Philippines Looking Towards More Competitive Shipping Market

Shipping Containers

Published May 8, 2015 5:44 PM by Kathryn Stone

The Philippines is taking major steps to ease its over 50-year old cabotage laws in order to allow for a more competitive shipping market. The House bill passed this week is part of a series of legislation that will permit foreign cargo vessels to conduct coastal trade in the Philippines. 

Currently, the Tariff and Custom Code of the Philippines limits trading rights within the country’s waters only to vessels of Philippine registry. According to Representative Mark Vilar, one of the bill’s authors, domestic shipping is extremely costly due to a limited amount of competition. Additionally, the lack of competition has put the market in the hands of a small number of companies, further driving up price points. 

The House Bill termed HB 5610 was approved earlier this week and is set to become law when an accompanying bill in the Philippine Senate is approved. Easing the 57-year old cabotage law, the new bill will allow for the transport and co-loading of foreign cargos within Philippine waters by foreign vessels. Ships coming into the country will be able to transport container cargo to a destination port within the Philippines after it has cleared a port of entry. Also, the co-loading provision allows for foreign vessels to transport container cargo of another foreign vessel bound for the same port. 

President of the Philippine Exporters Confederation, Sergio R. Ortiz-Luis Jr., stated earlier this year that it was likely three pieces of legislation aimed at curtailing the cabotage laws would pass by 2016.