The Philippines is estimated to have lost around USD200 million worth of exports due largely to the growing volume of returned export shipments since the outbreak of the Iran war earlier this year, according to the country’s largest consolidators group.
Tomas Medina, president of the Philippine Export Service Providers and Consolidators Association Inc. (PESPCAI), said the association’s 400 members—mostly small and medium enterprises—generate roughly USD3 billion in exports annually and employ more than half a million workers.
The group accounts for about 30 to 35 percent of the country’s total food exports.
However, exporters have been facing a rising number of returned shipments, which have increased to as many as 100 containers from the usual average of 30. The returns stem from various reasons, including non-compliance with export regulations, but the situation has been aggravated by disruptions arising from the Iran war.
According to Medina, the backlog has worsened because it now takes about six months for returned shipments to be released to exporters.
By the time the returned goods are finally released, many products have already expired or are nearing their expiration dates, making them difficult or impossible to sell.
Medina said Bureau of Customs (BOC) Commissioner Ariel F. Nepomuceno has acted promptly by endorsing requests for the immediate release of returned exports to the Department of Finance (DOF).
However, he noted that the DOF has been slow to act because there is currently no formal policy governing the treatment and release of returned export shipments.
In one of his requests to the Commissioner, Medina warned that “the cost of storage and expiration of the foodstuffs will be significant.”
He cited losses of around PHP400,000 for a returned container carrying mixed food and grocery items shipped by his group. Aside from losing the marketability of the products, exporters also incur substantial storage costs that could have been avoided if there were a clear government policy on returned exports, he said.
Because of this policy gap, Medina noted that the release of returned shipments is being handled on a case-by-case basis. He urged the government to establish clear guidelines on the treatment and processing of returned exports to facilitate their timely release.
In addition, Medina said exporters are grappling with the unpredictability of vessel calls at Philippine ports. Unscheduled port calls by international shipping lines are forcing exporters to use feeder vessels rather than ship directly to their destination markets.
These feeder ports include Japan, South Korea, China, and Hong Kong.
