Marcos tells local governments: Suspend ‘pass-thru fees’
President Marcos has ordered local governments to suspend the collection of so-called pass-through fees on national roads to ensure the efficient movement of goods and produce across the country.
The directive removes one of the extra logistical costs incurred by truckers—and manufacturing companies and agricultural producers in general—that is ultimately passed on to consumers, according toMarcos’ Executive Order No. 41The EO took effect on Sept. 28, according to Malacañang.
As early as 2006, the Department of the Interior and Local Government (DILG) issued a similar prohibition but it apparently went unheeded or got circumvented in many provinces, cities and municipalities as the years went by.
“The unauthorized imposition of pass-through fees has a significant impact on transportation and logistics costs, which are often passed on to consumers who ultimately bear the burden of paying for the increase in prices of goods and commodities,” said the EO, which was signed by Executive Secretary Lucas Bersamin on Sept. 25.
The order also “strongly urged” the suspension of fees “such as, but not limited to, sticker fees, discharging fees, delivery fees, market fees, toll fees, entry fees or mayor’s permit fees that are imposed upon all motor vehicles transporting goods and passing through any local public roads constructed and funded by … local government units (LGUs).”
Speaking to reporters covering his activity in Siargao on Friday, President Marcos said the EO was “really about the ease of doing business and (meant) to simplify again the procedures that are required for the transporter to bring the produce especially from the farm to market.”
Under the order, the DILG and the Department of Trade and Industry are required to submit joint reports to the President on the local governments’ compliance with the EO.
A national truckers association welcomed the order on Friday, saying it has long been clamoring for the abolition of such fees.
“This has been an issue for us all these years,” Rina Papa, vice president for external affairs of the Alliance of Concerned Truck Owners and Organizations (Actoo). “We hope the LGUs would follow the order” and “come to their good sense.”According to Papa, the fees were “illogical” and even “arbitrary” since they were being collected purportedly for the use of national roads which are outside the jurisdiction of LGUs.
Since 2006, the DILG has issued at least eight memorandum circulars (MCs) reiterating that the fees were illegal, she said.
The most recent, DILG MC 2018-133, ordered city governments to “refrain from enforcing any existing ordinance authorizing the levy of fees and taxes on their interprovince transport of goods and merchandise, regulatory fees in local ports, and other additional taxes, fees or charges in any form upon the transport of goods and merchandise.”
However, Papa said, some local governments managed to skirt the prohibition by invoking their autonomy under the Local Government Code.
“Why they’re doing this, we can only surmise,” she added. “It’s revenue generation for them, but it defeats the purpose of trade and commerce … It has become a very parochial and myopic issue.”
The payments resulted in “unnecessary expenses” for truckers.
In Manila, for example, truckers are required to secure a “travel permit”—which Papa said is akin to a pass-through fee—at P2,500 per vehicle per month. The fees are collected through the city’s traffic and parking bureau, she said.
In 2021, Actoo formally asked the Anti-Red Tape Authority (Arta) to intervene. But while Arta upheld DILG MC 2018-133, the city government of Manila did not stop the collection, she recalled.
“So you can imagine the kind of expense incurred by one truck going from the ports of Manila to Subic, which would have to pass through multiple LGUs,” she said. “But they don’t understand that what we’re doing doesn’t just concern LGUs but also affects the national economy and trade.”Año’s frustration
The last DILG memo on the matter was issued during the term of then Secretary Eduardo Año, who did not hide his frustration over the noncomplying LGUs.
“For the nth time, desist collection for there are prevailing sanctions for those proven guilty of violation,” Año then said in a statement.
He noted at the time that some LGUs continued to illegally collect pass-through fees “in the guise of sticker fee, discharging fee, delivery fee, market fee and/or mayor’s permit, among others.”
George Barcelon, president of the Philippine Chamber of Commerce and Industry, said the removal of the fees may help bring down the cost of doing business in the country where logistics often account for the highest production expense.
Citing a World Bank study released last year, he said logistics take up about 26 percent of production costs in the Philippines, way above the average of 15 percent in other Asian countries.
“So, there is a big disparity in the logistics cost between us and other countries as an overall component of the products we produce,” Barcelon told the Inquirer.
He said the EO should now be communicated clearly to the LGUs, many of whom have been imposing such fees through local ordinances.
“In the provinces, many are implementing their own toll charges. Sometimes, you even have to pay for each town that your goods pass through,” Barcelon added.