This story
was taken from Bulatlat, the Philippines's alternative weekly
newsmagazine (www.bulatlat.com, www.bulatlat.net, www.bulatlat.org).
Vol. VI, No. 1, February 5-11, 2006
New Regulation to Ease Out
Small Forwarders
Anticipating a boom in trade in the Asia-Pacific region and the entry of
foreign-owned freight forwarders, the Philippine Shippers’ Bureau issued an
order increasing eight-fold the required capitalization for the forwarding
business. This, protested small forwarders, will kill their business.
By Jhong dela Cruz Anticipating a boom in
trade in the Asia-Pacific region and the entry of foreign-owned freight
forwarders, the Philippine Shippers’ Bureau issued an order increasing
eight-fold the required capitalization for the forwarding business. Administrative Order no. 6,
published Dec.15, and with implementing rules and regulations issued Jan 2,
increased the capital requirement for freight forwarders to P 4 million ($77,056
at $1: P51.91) for non-vessel operating common carrier (NVOCC), P2 million
($38,528) for international freight forwarders, and P250,000 ($4,816) for
domestic freight forwarders from the current rates of P500,000 ($9,632),
P250,000 ($4,816), and P100,000 ($1,926), respectively. Editha Muñoz, manager of
Speedtrans Intl, Inc., a forwarding firm, said that only a few from her sector
will be able to comply with the 4 million prescribed capital. Muñoz, also acting
chair of the Alliance of Concerned Freight Forwarders (ACCFO), said the measure
will kill small and medium-sized firms. “This measure will kill us
small players,” Munoz said. She lamented that the economic crisis has already
made her type of business more vulnerable to closure. In the implementing rules,
renewal applications are allowed until Dec. 31, 2007 to comply with the new
order. Applications filed in 2004 and 2005, which are for renewals this year and
2007, with paid-up capital below the required amount, shall be “conditionally”
approved but will be given six months to comply. Cartel? ACFFO has filed a petition
before the Department of Trade and Industry Undersecretary Zenaida Maglaya to
recall the implementation saying it would result to the closure of small and
medium forwarding firms. ACFFO, composed of some 200
small and medium freight forwarders, opposed the manner by which the amount was
determined, saying PSB arrived at the figure by getting the median of paid-up
capital of accredited companies with PSB. “Upgrading should be left
for the firms to decide. If PSB can come up with actual statistics showing that
Philippine exporters and importers are prejudiced by the current P500,000
capitalization then we can jointly come with the amount sufficient to protect
our transacting public,” she said. PSB chief Vicente Pedro
Mendoza said, “How can they compete with big foreign forwarders who will
participate in bidding large shipments if they have inadequate capacity?”.
The group feared a “cartel”
among big local forwarders could be in the offing. ”This would mean more
unemployment and the death of our business," Muñoz said. Bulatlat © 2006 Bulatlat
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