DOTC Pursues 3-Year Program To Reduce Domestic Shipping Costs For Inclusive Growth

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The Department of Transportation and Communications (DOTC) is beginning a three (3)-year program aimed at generating growth for the country’s agribusiness trade, directly benefitting workers in the agricultural and fisheries sectors across the country, in line with President Benigno S. Aquino III’s push for inclusive growth.

The DOTC announced on Wednesday (May 8, 2013) that it has signed a Cooperation Agreement with the International Finance Corporation (IFC) to pursue various policy and regulatory reforms in the Philippine shipping sector in order to improve our farmers’ market access and integration by reducing the cost of domestic shipping.

The project will involve a diagnostic review by the IFC to identify areas where pro-competitive practices will help meet these goals. The DOTC will work together with its frontline agencies, the Maritime Industry Authority (MARINA) and the Philippine Ports Authority (PPA), in reviewing the results of the study and implementing the recommendations of the IFC from 2013 to 2016.

“This partnership with the IFC is a very welcome development. It will have a major impact on our economy, especially for farmers and fisherfolk who stand to realize the most gains from our policy reforms,” said the Transport Department.

The DOTC explained further that, by reducing domestic shipping costs, the prices of commodities will also go down. According to a study prepared by the United Nations Development Program (UNDP) in 2005, 24.2% to 43.8% of the wholesale price of food products is on account of transport and logistics costs.

“By making it cheaper to move agricultural goods from farms to markets, the prices of these commodities will also be reduced, making them more affordable to consumers,” remarked the DOTC. “These benefits are the reason why the DOTC, MARINA, and PPA – all of whom share the President’s vision of inclusive growth – look forward to this project.”

This effort is partly funded by the Canadian International Cooperation Agency (CIDA), and will require no cost on the part of the Philippine government. It is also part of the IFC’s Philippine Agribusiness Trade Logistics program.

According to IFC Resident Representative Jesse Ang, this agreement demonstrates the IFC’s confidence in the DOTC, MARINA, and PPA’s efforts to undertake shipping and port reforms.

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