Truckers received an early Christmas gift last week after President Marcos issued an order prohibiting local government units (LGUs) from collecting substantial “pass-through” fees from motor vehicles using national roads to transport goods and merchandise, a widely cheered move that is expected to redound to lower prices of basic goods and benefit cash-strapped consumers.
LGUs were likewise “strongly urged” under Executive Order No. 41 issued last Sept. 25 to suspend the collection of an assortment of extra charges from sticker fees to mayor’s permit fees, entry, delivery, and discharging fees imposed on vehicles using local public roads to transport goods “in the interest of public welfare.”
As Mr. Marcos emphasized in the EO, “The unauthorized imposition of pass-through fees has a significant impact on transportation and logistics costs, which are often passed on to consumers, who ultimately bear the burden of paying for the increase in prices of goods and commodities.” The Alliance of Concerned Truck Owners and Organizations (Actoo) could not agree more, as LGUs had been “creative and innovative” in charging all sorts of fees having some power to do so under the Local Government Code of 1991. The EO, it said, was the “very first good news” the sector has received amid rising oil prices and shifting transportation policies.
Actoo vice president Rina Papa said that in Manila alone, where transport activity is at its highest in the country because of the presence of the biggest international and local ports, truckers pay a road user’s fee of P2,000 to P2,500 a month or as much as P30,000 a year. Then as these trucks bring the goods and merchandise to the provinces, they pay an additional pass-through fee of at least P675, depending on the LGU. There are even provinces that sell stickers or solicit paint from the trucks as they pass through checkpoints. All of these unnecessary LGU impositions indeed add up to an extra layer that ultimately translates into higher retail prices of goods and produce.
It remains to be seen, however, if the welcome provisions in the EO will be translated into action on the ground as this is not the first time that such a directive had been issued.
In fact, the Department of the Interior and Local Government (DILG) has been repeatedly saying since as far back as 2006 that the collection of these pass-through fees was illegal. It had issued as many as eight circulars saying so, with the latest issued in 2018. That 2018 circular again ordered LGUs to “refrain from enforcing any existing ordinance authorizing the levy of fees and taxes on the interprovince transport of goods and merchandise, regulatory fees in local parts, and other additional taxes, fees, or charges in any form upon the transport of goods and merchandise.” An exasperated Local Government Secretary Eduardo Año then said, “For the nth time, desist collection.”
The Manila government, however, had flouted that directive and continued to collect such fees, prompting Actoo in 2021 to seek the intervention of the Anti-Red Tape Authority (Arta), which agreed that the collection of the pass-through fees in the city contradicted the DILG directive. Arta in 2021 also signed a joint memorandum circular with the DILG and the Department of Finance that prohibited the collection of these fees, which covers charges for wharfage, tolls for bridges, sticker fee, discharging fee, delivery fee, market fee, toll fee, entry fee, or mayor’s permit fee. But even then, the illegal collection of the fees continued.
Given such a track record of weak enforcement, the bigger challenge ahead for the Marcos administration is to strictly enforce the EO to make sure that LGUs indeed stop collecting unauthorized fees—often without a corresponding receipt—from hapless truckers.
The chances of the Marcos administration succeeding where previous regimes had failed have improved as Manila finally issued a notice on Sept. 29 suspending the collection of the hefty pass-through fees, according to Kim Lokin, undersecretary of the Department of Trade and Industry. That the Manila government issued the notice even before the guidelines on the implementation of the EO had been issued should encourage other LGUs to immediately follow suit and heed the national government’s directive which will help reduce logistics costs.
George Barcelon, president of the Philippine Chamber of Commerce and Industry, pointed out that logistics account for as much as 26 percent of production costs in the Philippines, significantly above the average of just 15 percent in other countries in Asia. This is mainly due to the Philippines being an archipelago, thus, goods and produce have to travel by land, sea, and air, but the extra fees imposed by LGUs along delivery routes certainly do not help.
Thus with the resolve of the Marcos administration to bring down business costs, LGUs should contribute their share and comply. That way they can help bring down prices of vital goods, produce, and merchandise, just in time for Christmas.