INTERNATIONAL airfreight
forwarding companies operating in the Philippines
are considered public utilities and should therefore
follow the 60/40 nationality requirement stated in
the 1987 Constitution.
This was the gist of
an opinion issued recently by acting Justice Secretary
Ma. Merceditas N. Gutierrez in response to a Civil
Aeronautics Board (CAB) query on whether it should
allow international airfreight forwarders to operate
with foreign equity of more than 40%. Department of
Justice (DOJ) Opinion No. 49, series of 2004, said,
"They (international airfreight forwarding companies)
by the nature of their undertaking, will serve all
those who wish to avail of their services and are,
therefore, public utilities and should therefore comply
withÉ constitutional and statutory provisions."
CAB deputy executive
director Carmelo Arcilla said the aviation board will
soon come up with measures to implement the nationality
requirement. He said currently operating airfreight
forwarding firms whose foreign equity exceeds 40%
will be given time to restructure their companies.
"It might take a year or two but we will definitely
implement this ruling," he said.
The restructuring, he
added, should ensure that "all executive and
managing officers of such corporation or association
must be citizens of the Philippines" as espoused
in paragraph two of Section 11, Article XII of the
1987 Philippine Constitution. Earlier the Aircargo
Forwarders of the Philippines, Inc. filed with the
CAB an opposition to airfreight firms' application
to operate if they are majority owned by foreign nationals.
In turn, CAB sought
a DOJ opinion, noting provisions of the 1987 Constitution
which state that "No franchise, certificate,
or any other form of authorization for the operation
of a public utility shall be granted except to citizens
of the Philippines or to corporations or associations
organized under the laws of the Philippines at least
sixty per centum of whose capital is owned by such
citizens." CAB was also compeled to seek a DOJ
opinion to clarify earlier conflicting interpretations
issued by the same agency, particularly DOJ opinion
no. 218, series of 1975 and no. 20, series of 1999.
The first stressed airfreight
forwarders are akin to international airlines and
therefore not covered by the nationality requirement.
The second, on the other hand, went against the first
opinion and introduced the 60/40 rule as mandated
by the 1987 Constitution.
A CAB source said many
local freight forwarding firms have appealed to the
CAB to act on the growing number of multinational
freight forwarding corporations which threaten the
operation of small ones.
"The locals are
opposing it," the source said, adding most local
forwarding firms are threatened by the possibility
of multinational companies predominating the international
airfreight forwarding business in the Philippines.
PPA
sees no major trade disruption with ISPS Code implementation
THE Philippine Ports
Authority (PPA) said it expects no major trade disruption
with the July 1 enforcement of the International Ship
and Port Facility Security (ISPS) Code. This, even
if some ports have yet to be declared compliant to
the code.
In a press briefing,
PPA general manager Alfonso Cusi said all 22 ports
under PPA's jurisdiction have fully complied with
the required submission of port facility security
assessment and security plans. Despite the absence
of Statements of Compliance, he said, all 22 ports
will still be able to cater to ISPS-compliant international
vessels through the Declaration of Security (DOS).Cusi,
however, admitted there will be possible delays since
the DOS requires documentation.
PPA assistant general
manager for Operations Benjamin Cecilio said the DOS
ensures a port or a vessel plying international voyages
is ISPS compliant despite the absence of a Certificate
of Compliance.
"A memorandum of agreement will be signed by
the port representative and the ship operator prior
to the interface. This will need proper documentation,"
he noted.
Under provisions of
the ISPS Code, a DOS shall be completed before an
interface starts between a vessel and a port facility
or another vessel if: they are operating at different
maritime security levels; one of them does not have
a security plan approved by a contracting government;
the interface involves a cruise ship, a vessel carrying
certain dangerous cargoes; or the security officer
or either of them identifies security concerns about
the interface.
Cecilio said the 22
major Philippine ports that cater to foreign vessels
are the only ones required to comply with the ISPS
Code. These are the Manila International Container
Port, PMOs South Harbor, Surigao, Pulupandan, Cagayan
de Oro, Legaspi, Puerto Princesa, Nasipit, Limay,
San Fernando, Calapan, Ozamis, Dumaguete, General
Santos, Cotabato, Batangas, Davao, Iloilo, Tagbilaran,
Iligan, Zamboanga and Tacloban.
He said domestic ports have decided to submit as well
their security plans considering the measures have
been in place even before the ISPS Code was adopted.
Earlier, the Office for Transportation Security (OTS)
reported that of the 117 ports in the Philippines,
the agency has signed 38 Statement of Compliance of
Port Facility (SCPF) as of June 29. Still being verified
and assessed by OTS teams are 63 ports.
For the 16 remaining
ports, their Port Facility Security Assessments (PFSA)
and Port Facility Security Plans (PFSP) submitted
to the OTS were returned for further review and correction,
said OTS head Cecilio Penilla.
Included in the 38 ports
which received their SCPF are: Alson Cement, Iligan
City; Asian Terminal, Inc.-Mariveles Grain Terminal,
Mariveles, Bataan; Batangas Bay Terminal, Inc., Batangas
City; Batangas Refinery, San Pascual, Batangas; Cagayan
de Oro Oil Co., Inc., Cagayan de Oro City; CALTEX
Pandacan Terminal, Jesus St., Pandacan, Manila; Caltex
Phils. (Davao City), Davao City; Cebu International
Port, Cebu City; CHEMPHIL/LMG Chemicals, Corp., Pinamucan,
Batangas City; Del Monte Phils., Inc., Cagayan de
Oro City; DOLE Philippines Inc., Calumpang, General
Santos City; General Milling Corp., Tabangao, Batangas
City; Global Marine Systems Limited, Bauan, Batangas;
Harbour Center Port Terminal, Inc., Vitas, Tondo,
Manila; Himmel Industries, Inc., Batangas City; Petron
Davao Depot, Davao City; Petron Pandacan Terminal,
Jesus St., Pandacan, Manila; Petron Refinery-Limay,
Limay, Bataan; PNOC, Batangas Coal Terminal, Bauan,
Batangas; PPA-Port Management Office Road, Manila;
JG Summit Petrochemical Corp., Bgy. Simlong, Batangas
City; Nation Petroleum Corporation, Bgy. Castañas,
Sariaya, Quezon; and Petron Bawing Depot, General
Santos City and Cagayan de Oro.
Meanwhile, Singapore-based International Maritime
Organization (IMO) consultant Michael Chen stressed
the IMO has no plans of extending the deadline for
the ISPS Code implementation. Slightly disappointed
with the performance of contracting governments worldwide,
he said the enforcement of the ISPS Code will determine
"who shall live."
In answer to a PortCalls
emailed query, Chen - the key speaker to a recent
PortCalls conference on the ISPS Code - said: "This
is an issue for the market to determine. Some ports
may close down because shippers avoid port facilities
that have yet to achieve ISPS compliance.
Likewise, ships that
are not ISPS compliant are likely to have lesser business
because shippers will not want their cargoes carried
by non-compliant ships, which may result in delays."
International Container
Terminal Services, Inc. (ICTSI) assured port users,
especially exporters, that there will be no delays
in servicing cargo at the Manila International Container
Terminal (MICT) with the global implementation of
the International Ship and Port Facility Security
(ISPS) Code of the United Nation's International Maritime
Organization (IMO).
"It will be business
as usual at the MICT upon the effectivity of the ISPS
Code on July 1," said Francis M. Andrews, ICTSI Senior
Vice President and General Manager of the MICT, ICTSI's
flagship operation. "Being ISPS compliant means that
your cargo will be moved, and moved with no hindrances.
No new cargo handling procedures were introduced,
and we assure you of continued timely, efficient and
quality cargo handling services at the MICT," he added.
Even before the ISPS
compliance activities, ICTSI has been continuously
investing on safety and security systems and equipment,
and has been developing and implementing policies
and procedures on port safety, security and environment
protection.
Moreover, ICTSI has
continuously conformed to international standards
of operations as manifested by certifications in IS0
9002 quality management standards and ISO 14001 environment
management standards. "We were already practicing
all the ISPS requirements long before the Code became
mandatory. The ISPS Code merely reinforced our existing
systems and procedures," said Andrews. ICTSI is coordinating
closely with shipping lines calling at the MICT to
ensure that the vessels are also compliant with the
ISPS Code.
Exporters are urged to
choose ISPS compliant vessels that will transport
their goods to ensure that their cargo reach its destination
at the appointed time.
FOR the first five months
of the year, the Philippine Ports Authority (PPA)
earned a net income of P1,005.40 million, up 28.46%
compared with P782.65 million earned in the same period
last year.
In May alone, its net
income went up 29.47% to P778.28 million from P601.13
million during the previous year. Revenue from January
to May totaled P2,231.95 million, up 2.34% from last
year's P2,180.88 million. This was also 0.18% higher
than the P2,227.98 million target. Operating expenses
for the period increased P23.65 million or 2.34% primarily
due to accelerated dredging activities and payment
of employee benefits.
PHILIPPINE
PORTS AUTHORITY Financial Performance Report
(January to May 2004)
In Million Pesos
2004
2003%
Deviation
Actual
Target
Actual
Target
2003
Gross Revenue
2,231.95
2,227.98
2,180.88
0.18
2.34
Port Revenue
2,131.00
2,128.61
2,079.83
0.11
2.46
FMI
100.95
99.37
101.05
1.59
-0.1
Expenses
1,226.55
1,339.07
1,398.23
8.4
12.28
Operating
1,034.13
1,137.33
1,010.48
9.07
-2.34
Non-Operating
192.42
201.74
387.75
4.62
50.38
NET INCOME
1,005.40
888.91
782.65
13.1
28.46
Source: Philippine
Ports Authority
Revised
Revenue and Expenses Projection for CY 2004
2004
2003%
Deviation
New
Original
Actual
Original
2003
Gross Revenue
5,503.97
5,500.00
5,401.52
0.07
1.9
Port Revenue
5,290.52
5,288.13
5,142.36
0.05
2.88
FMI
213.45
211.87
259.16
0.75
-17.64
Expenses
4,118.50
4,220.70
4,554.25
2.42
9.57
Operating
3,591.02
3,694.22
3,623.64
2.79
0.9
Non-Operating
527.48
526.48
930.61
-0.19
43.32
NET INCOME
1,385.47
1,279.30
847.27
8.3
63.52
Source: Philippine
Ports Authority
The increase, however,
is well within the budget, PPA noted. Non-operating
charges, on the other hand, went down 50.38% due to
changes in the guidelines on the accounting treatment
on the losses on loan revaluation of foreign loan
transactions. The agency also revised its 2004 net
income to grow 8.4% to P1,385.47 million from P1,279.30
million. The 2004 figure is 63.52% over the actual
income of P847.27 million during the previous year.
Targeted gross revenue,
on the other hand, is P5,503.97 million, up 0.07%
from the original projection of P5,500.00 million.
This is also 1.9% higher compared with the actual
revenue in 2003 which amounted P5,401.52 million.
The PPA has projected a port revenue of P5,290.52
million and a fund management income (FMI) of P213.45
million, which are up 0.05% and 0.75%, respectively.
The port agency is also expecting increased expenses
of P4,118.50 million for the full 2004.
This is 2.42% higher
than the original projection of P4,220.70 million
and 9.57% over last year.
PUC:
Customs Brokers Act a disincentive to brokers
THE implementation of
Republic Act (RA) 9280 or the Customs Brokers Act
of 2004 may serve as a deterrent to customs brokers
with no resources or those just starting to practice
the profession.
"The law appears to be
a disincentive to customs brokers who having meager
resources or are just starting to practice their profession
chooses to band together as a single legal entity
to share their resources, and be saved from the prospect
of being dissuaded and be excluded from earning their
keep," Port Users Confederation (PUC) president Oscar
B. Brillo said in a letter to Professional Regulation
Commission chairperson Antonietta Fortuna-Ibe.
Various sectors of the
transport industry earlier expressed concern over
the legislation's prohibition against corporate practice.
Section 29 of RA 9280, states that "The practice of
customs brokers is a professional service, admission
to which shall be determined upon the basis of individual
and personal qualifications. No firm, company, or
association may be registered or licensed as such
for the practice of customs broker profession."
Brillo stressed practitioners
may have a better chance at succeeding in their profession
if they operate as a corporation considering the prospect
of expanded marketing coverage, lesser overhead expenses,
shared expertise and accountability.
The law may also run
counter to the free business atmosphere fostered by
the Civil Code and the Securities Act of the Philippines,
he said. "Excluding other groups of practicing customs
brokers whose companies have long been in existence
and have been established, recognized, accepted and
registered with proper authorities would seem to negate
all that has been done to promote the freedoms fostered
by the Code," Brillo said.
Enacted in March, the
law is intended to professionalize the practice of
customs brokers, eliminate technical smuggling prevalent
in the sector, and help enhance the revenue collection
of the Bureau of Customs.
Brillo said the PUC is
appealing to the commission to consider its concerns
before the implementing rules and regulations are
finalized and implemented.
ABOITIZ TRANSPORT SYSTEM
CORP. (ATSC) will launch a direct roll-on/roll-off
(ro-ro) service from Batangas to San Jose, Mindoro,
areas predominantly being served by small ro-ro operators.
In a press briefing,
ATSC president and chief executive officer Enrique
M. Aboitiz Jr. said the shipping firm will launch
the Batangas-San Jose link "in a couple of months".
With the new route, travelers going to Aklan from
Luzon would not have to take the five-hour travel
from Roxas to Caticlan.
"Travelers may reach
Caticlan directly from San Jose," Aboitiz said. Earlier,
the Philippine Ports Authority (PPA) reported the
number of vehicles traversing the Roxas-Caticlan link
of the Strong Republic Nautical Highway (SRNH) has
exhibited significant growth since December.
PPA said private cars
and rolling cargoes totaled 2,800 from December to
January, by far the highest recorded since the introduction
of the SRNH. The port agency added these months were
considered peak periods due to the Christmas season.
The Roxas-Caticlan link serves as the indicator of
the volume of travelers traversing Luzon and Visayas.
At present the route
is being served by Montenegro Shipping Lines, Starlite
and PhilHarbor shipping lines, offering a total of
six trips daily.
