October 22, 2024 | 12:00am
MANILA, Philippines — The Department of Transportation (DOTr) has suspended the grant of investment protection and lower fees on roll on, roll off (RORO) vessels that offer trips to low-demand routes.
In an order, Transportation Secretary Jaime Bautista suspended a memorandum circular allowing the Maritime Industry Authority (MARINA) to issue missionary route status for RORO ships.
Department Order 2024-016, issued on Oct. 15, 2024, stops MARINA from further using its Memorandum Circular DS 2021-01 to hand out certain incentives to select RORO operators.
Bautista cited the possible competition risks being promoted by the circular. He said the grant of route protection and yearly discounts discourages other players from entering the market.
With this, travelers in missionary routes are stuck booking the same RORO vessels over and over again, leaving little to no wiggle room for cost and service variation. Bautista said the circular, in effect, runs counter to the President’s directive to the DOTr to bring down transport costs.
“(The) grant of missionary route status for RORO passenger ships limits the number of available transport services to the Filipino people,” the order read.
The circular, issued in 2021, seeks to bring water-based transport in missionary routes, which are defined as areas with no existing shipping service due to geographic limitation or low demand.
As of 2021, there are 41 corridors that MARINA considers as missionary routes, such as Lucena to Romblon; San Jose, Occidental Mindoro to Batangas City; Taytay to Cuyo in Palawan; Oslob, Cebu to Dumaguete; and San Juan, Batangas to Abra de Ilog, Occidental Mindoro.
RORO ships serving missionary routes are granted route protection for a maximum of five years. Further, they enjoy a 50 percent discount on fees and charges on certificates, documents, licenses and permits, including the annual tonnage fee for the first year.
MARINA observes a first come, first serve rule when assessing applications for missionary route status. Given this, the agency has the right of precedence to exclude other applications, unless the first one to submit is found insufficient.
Bautista said the DOTr would honor existing missionary route status granted by MARINA, but their validity would run only until their expiry dates.
As a whole, Bautista believes the incentives are no longer needed given that the government has already loosen the ownership rules for shippers operating domestic routes.
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