing, which they cannot discuss due to competition rules by Europe, the U.S., and China.
Limpe-Aw said the figures in her presentation – which was made by request from BOC – were based on the review of 18 invoices for 40-foot containers. The $1,618 figure was from a bill for a 40-foot container by a Philippine shipping agent.
READ: BOC reconsiders joint order regulating foreign shipping line charges
Terminal handling charge is “not the issue” as its rate ranges the same across the region, but “everything else that is stacked over and above the terminal handling charge”, Limpe-Aw noted, adding that there are also other charges in the Philippines that are not being imposed in other countries.
Expensive Manila port
Manila port also costs up to almost eight times more using the same shipping line than in other Asian countries. For example, for one shipping line, it pays $552 in Vietnam while it is over $1,618 in Manila, while in Indonesia the bill would only be $151 versus $1,178 for Manila.
“So the carrier is the same, the service is the same, only the port changes and the values of the destination charges [change],” Limpe-Aw said.
Moreover, Limpe-Aw said with the 2.6 million twenty-foot equivalent units of Philippine imports in 2024 based on data from the Philippine Ports Authority, a bill of $1,618 per container translates to P129 billion of destination charges. If it’s just the container imbalance charge, operations service cost, and container handling charge, it would be P65 billion, while if you add equipment examination and empty control, it could reach P75 billion.
No gatekeeper for the Philippines
Limpe-Aw claimed the difference with other countries is that “others have a gatekeeper, the Philippines has none.”
“Kumbaga (So to speak), in the Philippines, it’s free for all. They can do whatever they want,” she added.
“At the rate we’re going, we can never develop because we are a net importer. How can we solve the imbalance problem if our inputs are already overpriced by destination charges and all those other fees?” Limpe-Aw noted.
She said there’s the Philippine Competition Commission (PCC) and Maritime Industry Authority (MARINA), but noted “there are no charge level filing for approval, so we believe that the BOC order closes the gap.”
Limpe-Aw said they are requesting for BOC to “split” the proposed joint administrative order (JAO) and to issue a customs administrative order or customs memorandum order on foreign carriers’ destination and origin charges, while the JAO can focus on port congestion management.
BOC has earlier proposed a JAO providing guidelines on port and container management, and transparency and regulation of shipping and logistics charges.
Customs commissioner Ariel Nepomuceno, during the same CICAC meeting, noted the JAO has already been signed by the Finance secretary but is still awaiting signatures from other involved agencies, including the Department of Transportation, Department of Trade and Industry (DTI), Philippine Ports Authority, PCC, and MARINA.
Limpe-Aw clarified that they are not blocking the JAO, but said they believe there’s no need to wait for it because BOC already has the legal basis to act directly through Republic Act No. 10863 or the Customs Modernization and Tariff Act (CMTA).
She cited the following sections:
- Section 1226, which is the provision on the supervision and regulation on third parties, which includes carriers, shipping lines, and shipping agents.
- Section 202, which provides BOC’s duties and functions, including assessment and collection of revenues from imported goods and other dues, fees, charges, fines and penalties.
- Section 701, which Limpe-Aw said already treats transport related costs as part of the transaction value for customs valuation purposes, “which means that BOC already has a standing legal hook to require substantiation of these charges”.
- Section 1514, which states BOC may adopt international standards and best practices in customs administration, whether or not the Philippines is a signatory to such international agreement or convention.
Limpe-Aw said the BOC order should require foreign shipping lines/agents to re-file and justify their current destination and origin charges, provide administrative penalty for any charge or increase without prior government approval, a cap on provisional increases, online publication of approved charges, a BOC-DTI complaint desk, co-approval with MARINA of shipping agent rate filings with their accreditation linked to rate compliance, among others.—Roumina Pablo
