Goods with imported raw materials face price hikes

MANILA, Philippines - Prices of goods with imported raw materials sold in the country will likely increase once government implements a law requiring all imported bulk and break bulk cargo to be surveyed by an accredited surveying company at the port of origin, the Federation of Philippine Industries (FPI) said.

To further compound the problem, the government has only accredited one firm for the inspection of all imported goods, FPI reported.

In a statement, FPI said the Committee for the Accreditation of Cargo Surveying Companies (CACSC) headed by Secretary Narciso Y. Santiago Jr., has only accredited one firm to handle all imports to be surveyed.

Cotecna Philippines is the lone surveyor accredited by the government. As an accredited surveyor, it is required to issue a report on the quantity, grade of all cargo shipments bound for the Philippines.

The Philippine Iron & Steel Institute (PISI), an FPI member group, said that instead of only one company doing the surveying of the shipments, there should be a sufficient number of surveyors to ensure transparency, required expertise to handle the various kinds of products, and freedom of choice to ensure competitive prices and good service.

Likewise, the Philippine Association of Flour Millers (Pafmil) warned that the implementation of the order on Jan. 4 may cause delays in the discharge of wheat shipments already in transit to the Philippines and may lead to the payment of demurrage charges of around $20,000 to $30,000 per day per vessel. This will ultimately hit the consumers because of the resulting higher cost of flour and bread products. 

FPI is thus asking the government to defer for 90 days the implementation of the Malacañang-issued Administrative Order 243-A on Bulk and Break Bulk Cargo Clearance Enhancement Program. Under the new law, all bulk and break-bulk cargo entering the Philippines must be inspected by accredited surveying companies at their port of origin. The objective of the AO is to streamline import procedures for bulk and break-bulk cargo imports.

Aside from having only one surveyor, FPI said clarifications are needed regarding some important issues.

For instance, many items, like steel products, are already surveyed at discharge port because of the nature of the product, as a general practice, and out of mutual agreement between buyer and seller. How will the new rules accommodate and allow this established protocol in lieu of the pre-shipment survey requirement?

In case both pre-shipment and discharge port surveys are mandated as a result of this scheme, and both take place, and survey discrepancies arise as a result, which survey report will prevail?