Maritime industry champ in Congress

Shipbuilding should be a top priority. We need to build cheaper but safer ships to bring economic activities to so-called Geographically Isolated and Disadvantaged Areas

Only a handful of members in Congress have some understanding and appreciation of the strategic importance of the maritime industry in the nation’s economy.

Among these very few lawmakers, however, what we need is someone who will look after the greater interest of the country as a maritime nation, being an archipelago. One senior lawmaker, Cagayan de Oro Rep. Rufus Rodriguez, is cast in this mold.

The veteran lawmaker recently filed House Bill 6503 which seeks to upgrade the country’s state-run maritime institution, broadening its mandate to produce officers both for the merchant marine and the uniformed services — Philippine Navy, Coast Guard, Maritime Police and other government agencies.

We found some provisions of HB 6503 needing improvement, but we welcomed the bill since it would make our alma mater more responsive to the needs of the maritime industry, as well as maritime defense, law enforcement, and government service.

After filing HB 6503, Rep Rodriguez indicated his keen interest in championing the issues of the maritime industry as part of his advocacies in Congress.

He is now training his sights on the Philippine Ship Registry bill, to see the eventual passage of the measure. The bill’s provisions, we believe, need to be enhanced to make the Philippine registry more effective in attracting shipowners to register their ships in the country. Rep Rodriguez’s experience in lawmaking and his persuasive influence among fellow lawmakers will certainly come in handy in the approval of the bill.

Also, his attention was recently caught by the need to promote the local shipbuilding and ship repair industry. The lawmaker has yet to file a bill on SBSR, but he is interested in looking into the lopsided incentives the government has been extending which favor foreign shipbuilders to the disadvantage of Filipino shipbuilders.

The objective of supporting the local SBSR industry is to modernize our domestic shipping and make it more competitive by extending help to local shipbuilders that would allow them to build affordable ships for the local market.

A law from Congress will definitely help boost the SBSR industry. In the meantime, the government under former President Rodrigo Duterte had identified the country’s long-term investment priorities under the Strategic Investment Priority Plan, and this included shipbuilding.

Shipbuilding should be a top priority. We need to build cheaper but safer ships to bring economic activities to so-called Geographically Isolated and Disadvantaged Areas or GIDAs, like the 6th-class island municipality of Concepcion, Romblon.

The only link of most of these GIDAs to the outside world is small wooden bancas. This situation can be changed, however, if only government would immediately and effectively implement the SIPP which was issued under Republic Act No. 11534, or the “Corporate Recovery and Tax Incentives for Enterprises” (CREATE Law).

The SIPP will make local shipbuilders competitive by extending the following incentives:

* Income tax holiday;

* 5 percent Special Corporate Income Tax based on gross income earned, instead of all national and local taxes for 10 years;

* Enhanced deductions;

* Duty exemption on importation of capital equipment, raw materials, spare parts, and accessories;

* VAT exemption on importation; and

* VAT zero rating on local purchases

On top of these incentives, we appeal for the creation of a Special Economic Zone for the maritime industry just like the “duty-free hub” concept, which has been identified in Program 5 of the 10-year Maritime Industry Development Plan of the Maritime Industry Authority.

The “Eco-industrial Maritime Park” under the MIDP will offer tax- and duty-free importation of capital equipment such as ship engines and machinery, raw materials like steel plates, spare parts, supplies, stocks and genetic materials and equipment related to shipbuilding.

The private locators will be given fiscal and non-fiscal incentives and will serve as the source of raw materials, equipment, and machinery used in shipbuilding and ship repair facilities to lessen the cost of production for shipbuilders.

These incentives under SIPP as well as the Eco-industrial Maritime Park will help increase investments, productivity, and employment in the SBSR industry and, of course, modernize domestic shipping.

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