Freight forwarders told to hike minimum capital

The Department of Trade and Industry’s Philippine Shippers Bureau (DTI-PSB) has ordered freight forwarding companies to comply with a new directive increasing eight-fold the minimum paid-up capital of non-vessel common carriers.

"This policy aims to level the playing field in the forwarding industry by preventing the entry of incompetent firms. It would also guide our shippers and exporters in finding a credible and reliable forwarder for their operations," PSB director Pedro Vicente C. Mendoza said in a statement.

Since compliance by the affected companies with the new capitalization requirement will be made within two years from the effectivity of the order, freight forwarders have until 2008 to produce the additional capital.

The PSB explained that freight forwarders renewing their accreditation or those that were granted provisional certificates are given until the start of 2008 to comply with the higher paid-up capital.

DTI Undersecretary for consumer welfare Zenaida Maglaya said freight forwarders are given enough time to come up with additional funds for the new capital requirement.

However, new applicants are already required to comply with the minimum paid-up capitalization upon filing, Mendoza noted.

Administrative Order 6 upgraded the minimum paid-up capital of a non-vessel operating common carrier to P4 million from P500,000 and of international freight forwarder to P2 million from P300,000.

Meanwhile, the minimum paid-up capital for domestic freight forwarder was unchanged at P250,000.