EconomyEditor's PickPPA warns dev’t mission to suffer if commercial function prioritized

January 23, 2023
COURTESY OF ICTSI

THE Philippine Ports Authority (PPA) said it hopes legislators will consider the developmental role played by the agency under its current setup of acting as a regulator and a commercial entity.

Stripping the PPA of regulatory functions will leave it with a purely commercial mission, which may cause it to neglect ports which it does not consider viable.

“When you say commercial, I have to turn a profit. Why will I put something there if it is not commercially viable? Will I not violate my mandate?” PPA General Manager Jay Daniel R. Santiago told reporters during a recent briefing, where he was asked to comment on the proposed reorganization of the agency.

A “developmental” mandate means “it does not really matter whether it’s commercially viable as long as I provide linkages. That’s the advantage of the dual (regulatory and commercial) personality,” he added.

“We leave it to the wisdom of Congress if they want to (remove functions from the PPA), but the first question I will ask is if you (transfer) the regulatory function of PPA to MARINA (Maritime Industry Authority) … will you ask the same people from PPA to be transferred to MARINA to do it?”

He said the agency has been addressing concerns from the private sector questioning the setup where it is a regulator and an operator of ports.

“Privatizing the terminals is one step towards separating the regulatory and the operational functions. We acknowledge (the concerns) also, and we try to work within the limitations of the current regulations to address the concerns.”

Last year, a legislator refiled a bill seeking to reorganize the PPA by separating its regulatory and commercial functions.

Bagong Henerasyon Party-list Representative Bernadette Herrera-Dy’s House Bill No. 1400 aims to convert the agency into the Philippine Ports Corp. (Philports) while transferring its regulatory functions to MARINA.

“Through the years, the port users, including domestic shippers, exporters, and importers, have complained of low service levels, inefficient port operations and ever-increasing port charges,” Ms. Herrera-Dy said in the bill’s explanatory note. 

“They claim that the high cost of transport serves as a barrier to increased trade (both local and foreign) and undermines the country’s competitiveness.”

The PPA was established by Presidential Decree (PD) No. 505, which was subsequently amended by PD No. 857 in 1975. It is tasked with carrying out an integrated program for the planning, development, financing, operation and maintenance of ports or port districts.

The bill seeks to “avoid the conflict of interest arising from regulatory agencies vested in both regulatory and development or commercial functions.”

“Under no circumstances should a regulatory agency benefit from its own regulation and/or use its own regulatory powers to protect itself from competition at the expense of the public interest,” according to the bill.

Under the bill, PPA will be converted into Philports to handle the development, management and operation of public ports. Philports will collect port fees and dues approved by MARINA, which will fund port development, modernization, and expansion, among others.

The Philippine Liner Shipping Association has expressed support for the measure. — Arjay L. Balinbin

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