THE Philippine government has been looking to utilize the domestic shipping industry to pursue economic growth and develop wider global commerce. In October, the Maritime Industry Authority (Marina) launched a develop plan that it will implement for the next 10 years to provide better opportunities in the industry.
In partnership with the Philippines Ship Agents Association (PSAA), the Association of International Shipping Lines Inc. (AISL) and other maritime enterprises, Marina will work with these industry stakeholders to make sure that all shipping companies in the country comply with global rules and standards. This is in line with Marina’s vision for the Philippines to be recognized as a maritime hub, not only in supplying seafarers around the world, but also as a nation with a strong domestic shipping trade.
Marina Administrator Marcial Quirico Amaro 3rd said he believes this goal can only be achieved through the combined efforts of the government and the private sector. For her part, Overseas Shipping Service Director Jean Ver Pia said the expansion of the Philippine ship registry would not only help them cater to more opportunities, but would also make trade in the industry more convenient. The strategies that Marina is considering to support this project are the expansion and development of infrastructures and the augmentation of port facilities and support services.
Marina has also been meeting with international shipping sectors quarterly to talk about the concerns and challenges they have in domestic shipping, paving the way for solutions. These are only a few of the initiatives that Marina is implementing to promote and cultivate the country’ domestic shipping industry.
Primarily, Marina’s goal is to ensure that Filipino members of the international maritime community are responsible in their profession and that everyone is directed to one goal: maritime safety and the security and protection of the marine environment.
The shipping sector is divided into two segments: inter-island or domestic shipping and ocean-going or international shipping. In the Philippines, there are five major shipping companies that dominate the domestic industry: 2GO, Philippine Span Asia Carrier Corp., WG&A, Fast Ferry Corp. and Cebu Ferries Corp. These shipping players are responsible for providing various services, such as line/passenger, tramper, tanker, fast craft, ferry and wooden bat, roll-on/roll-off, industrial carrier, and tugs and barges. Of these services, passenger and freight transport services generate higher revenues.
An intelligence report released by the Technological Educational and Skills Development Authority (Tesda) in January indicated that the Philippines had 25,063 domestic fleets, both merchant and fishing, in 2015. This figure, which started with just 13,129 in 2011, has increased by 91 percent in only four years. Among the merchant vessels, the greatest in number are the passenger-type and cargo vessels.
To monitor all merchant vessels in the country, all ships under domestic ownership that sail in Philippine waters are expected to be registered and given a CPR and CO. This is pursuant to Marina Circular 2013-02. Over 4000 COs and CPRs were issued in 2015, although this number represents a slight decline from the figure recorded in 2011.
Among domestic shipping operators in the country, 74.38 percent are single proprietors; 25.03 percent, corporations or partnerships; and 0.59 percent belong to a cooperative. This is based on the 2014 statistics report released by Marina.
To make shipping more convenient and low-cost, the road roll-on/roll-off (RORO) system has been established.
According to an Asian Development Bank (ADB) study, the RORO shipping service has greatly impacted the Philippine economy in shipping goods more efficiently. It reduces transportation costs; creates new inter-island and regional links; and expands regional markets. The country has three nautical highways where the RORO system operates: the Western Nautical Highway, the Central Nautical Highway and the Eastern Nautical Highway.
Focusing on solutions
According to a businessman from Bacolod City in Negros Occidental province, the continuous increase in the number of players entering the domestic shipping industry may mean greater opportunities in the market. More players in the shipping industry mean more choices in the market. This will lead to a competition for price, where companies will be forced to offer lower shipping rates.
He said shipping rates in the Philippines are among the highest globally and, as a businessman who ships goods from the Visayas to Manila, this is one of the challenges that the industry must work on.
Another challenge that the industry faces is the port system and services. The ports and the cargo transfer of goods, for example, have been negatively affected by road infrastructures and traffic congestion, which is a primary problem in the country.
According to Lara Richter, author of the case study “The Impact of the Maritime Industry on the Philippine Economy,” the enforced truck bans are also making the country’s port system worse.
Despite these challenges, the government has been trying to address them one step at a time. Since 2016, International Container Terminal Services Inc. (ITCSI) and Asian Terminals Inc. have launched TABS, an electronic booking system that helps reduce the queues of trucks at the port. With this system, trucks can schedule their pick up and drop off at the ports, making it more convenient, as they can just choose from the slots available. This is also helpful in managing and organizing the freight in the port.
The government has been exerting efforts in developing the industry because it sees great potential in it. It also sees that the Philippines can compete with the rest of the world. In fact, several Southeast Asian investors are willing to give the country financial aid in improving domestic shipping vessels and renovating major ports. With that, Marina’s vision for the country to become a major global shipping industry may happen soon.