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Batangas port

Meneleo Carlos, chairman of the Philippine Export Development Council (EDC) Networking Committee on Transportation and Logistics, recently unveiled the committee’s strategies toward the creation of seamless transportation and logistics to facilitate trade.

Topping the list is the promotion of the Subic-Clark-Batangas Corridor as Luzon Intermodal Logistics Hub. Toward this end, Carlos said an initial positive result is the scheduled maiden call of Singapore-based MCC Transport at Batangas Port on December 24. This should be the start of a weekly call that will bring goods to and from Batangas through various Asian routes.

“This initiative will not only decongest Manila but is expected to reduce transport costs, improve service quality, enhance the country’s competitiveness, and alleviate poverty through the creation of economic opportunities within the Subic-Manila-Batangas Corridor,” Carlos said at last week’s National Exporters Congress.

“The good news is that the basic infrastructure network is already in place. We have expanded and extended the South Luzon Expressway, completed the second phase of the Southern Tagalog Arterial Road that leads all the way to the port of Batangas, improved the North Luzon Expressway, completed the Subic-Clark-Tarlac Expressway (SCTex) that leads all the way to Subic Port. Now we are even extending SCTEx all the way to La Union via the Tarlac-Pangasinan-La Union Expressway.”

Expanding the ro-ro network

The second strategy is to expand the country’s roll-on, roll-off (ro-ro) network which interestingly has inspired the ASEAN Ro-ro Network. The plan is anchored on the Masterplan on ASEAN Connectivity adopted during the 17th ASEAN Summit in October 2010. Contained in the masterplan is the Philippine initiative to establish an ASEAN ro-ro shipping network as one of the key strategies to enhance physical connectivity in the region.

The EDC committee likewise submitted proposals to include in the agenda of President Benigno Aquino III the signing of a memorandum of understanding between the Philippines and China on ro-ro and issuance of an executive order declaring chassis-ro-ro as part of the ro-ro service, Carlos said.

In a separate development, the Philippine Ports Authority (PPA) emphasized it needs to build six more ports, mostly in Visayas and Mindanao, to complete the country’s ro-ro transportation system.

PPA assistant general manager Raul Santos said the agency will spend for the construction of the ports, which will continue the previous administration’s thrust of investing in far-flung areas even if it has very little or no financial viability at all.

Air transportation

Meanwhile, in promoting liberalization of air transportation, Carlos highlighted the importance of bilateral air talks, of which those with Singapore, Bahrain, Turkey, China, Malaysia, Vietnam and Sri Lanka have so far been concluded.

He lauded the issuance in March this year of EO 29 which promotes secondary gateways and liberalized Philippine aviation by easing restrictions on foreign airlines in select international airports outside Metro Manila. EO 29 is expected to boost tourist arrivals and investments in the country, he said.

Carlos also noted the completion of the land use plan for Diosdado Macapagal International Airport (DMIA), as well as pushed for the approval of the DMIA budget proposed under the private-public partnership (PPP) next year.

On airline taxation, Carlos reiterated the call of business for the Department of Foreign Affairs to allow foreign air carriers to exercise the option to register for value-added tax in lieu of percentage tax (i.e. common carrier tax) imposed under Section 118 of the 1997 Tax Code.

A support policy direction is for Congress to sponsor and support the passage of a bill seeking to rationalize the airline tax regime through amendments of the 1997 Tax Code, he added.

Another controversial issue that involves Customs Immigration and Quarantine can be resolved with the issuance of an EO for 24/7 operations in all international airports and seaports and to charge any overtime on the budget of the departments.

To facilitate infrastructure development, he called for the “seeding of PPP” and implementation of policy reforms to attract investments in this area.

The bottomline is to reduce transport cost and facilitate trade, he noted. Part of the game plan under this strategy is the issuance of an EO repealing Letter of Instruction 1005-A allowing PPA to share 10% to 20% in revenues from cargo-handling operations of ports.

“This is a clear case of conflict of interest where the regulator benefits from its own regulation,” he said. “Towards this end, there is a need to separate the development and regulatory functions of the PPA, the Civil Aviation Authority of the Philippines and similar agencies.”

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