Mindanao businessmen today lauded the signing of the Foreign Ships Co-Loading Act, which will reduce logistics costs for producers and create a more efficient import and export system.
“It will reduce shipping costs for Philippine exporters, especially coming from Mindanao,” said Raymond Salangsang, president of the General Santos City Chamber of Commerce and Industry.
General Santos City exports at least US$250 million worth of tuna products every year.
Senate President Franklin Drilon cited the direct shipping of dry cargo from Davao to Taiwan which only costs approximately $450 per 20-foot equivalent unit compared to $680 when shipped through Manila.
Under the old cabotage law, foreign ships are not allowed to load export cargo from ports throughout the country other than its port of destination which primarily is in Manila, unless granted special permit.
Most exporters in Mindanao are forced to transport their products to Davao or transship them to Manila, adding more to their overhead costs.
The law will also help in decongesting the major ports in the country.
Salangsang said the amendment to the cabotage law will give the resurgent banana industry in the region a boost and the possible return of pineapple export operations in the city.
Due to increased shipping costs, Dole Philippines Inc has centralized its export operations in Panabo City in Davao del Norte.
The Makar Wharf in General Santos City was once the hub of pineapple and banana exports in Mindanao, largely due to the presence of Dole Philippines and its sister company Stanfilco.
Banana plantations near the city closed down in the 1990s after more than 25 years of operation.
These plantations however are making a comeback in South Cotabato, Sarangani, Sultan Kudarat and Maguindanao.
The new provision of the cabotage law also bodes well for the planned P1.2 billion expansion project at the Makar Wharf.
General Santos Mayor Ronnel Rivera earlier said they have been pushing for the rehabilitation of Makar Wharf, one of Mindanao’s biggest port complexes.
“This is the result of the Makar Port Development Summit we last year,” the city mayor revealed.
The proposed project will include additional berthing areas, reinforcement of the wharf columns and repairs of container yard rails.
Rivera also announced that DOTC has committed to upgrade the port’s plug-in facilities for refrigerated (refer) vans.
At present, the city mayor said the port has 204 plug-ins, but 34 of them are still powered by 220 volts.
“The international standard for refer van is 440 volts,” the city mayor explained.
In addition, Salangsang said 144 new refer van plug-ins would be installed next year.
“This is in anticipation to the increase volume of export shipments of bananas from the region when harvests begin this year,” he explained.