Department of Transportation

[Vantage Point] Why is the port digitalization project unsinkable?

Val A. Villanueva

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[Vantage Point] Why is the port digitalization project unsinkable?

Alejandro Edoria

The project is backed by powerful business personalities closely associated with Marcos Jr. The concerned stakeholders are well aware of this, but nonetheless hope that the President will do the right thing.

The port modernization program which aims, among others, to simplify operations through digitalization is the only project I know which only its creators could love.

So flawed is its justification that even its intended benefactors wouldn’t even touch it with a 10-foot pole. The Trusted Operator Program-Container Registry and Monitoring System or TOP-CRMS is the brainchild of Philippine Ports Authority (PPA) General Manager Jay Santiago. It was created in mid-2021 through Administrative Order (AO) No. 04-2021, ostensibly “to stop smuggling, digitalize processes,” and “prevent port congestion.”

Despite overwhelming opposition from stakeholders, the Anti-Red Tape Authority (ARTA), and even the PPA board itself (from which the recommendation for its complete revocation was sent more than three months ago to Malacañang), the project still hangs like the sword of Damocles over the heads of industry stakeholders. Reason: The documents detailing why it should be totally abrogated have been gathering dust on the desk of Executive Secretary (ES) Lucas Bersamin.  

Industry sources suspect that there seems to a conscious effort to delay the process which, under normal circumstances, should have already been affirmed or negated by President Ferdinand Bongbong Marcos Jr. In effect, those who still push for its implementation are just waiting for everything to cool down, or when opposition to it dies a natural death. The rumor mill is also rife with murmurs of a Cabinet shakedown by end-October, which TOP-CRMS supporters are hoping would kick out those who are firmly against its implementation. Thus lingers the question of whether the President will heed the call of industry stakeholders to junk the program.

In its resolution to revoke the project, the PPA board of directors cited its many flaws. But if we go by his interview with the Daily Tribune, Santiago is adamant and confident that the project will be implemented in due time.

Stalled at the office of the ES

The project is backed by powerful business personalities closely associated with Marcos Jr. The concerned stakeholders are well aware of this, but nonetheless hope that the President will do the right thing. Doing otherwise could be fatal to the industry from which essential goods and services that our country needs flow from. 

Is ES Bersamin dragging his feet? The fact that it is taking him so long to bring up the revocation recommendation to the President is raising a lot of eyebrows. Stakeholders would like to believe, however, that his office could just be loaded with other matters that require more urgent action. 

The P900-million TOP-CRMS project has already been awarded to a joint venture company, composed of Shiptek Solutions Corporation, NexIX, and the Aboitiz-owned Union Bank.

The scheme proposes that a digital tracking device be installed in every container cargo to pinpoint its whereabouts at any time. That way, the diversion of container cargoes to another warehouse – a ploy some importers employ to evade taxes – will be quickly and easily detected.

But the Bureau of Customs (BOC) already tracks down the movement of containers and their contents. The real problem is not determining the whereabouts if these containers.  It is the collusion that exists between some Customs workers and smugglers.

It may be true that the BOC has failed to carry out its mandate of stopping smuggling.  However, can TOP-CRMS do better and ensure that the government gets to collect all the taxes due? 

What really ticks off importers is the imposition of registration and monitoring fees on every container, in addition to the insurance fees the importers are required to pay. The scheme, they maintain, will result in duplication, create another bureaucratic layer, increase the cost of doing business, and complicate an already chaotic situation.

If the project is implemented, industry players warned, the additional cost of doing business will be passed on to the consuming public, which is already reeling from runaway inflation. 

Here are some of the important points to consider:

  • The probability is high that the cost of importing goods will increase by at least Php35 billion per year, or as much as 50%, due to additional direct financial costs from higher insurance fees, transaction fees, and trucking fees.
  • There already exists digital container tracking and booking applications of international shipping lines, terminal/off-dock CY operators, so the implementation of the PPA’s proposed container monitoring system would be an additional layer of bureaucracy that would not benefit, but merely burden, the public.
  • Precious public funds would just be wasted with the PPA’s AO 04-2021’s digitalization scheme because the BOC has an ongoing World Bank-supported digitalization and modernization strategy that aims to curb smuggling.
  • Any action to be undertaken by the PPA regarding the issue of container deposits would be outside its jurisdiction and preempt the efforts of the country’s legislative branch where the Technical Working Group of the House Committee on Transportation is currently deliberating on House Bill No. 04933, a.k.a. the “International Maritime Trade Competitiveness Act,” and that of their Senate counterpart where Senate Bill No, 2147 is pending.

Rappler.com

Val A. Villanueva is a veteran business journalist. He was a former business editor of the Philippine Star and the Gokongwei-owned Manila Times. For comments, suggestions email him at mvala.v@gmail.com.

1 comment

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  1. ET

    More than three months have already passed? [“the PPA board itself (from which the recommendation for its complete revocation was sent more than three months ago to Malacañang)”] But “it is taking him (ES Bersamin] so long to bring up the revocation recommendation to the President.” Or is it already on the desk of President Marcos Jr. but it took him a long time to read or decide on it? I agree with writer Val Villanueva: “The real problem is not determining the whereabouts of these containers. It is the collusion that exists between some Customs workers and smugglers.” Are someone and some group of businesspersons aiming to make money through an unrealistic solution based on a disinformed problem?

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