Graft-congested port

It has been said that in the Philippines, every single law, regulation, directive or ordinance presents an opportunity for someone somewhere to make money, directly or indirectly, legally or otherwise. This observation has made itself painfully felt in real world, specifically in the Port of Manila, the main transshipment point of goods to and from this country.

No thanks to a “perfect storm” of ill-conceived local government policies, the absence of the national government’s strong hand, and a creaking transportation infrastructure, Filipinos are now expected to feel the impact of clogged economic arteries through more expensive goods and services during the holiday season.

This is aggravated by the issue of corruption in and around the port system, which has made it more difficult and more expensive for companies to move imports out of the docks and container yards and into the factories and markets where they are needed.

The gravity of the situation cannot be stressed enough. A cursory examination of the Port of Manila will show steel containers stacked five high (where they used to be only double stacked) due to the slow process of moving them out to their consignees. Due to the longer time it takes to unload their cargo (some have been refusing to take on Philippine-bound cargo altogether), shipping lines have raised their charges, thus effectively doubling the cost of transporting goods to the Philippines through the Port of Manila. Trucking fees have also spiked, caused by illicit “facilitators” at the Philippine Ports Authority (PPA) and the Bureau of Customs, who are able to exact higher “tong” from increasingly desperate truckers and importers.

The port congestion that began with the Manila city government’s ill-conceived truck ban has now been institutionalized by entrepreneurial gatekeepers (no doubt, with powerful backers) who speak to the business community with one intimidating voice: “If you want your cargo released early, pay up.”

Malacañang must shake off its lethargy, communicate clearly to the heads of the two agencies where shippers say corruption is endemic—PPA and Customs—and jolt them, all the way down to their foot soldiers on the ground and their agents, out of their business-as-usual mindsets, that corruption will not be tolerated.

Ultimately, however, one must recognize that policing the ranks of government agencies to stop “pay-as-you-go tong systems” is not the most efficient and effective way of fighting corruption. Combating this disease at the “retail level” is akin to the legend of that little Dutch boy who tried to stem the flood by plugging holes in the dyke with his fingers. One’s fingers are limited, and the holes that breed corruption are legion.

No, the kind of corruption that causes and profits handsomely from port congestion must be addressed at the wholesale level. In the end, one must recognize that corrupt elements share a common trait with many legitimate businessmen: They look for market imbalances and asymmetries that present money-making opportunities.

And because the quest for illegal profits is fueled by innovative greed that has always proven smarter than government regulation, the solution to corruption is the same solution used in open market systems: Starve out the corrupt elements.

How? Designating the ports of Subic and Batangas as alternative ports to Manila is a step in the right direction. Having shippers and shipping lines land their cargo in alternative ports will decongest Metro Manila and, thus, reduce the earning opportunities for corrupt elements who, at present, can exact a high price from shippers due to a lack of viable alternatives.

At present, the Subic and Batangas ports remain severely underutilized because the bulk of the cargo that enters the Philippines has their ultimate destinations in the factories and markets in and around Metro Manila. Thus, landing goods in Subic and Batangas only to have them trucked back to the capital region is a costly endeavor, unless government can step in to help bring about a more efficient transportation system. Whether this be done through more efficient trucking schemes, the building of new highways or the construction of a north-south railway system is up for the stakeholders to decide. But the Aquino administration has to get the ball rolling asap—as in yesterday.

Saving the Philippine economy from the ills of port congestion requires both immediate and long-term solutions. We agree that the government cannot do this alone. The private sector has an important role to play. But the Aquino administration can—and must—do more.