House approves cabotage law, competition bill on third reading

Categories: Policy News and Updates

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Date Posted: 21 May 2015

The House of Representatives has given its final nod on three economic measures during its plenary session late Tuesday, among them the fair competition policy which has been pending before Congress since 1987.

Priority bills that were approved on third reading during the House plenary session on late Tuesday are:

• the Philippine Competition Act, which seeks to curb monopolies and unfair trade practices for a “level playing field” among businesses;

• the Philippine Archipelagic Sea Lanes act, which provides allowable routes for foreign ships and aircraft passing through local waters;

• and the amendments to the Cabotage Law, which allows foreign ships to serve local routes for import and export cargo.

The fair competition act is seen to improve the business climate in the country by legislating a Philippine Competition Commission which will monitor and crack down price fixing, restrictions in competition and trade, and controlling markets in the local economy.

The sea lanes bill, meanwhile, sets the allowed “continuous, expeditious, and unobstructed transit” for vessels engaged in economic trade with the country or its neighboring states.

Under the measure, foreign ships and aircraft passing through Philippine territory sets a general allowable distance for traversing the country’s seas, with vessels instructed not to deviate more than 25 nautical miles to either side of the axis line of the sea lane, or that such ships and aircraft “shall not navigate closer to the coast more than 10% of the distance between the nearest points on island bordering the sea lane.”

Meanwhile, relaxed rules on the cabotage law would allow foreign vessels to load and unload import and export cargo directly to local ports. If enacted, the law will cut freight costs for shipping goods to and from the Philippines. It does away with the current need for foreign carriers to tap a local shipping service just to bring their goods from the Port of Manila to a local harbor.

The three measures are among the priority bills sought by Malacañang to secure Congressional approval by June.

Business groups have likewise pressed for its approval, saying the measures are aimed towards improving the country’s attractiveness as an investment destination.

The bills would have to be reconciled with its counterparts passed by Senate before it can be forwarded to the President for signing into law.

Other measures that were approved by the House on Tuesday night were a bill requiring the registration of mobile prepaid subscriber identity module (SIM) cards, and the bill establishing a national identification system.

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