The Philippine Chamber of Commerce and Industry (PCCI) said the private sector has initiated a joint review with the government of the country’s supply chain and logistics costs to mitigate the possible impact of US tariffs on Philippine exports.
“We’re reviewing the cost of logistics. We’re reviewing the charges, the taxes because we have to find ways and means on how to mitigate the impact of this tariff,” PCCI President Enunina Mangio said in an interview in Taguig City late Friday, adding that they are revisiting their supply chain, technology and processes.
“If we can automate to improve our processes and reduce our costs, probably that would minimize the impact of all these things,” she said.
Mangio anticipates the result of the review to come out in 30 to 60 days, a few weeks after the anticipated implementation of the new tariff rates to be imposed by the United States to its trading partners after the July 9 deadline.
Leading the review are the Philippine Exporters Confederation Inc. and the PCCI for the private sector side and the Bureau of Customs and the Philippine Ports Authority (PPA) for the government side, she added.
Mangio said while the reduced logistics charges may not entirely offset the additional cost of the higher tariff, “at least the effect would be less.”
She did not elaborate on how much lower the cost of logistics should be reduced, but noted that the review covers the entire chain of logistics from handling to port charges and shipping fees. PCCI estimates that logistics take up as much as 27 percent of the cost of a business’ operations.
But Mangio said even with the imposition of a 17-percent tariff as earlier announced, the Philippines is still at an advantage compared to its neighbors.
“Even if we increase our prices, we’re still competitive. It would be the end-user in the US which will bear the cost,” she added.
Among the priorities in the review, she said, are the removal of double handling charges and the streamlining of loading and unloading processes.
“Double handling charges cause the increase in logistics cost. If a shipment is brought in and the queue is long, it is moved to one area (to wait). There’s a cost there. And then it is moved back (to the queue), then that’s another cost,” Mangio explained.
Another recommendation is for the privatization of PPA-managed ports, she said.
“Why not pass on the responsibility to the private sector if you cannot be efficient?,” she added.
