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Members of the Philippine Liner Shipping Association (PLSA) have signalled that current bunker surcharge rates will be reduced by approximately 20 percent next month, Business Mirror reports.

Josefine Maitim, Executive Director of the PLSA, is reported to have said that member lines had decided to lower the surcharge in order to reflect the "true cost" of fuel. Further cuts may also take place if oil prices continue to decrease,

The surcharge rate is now expected to be reduced by 19.76 percent, which would be one of the largest cuts since the implementation of a series of hikes by PLSA member lines last year.

The rate reduction would affect a number of shipping companies including Oceanic Shipping, NMC Container Lines, Sulpicio Lines Inc., Negros Navigation Co., Lorenzo Shipping Corp. and Solid Shipping Lines.

Under Republic Act 9295 or the Domestic Shipping Act of 2004, ship operators are required by law to inform the government regulator of any surcharge rate changes and to publish the measure at least seven days before its implementation.

National shipping lines are forecasting negative growth for 2009 as a result of the global economic downturn, with a drop in the shipment of goods as demand for products decreases.

Cargo volumes are reported to have begun to fall as early as the second quarter of 2008 as the credit crisis began to gain momentum.

According to government data, total cargo volume dipped by almost 8 percent from 128.63 million metric tonnes between January and October 2007 to 118.45 million metric tonnes during the same period last year.

Meanwhile, domestic cargo volumes slumped by more than 5 percent to 57.23 million metric tons during the first ten months of 2008, whilst foreign cargoes fell by 10 percent to 61.22 million metric tonnes.