Sen. Benigno “Bam” Aquino IV
MANILA, Philippines—Instituting key reforms in the shipping industry will help bring down the prices of goods in the country, Senator Bam Aquino said on Friday.
Aquino said lowering the prices of goods in the country “is still possible, if key reforms in the shipping industry are undertaken, including a review and amendment of the Cabotage Law.”
“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 said in a statement, a day after the Senate committee on trade, which he heads, conducted Thursday its initial hearing on the issue.
During the hearing, Aquino explained that high shipping costs around the country largely contribute to the high prices of goods.
In fact, he noted that it was cheaper to send products from other countries to the Philippines than to ship goods within the country.
Aquino cited for instance the cost of shipping a 20-foot equivalent unit (TEU) from Kaoshiung, China to Cagayan de Oro, which is $360 or P16,000 compared to the cost of shipping the same cargo from Manila to Cagayan de Oro, which he said will cost $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. It is not right that the local shipping cost is higher when shipping local products,” he said.
With the current prices, the senator said, local businesses have no other choice but to increase the prices of their products to cover for the high transport costs.
“We if we are going to implement reforms in the shipping industry, the cost of transporting goods would go down which in effect would result to cheaper consumer goods,” said Aquino.
Aside from lowering prices, he said, 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,” he further said.
The senator said no less than President Benigno Aquino himself, during his 2013 State of the Nation Address, asked Congress to amend the Cabotage Law, saying it would lower the transport cost of products.