Why business groups oppose digital container registry, monitoring, PPA explains

Philippine Ports Authority (PPA) General Manager Jay Daniel Santiago accused business groups opposing the digital registration and monitoring of container vans of deliberately spreading false information to stall and eventually revoke its implementation.

The Trusted Operator Program – Container Registry and Monitoring System (TOP-CRMS) was already given a go-signal by President Ferdinand “Bongbong” Marcos, Jr. as part of its digitalization efforts in all government transactions but it was deferred after at least 17 business groups opposed it.

Interestingly, the Department of Transportation (DOTr) wrote a letter to President Marcos explaining why it should not be implemented, with reliable sources saying that the PPA was not consulted and was not even informed that it forwarded a letter to Malacañang against the TOP-CRMS implementation.

PPA is under the DOTr.

Santiago was particularly irritated by the claim that the TOP-CRMS will result in a 50 percent increase in the cost of goods as importers and other sectors would have to shell out more money for the entire process of registration and monitoring of their container vans.

Santiago said the claim is far from the truth since their own data and analysis revealed that the TOP-CRMS implementation would even result in an 85 percent cut in the logistics cost of importers, brokers and truckers.

Logically, he said that a big cut in logistics cost of importation would mean reduction in the price of goods in the market.

“We don’t understand how P980 pesos in replacement of the P30,000 container deposit will result in a 50% increase in the cost of goods. Or that the additional annual import cost will be P35B. That’s just unbelievable,” said Santiago.

He was reacting to the statement by 17 business groups opposing the TOP-CRMS that their own estimate would lead to direct financial cost of P35 billion per year – additional insurance fees, transaction fees, and trucking fees required by its implementation—which translates to 50 percent increase in cost of importing goods.

Santiago argued that the TOP-CRMS importation would only require payment of P980 from the existing P30,000 payment for each of the container vans.

“Obviously, numbers are being bloated to scare the people and to discredit the program. Anybody who knows basic mathematics would conclude that P980 is smaller than P30,000 under any circumstance,” said Santiago.

TOP CRMS explained

TOP-CRMS uses technology for up-to-date container tracking allowing customers, carriers, freight forwarders, and shippers to access the status of their cargoes and containers.

It is expected to keep a registry and monitor all inbound shipping containers that will track every foreign-owned container’s location and movement using the industry- accepted data interchange formats through encrypted channels.

Santiago said the digitization program aims to address the decades-long issues of hefty container deposits and poorly managed empty containers that congest the ports. The streamlining of transactions leads to reduced logistics costs that trickle down to the benefit of Filipinos.

The TOP-CRMS was prescribed under PPA Administrative Order (AO) 04-2021, which the PPA Board had unanimously approved under the previous administration.

The order prescribes that the controversial use of container deposits imposed by shipping lines, which can go up to tens or even hundreds of thousands per container and could take months to reclaim, would essentially be reduced to P980 container insurance per container.

Cui Bono?

Business groups especially from the maritime sector are up in arms against its implementation, arguing that it will require truckers and other service providers to register under one system, which would then nominate and assign them to individual transactions, they said.

As a result, the groups said, the AO demolishes the autonomy of shipping lines and truckers to negotiate, manage and monitor their current and prospective vendors.

This feature in the proposed system creates a monopoly where multiple service providers are at the mercy of the winning bidder for TOP-CRMS, a serious concern under the Philippine Competition Act, business groups added.

In real terms, the groups said, this will lead to a staggering additional import cost estimate of at least P35 billion annually.

Santiago, however, questioned the reliability of the data being presented by business groups:.

“We are curious where they are getting their numbers because ours is based on actual statistics and documentation,” he said.

Aside from compliance to the digital transformation being pursued by the Marcos administration, Santiago said the TOP-CRMS will solve the decades-long issues of port congestion which has been costing importers and brokers a lot of money.

Citing the PPA’s data and his own experience as PPA general manager for six years, Santiago said a lot of complaints from customs brokers and importers relate to the extreme delay of return of these container deposits ranging from six months to more than a year before anything is returned but with deductions and a lot of times not at all.

He added that based on reports and statistics, less than 10 percent of containers incur any material damage on the hands of importers before they are returned to the shipping lines.

“We believe some sectors opposed to the program are the ones deliberately spreading false information regarding the program. Bottom line is these people want the status quo,” said Santiago.

“But it is indisputable that the status quo is problematic for us Filipinos. Look at the current costs of logistics in our country. It is paralyzing. It is easily determinable where the bulk of these costs can be found. The status quo benefits those opposing the program to the detriment of the ordinary Filipino.”

“They don’t want this to succeed because it will disrupt the status quo from which they have benefited from for decades, and yet look at where we are,” Santiago stressed.

Digital shift

Aside from the TOP-CRMS, the PPA is also pushing for the implementation of the e-ticketing system which promises to ease the burden of passengers especially during long school and work breaks.

“The electronic ticketing system is part of our big electronic management system. It aims to assist our kababayan from spending a lot of time in long lines just to purchase a ticket in our ports,” Santiago said.

“What we want to address through this project is the usual long lines that passengers have to endure whenever they go to their hometowns or go on a vacation to take advantage of long breaks. We feel how stressful it is and how tiring it is on the part of the passengers,” he added.