Cebu City urged to suspend local road delivery fees

A delivery truck is seen at a police checkpoint in Cebu City. |CDND file photo

CEBU CITY, Philippines— A local legislator is urging Acting Mayor Raymond Alvin Garcia to issue an executive order to suspend the collection of delivery fees for local road usage here.

City Councilor Rey Gealon proposed the said resolution in an effort to help temper inflation and support economic growth in Cebu City.

The resolution states that this aligns with President Ferdinand Marcos Jr.’s directive to suspend “pass-through fees,” which was announced during his third State of the Nation Address (SONA) on July 22, 2024.

“The Office of the Mayor is therefore urged to issue an executive order prohibiting the collection of delivery fee for local road usage, as cited by President Marcos, Jr. in his third SONA, to help temper inflation and promote economic growth,” the resolution stated.

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Under the current Omnibus Tax Ordinance of Cebu City, Section 58 imposes an annual fixed tax (AFT) on delivery vehicles used by manufacturers, producers, wholesalers, dealers, or retailers. This includes trucks, vans, and other vehicles involved in the delivery or distribution of products within Cebu City.

According to Section 58(a), those involved in the distribution of distilled spirits, fermented liquors, soft drinks, cigars, cigarettes, ice cream, juice, or other drink concentrates are required to pay an AFT of P750 per delivery vehicle.

Conversely, manufacturers, producers, wholesalers, dealers, or retailers dealing with products outside these categories must pay an AFT of P500 per vehicle.

The ordinance also defines delivery riders as “natural persons using motorcycles with or without sidecars, excluding sedans and similar vehicles.” These riders, accredited as independent contractors or freelancers by digital platform companies, are responsible for transporting orders or parcels from merchants, their respective digital platform companies, or directly from customers. They receive payment for their delivery services accordingly.

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“The directive on the suspension of the collection of “pass-through fees” aims to enhance the efficiency of the transportation of goods across regions, as well as reduce logistics costs, resulting in lower consumer prices,” the resolution read.

The “pass-through fees” include charges imposed by local government units (LGUs) on motor vehicles transporting goods through national roads and other non-LGU-funded roads.

These fees, such as sticker fees, discharging fees, delivery fees, and market fees, have been seen as obstacles to the efficient transportation of goods, contributing to higher logistics costs and, consequently, elevated consumer prices.

The latest report from the Philippine Statistics Authority in Central Visayas shows that Cebu City’s inflation rate is at 4.6 percent. This means that the cost of living, particularly for food, housing, and transportation, has increased.

Although it is a slight drop from the 4.7 percent inflation rate in March 2024, it still presents difficulties for both residents and businesses in the city.

Prices remain high, which makes it more challenging for people to afford everyday essentials.

With this, Gealon urged the acting mayor to suspend delivery fees as it is seen as a critical step in alleviating some of these pressures.

By removing these additional costs, Gealon believes it is expected that the price of goods can be stabilized, making them more affordable for the general public. /clorenciana