Europe-PH News

Firms 'running after cash' amid higher shipping costs atop 12% VAT on exports

July 19, 2021

CNN Philippines

Metro Manila (CNN Philippines, July 16) — Apart from a new rule slapping a 12% value-added tax on export items and deals that previously were VAT-free, firms have also been grappling with a more expensive shipping process, an exporters’ group bared.

“The cost of shipment, minimum is three times the usual. And the brokerage fee is sometimes five times [higher than] the usual,” Philippine Exporters Confederation (Philexport) president Sergio Ortiz-Luis told CNN Philippines’ The Exchange on Friday.

This comes as exporters deal with the lack of bottoms for the ships, rendering many of them unable to ship products for the past 2-3 months, he added.

“I just was talking to somebody: the total value of the container that he is sending is about $35,000. The total charges including brokerage fee is about $18,000. Can you imagine that?” said Ortiz-Luis.


These woes come atop the imposition of the 12% VAT on export products that previously didn’t have it, a development that export-oriented firms earlier cautioned would lead to layoffs and billions of pesos of losses in local trade. 

Ortiz-Luis referred to the move as the nail that “shut the coffin” for exporters still grappling with the COVID-19 health crisis.

“With the problems that we have now, exporters are really running after cash. Banks are not really that easy to borrow from now,” he added.

With this, the Philexport president said exporters have been seeking a quick loan from government so that they can immediately borrow funds for paying shipping costs, as these are charged upfront.


Source: https://cnnphilippines.com/business/2021/7/16/exporters-higher-shipping-costs-12--VAT-items.html

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