DOF clears admin order to ease port congestion
The Department of Finance (DOF) has signed the long-delayed joint administrative order (JAO) aimed at addressing port congestion, but it has yet to take effect as it awaits approval from other government agencies.
Finance Undersecretary Rolando Ligon confirmed to reporters that the DOF had signed the JAO last week. It gave the other agencies until the end of this week to submit their comments or approval before it can be enforced.
Ligon said there are no major revisions to the JAO from the DOF’s end.
The other agencies expected to sign the order include the Department of Transportation, Department of Trade and Industry, Bureau of Internal Revenue, Philippine Ports Authority, Maritime Industry Authority and Philippine Competition Commission.
The JAO has already been delayed from the initial August target of the Bureau of Customs (BOC). This was intended to allow ample time for preparations ahead of the cyclical buildup in port congestion that typically begins around October as trade activity picks up toward the holiday season.
Customs Commissioner Ariel Nepomuceno said the delay was due to the lengthy consultation process.
“There were at least 20 that gave their inputs. The process of getting their inputs took time. Otherwise, we will risk not consulting them,” Nepomuceno said.
“We had to vet and integrate the inputs. All of them had several major comments, so we reconciled that,” he added.
Nepomuceno said one of the major items raised during the consultations was the yard utilization rate used as the benchmark for normal or optimal port operations, although he did not specify whether the threshold was changed.
Yard utilization
Under the proposed JAO, a 75-percent yard utilization rate will serve as the benchmark for normal or optimal operations, with measures to be implemented once utilization exceeds the threshold.
Other stakeholder inputs that are not included in the JAO may be addressed through a separate Customs Memorandum Circular, Nepomuceno said.
Nepomuceno also said port disruptions could have a significant impact on collections, citing a roughly P4-billion decline in BOC collections during the protest by customs brokers and truckers earlier this month against foreign shipping lines over a backlog of empty containers.
He said the episode illustrated the potential revenue impact of port congestion, as delays in cargo processing could raise logistics costs and affect trade activity.
The push to finalize the JAO comes as the holiday season nears, with cargo flows traditionally peaking in October and November.
Meanwhile, the BOC expects import volumes to pick up toward the end of October and in November.
However, Nepomuceno said the agency does not expect volumes to recover to last year’s levels, as import volumes have declined across the board in recent months amid the fallout from the Middle East war.
“Our consumers are still holding back. We don’t expect the volume to be the same as last year. But we’re still confident that with the collection efficiency, we can still hit our revenue targets,” he said.
