Mindanao ports
to get P3.3B for modernization program
THE Philippine Ports Authority has embarked on a ten-year
modernization program in Northern Mindanao that will
equip all major ports in the area with modern port facilities
such as passenger terminal buildings with restaurants,
executive lounges and child care centers, berthing facilities
and cargo storage areas. Northern Mindanao Port District
Office manager Ernesto Fernando said the port agency
has earmarked P3.3 billion for the program, which will
be completed by 2010.
Two of Northern Mindanao's major baseports in Ozamiz
City and Surigao City have already been modernized ahead
of other baseports with the completion of their new
passenger terminal buildings (PTBs) in 2002. Construction
of the 2,100-square meter PTB in Cagayan de Oro City
has already started. Formerly a transit shed, it has
been temporarily converted into an airconditioned modular
type of structure that can accommodate 600 passengers.
In the pipeline is the construction of the P40-million
PTB in Iligan City.
According to Fernando, about P700 million has also been
earmarked for the construction of an additional 700
meters for berth facilities and P96 million of cargo
storage for the port of Cagayan de Oro.
"Cagayan de Oro City is a booming city and is the
center of Region 10, being the gateway to Mindanao through
its seaport and airport. It is necessary that its major
port be modernized in order to serve the increasing
economic activities within the region and the entire
Northern Mindanao," he said. Additional berth facilities
worth about P900 million will also be constructed in
the baseports of Iligan City, Nasipit, Ozamiz City,
and Surigao City.
Fernando disclosed Northern Mindanao is envisioned to
be a leading agro-industrial area and trade center of
the country. The Cagayan de Oro-Iligan Corridor alone
is home to major enterprises in agriculture and industry
such as metals, construction, oleo chemicals, basic
chemicals and agriculture, aquaculture and agro-forestry,
he said."With the almost completed Cagayan de Oro-Bukidnon-Davao
Road, you can expect continuous increases in cargo volume
at the port of Cagayan de Oro," he said.
Last year, the transport and logistics
industry had to deal with a mixed bag of local and international
legislation that heavily impacted on the business. From
the International Ship and Port Facility Security Code
and the Customs Brokers Act of 2004 to the Domestic
and Overseas Shipping Development Act of 2004 and the
implementation of the Post-Entry Audit system, the industry
has never had to go through so many changes in just
one year. Below are the events that shaped - for better
or worse - the Philippine transport and logistics industry
last year. Related to this story are features on two
people (see related story) who we think made the biggest
splash in the forwarding business in 2004.
THE ISPS CODE
The International Ship and Port Facility Security (ISPS)
code is arguably the biggest and most ambitious anti-terror
policy implemented worldwide.
The Philippines signed the ISPS code in December 2002
as one of 165 contracting governments under the International
Maritime Organization (IMO). The code contains several
amendments to the 30-year-old Safety of Life at Sea
Convention of 1974. Its objectives include the establishment
of an international framework to detect security threats
and take preventive measures against security incidents
involving ships and port facilities used in international
trade; and establishing respective roles and responsibilities
of all parties concerned at the national and international
level to ensure maritime security.
For a time, there was widespread fear that the Philippines
could not meet the July 1, 2004 implementation deadline.
The IMO was firm that all ocean-going vessels and ports
serving the international trade should be certified
before the enforcement date or else cargo carried on
non-ISPS compliant vessels will be refused entry. The
ISPS code requires an assessment of the security threat
on ships and in ports and the development of plans to
counter such threats. In addition, ships will have to
be fitted with new equipment, notably automatic identification
and security alert systems.
Rudderless?
Months prior to the full implementation of the code,
there was no clear direction on how to go about adhering
to the code. Port and terminal operators had one question
on their minds: Who will pay for the additional costs
attendant to ISPS code implementation?
Shipping line agents in the Philippines, on the other
hand, were caught unawares, saying they were mainly
dependent on the move of their principals.
In the Philippines, budget was one of the biggest setbacks
to implementing a comprehensive port security plan,
complete with the installation of latest security equipment
like x-ray detectors for cargoes and laser fences for
high-risk areas. Terminal operators like the Asian Terminals
Inc. said it could impose port security charges to recover
their costs.
President Gloria Macapagal-Arroyo signed in April 26,
2004 Executive Order No. 311 designating the Office
for Transportation Security (OTS) under the Department
of Transportation and Communications (DOTC) as the single
authority responsible for the security of all modes
of transportation in the Philippines.
The transport department, in its Department Order No.
2004-29, delegated the OTS as the "Designated Authority"
and "Administration" for the ISPS code implementation.
Transport undersecretary Cecilio R. Penilla was appointed
head of the OTS.
In cooperation with the Philippine Ports Authority (PPA),
Maritime Industry Authority (MARINA) and the Philippine
Coast Guard (PCG), the authority drafted the National
Maritime Transport Security Program, which served as
the guidelines for ship and port operators to comply
with the code. The industry saw a flicker of hope for
the Philippines beating the ISPS deadline.
But IMO regional coordinator for Asia Brenda Pimentel
expressed disappointment over the government's lack
of clear responsibility in the adoption and implementation
of the code. There were also issues regarding the efficiency
of the OTS since only about 75% of all ports nationwide
were given their Statement of Compliance of a Port Facility
(SCPF) past July 1. The SOCs were good only for six
months. Meanwhile, only 77% of international ships received
their International Ship Security Certificates (ISSCs)
that time.
Passing US muster By September, the United States Coast
Guard announced that the Philippines made it to its
compliant countries' list. The same month, the IMO included
the country's major gateways in its database of compliant
ports.
In January, the OTS announced that 75 ports were granted
SCPFs valid for two years. These include the ten major
gateways in the country. As for the status of compliance
of Philippine-registered ships engaged in international
voyages, Penilla reported that 169 ships have been issued
the ISSCs. This is 99% of the 170 Philippine-registered
ships engaged in international voyages.
Assessment and verification of port security assessments
and plans are constinuously being conducted by OTS Teams
comprising experts from the OTS, PPA, MARINA and PCG.
R.A. 9280: PITTING CUSTOMS BROKERS AGAINST LOGISTICS
PROVIDERS
When Republic Act 9280 or the Customs Brokers Act of
2004 was signed into law in March 2004, the customs
brokerage community was elated. Finally, brokers said,
here was a law that would uplift the profession to the
same status as that of medicine, law or accountancy.
However, the law fast became a "threat" to
the freight forwarding and logistics sector. Many forwarding
firms offering brokerage services were alarmed of the
possible consequences that the new policy may inflict
upon their businesses.
One of the most hotly debated provisions of the Customs
Brokers Act is the prohibition against the corporate
practice of brokerage. Under the law, the practice of
customs brokerage will be limited to licensed customs
brokers and will be exclusively for individuals registered
as such under the Professional Regulation Commission
(PRC).
Brokers claim that most logistics firms are alarmed
by the law due to their wrong interpretation. "Logistics
services will still be there. The main objective here
is to put the practice of the profession in proper perspective,"
said a ranking official of a brokers' association.
On the other hand, business groups Philippine Chamber
of Commerce and Industry (PCCI) and Port Users Confederation
(PUC) objected to the law.
PCCI president Noemi Saludo said the law will result
in a "lose-lose" situation for importers and
exporters, employees of private and government sectors,
economic programs of the government, international trade
and transport, customs broker companies and even customs
brokers themselves.
PUC spokesman Atty. Romeo Sto. Tomas said the law may
result in mass layoff of workers, even more smuggling,
increased red tape in the bureaucracy and decreased
revenues for the national government in the importation
of goods.
The semiconductors and electronics sector claimed the
law will bring inefficiencies in the conduct of doing
business such as increased manufacturing costs, slower
turnaround time of materials and finished goods and
bureaucratic implication to the industry.
Delaying the IRR Various moves to impede the issuance
of the law's implementing rules and regulations (IRR)
were undertaken by shippers. Cases were filed before
trial courts nationwide. Senators Ramon Magsaysay, Jr.
and Richard Gordon filed with the Congress bills seeking
to amend the law.
The brokers' group led by the Chamber of Customs Brokers,
Inc. (CCBI) - the only accredited professional organization
for customs brokers in the country - remains steadfast
in its position supporting the law.
The PRC has already deferred for two years the implementation
of the law's so-called questionable provisions. These
provisions are section 6 or the Scope of the Practice
of Customs Brokers; subsection b of section 16, which
involves the requisite Bachelor's Degree in Customs
Administration for an applicant to take the licensure
exam; section 27 or the Acts Constituting the Practice
of Customs Brokers; and section 29 or the Prohibition
Against Corporate Practice.
The commission also removed the December 31, 2004 deadline
for the finalization of the IRR. With this, the BOC
reiterated the observance of status quo pending issuance
of the IRR, still under study by the Department of Finance.
THE POST-ENTRY AUDIT SYSTEM
In accordance with the World Trade Organization (WTO)
Customs Valuation System or the Transaction Value Method,
the Bureau of Customs (BOC) was given authority to conduct
an audit of the import and trading activities of importers,
and to some extent, customs brokers under the Post-Entry
Audit (PEA) system. The system allows fast-track cargo
clearance but the PEA team reserves the right to audit
importing firms up to three years after the cargo has
been cleared.
Late last year, the BOC issued Customs Administrative
Order No. 4-2004, implementing guidelines for the PEA.
The new administrative order is an amendment to CAO
5-2001, which implemented Republic Act 9135 or the Act
amending certain provisions of the Tariff and Customs
Code of the Philippines.
Burden to importers Despite the good intentions of the
PEA system, importers think the system is nothing but
a burden, particularly its record-keeping requirement
of three years. Among the documents and records that
must be kept include books of accounts, business and/or
computer systems and all other customs commercial data,
including payment records relevant for the verification
of the accuracy of the transaction value declared (eg,
orders, confirmations, bills of lading, airway bills,
permits, invoices, contracts, packing lists and correspondence).
Importing firms which fail to keep the records are subject
to an administrative fine equivalent to 20% on articles
of the importations for which no records were kept;
hold release of subsequent importations to answer for
the fine; and criminal prosecution punishable with a
fine of not less than P100,000 and imprisonment of up
to six years.
Earlier reports said more than 50 companies have already
been subject to compliance audit.
The implementation has not been easy, what with reports
of the inexperience of customs auditors, their insufficient
training in compliance sampling and audit techniques.
Importing companies said the BOC also lacks guidelines
to direct the trading community on how to address the
compliance requirements. In addition, they say there's
simply not enough time to conduct the audit considering
there are presently 15,000 BOC-accredited importers.
DOMESTIC AND OVERSEAS SHIPPING DEVELOPMENT ACT OF
2004
The domestic and overseas shipping sectors were lucky
in 2004. President Gloria Macapagal-Arroyo signed into
law Republic Act 9295 or the Domestic Shipping Development
Act (DSDA) in May last year and shortly after, the Amendments
to the Overseas Shipping Development Act (OSDA) or R.A.
9301.
The DSDA empowers the development of the domestic shipping,
shipbuilding, ship repair (SBSR) industries and ship
breaking and the full deregulation of the whole industry
through investment incentives, deregulation of the rates/operation,
enhancement of safety standards, compulsory insurance
coverage for passengers and cargoes, reasonable fines
and penalties and other constructive measures for a
strong and competitive domestic merchant fleet.
Investment incentives for domestic shipping include
exemption from value-added tax (VAT) on the importation
and local purchase of passenger and/or cargo vessels
of 150 tons and above, including engine and spare parts
of said vessels. To avail of the incentive, the vessels
to be imported must comply with the age-limit requirement
at the time of acquisition counted from the date of
the vessel's original commissioning as follows:
1) For passenger and/or cargo vessels; the age limit
is 15 years,
2) For tankers, 10 years, and
3) For high-speed passenger crafts, five years.
Another incentive is the exemption from value-added
tax on the importation of life-saving equipment, safety
and rescue equipment and communication and navigation
safety equipment, steel plates and other metal plates
including marine-grade aluminum plates, used for transport
operations.
This system of investment incentives shall be uniformly
applied also in shipbuilding and ship repair industry.
Deregulation
On the matter of domestic shipping industry deregulation,
domestic ship operators are authorized to establish
their own domestic shipping rates as long as effective
competition is fostered and public interest served.
Every domestic ship operator shall also have the right
to fix its own passenger or cargo rates, or both.
While elated by this development, domestic ship operators
and those planning to invest in the industry said the
law is not exactly what they expected because many provisions
in the original draft were deleted.
On the other hand, OSDA's salient features include the
expansion of the definition of 'Philippine overseas
shipping' and the extension of fiscal incentives to
shipping enterprises for the next ten years. The new
provisions would pave the way for a healthy investment
climate within the industry to attract and encourage
the establishment of private enterprises. The incentives
provided by the law will now also cover vessels acquired
through bareboat chartering.
The Filipino Shipowners Association , the group representing
the overseas shipping sector in the Philippines, gave
the law its approval. Yet, it said luring investments
requires the development of a whole gamut of factors
such as efficiency in the bureaucracy, availability
of basic infrastructure and services and transparency
of policies. While a package of incentives was granted
when the law was amended, other needs remain unheeded.
Angelito
Colona: Envoy of freight forwarding industry
IF there is one person who has had the greatest impact
on the transport and logistics business in the Philippines
in the last few years, this will probably be Angelito
"Lito" Colona. Colona - founder of the Eagle
Express Group - mined his long and fruitful experience
in the freight forwarding business to land several association
positions, not only in local but also regional groupings.
He broke through the international scene when he became
an active member of the ASEAN Freight Forwarders Association
(AFFA), of which he is now president - this being his
second term. As AFFA president, Colona is at the forefront
of ensuring the road is paved for the practice of total
logistics and multimodal transport. Colona is also the
chairman emeritus of the Aircargo Forwarders of the
Philippines, Inc. after having been its president for
two years. Previously, he was head honcho of the Philippine
International Seafreight Forwarders Association; he
was on the PISFA saddle for two consecutive terms.
Among the projects he pushed was the establishment of
an insurance brokerage for freight forwarders, Thru
Transport Insurance Brokers, Inc. - the stakeholders
of which are members of the board or past presidents
of AFPI and PISFA. The company has an alliance with
Thru Transport Club of London. It did not come as a
surprise that Colona spearheaded the creation of the
Federation of Freight Forwarders Associations in the
Philippines or FEDFAP. FEDFAP pushes for resolution
of common problems for the airfreight and seafreight
sectors.
The federation also led in the formation of the Ateneo-FEDFAP
Institute of Logistics and Transportation, through a
memorandum of understanding it signed with the Ateneo
de Manila Center for Continuing Education. The endea-vor
was launched during the AFFA meeting held in Manila
in December 2003.
Last year, Colona along with other industry leaders
found themselves campaigning for the improvement and
enhancement of the customs brokerage industry. He is
quick to point out that he is not against the Customs
Brokers Act of 2004 per se, but only wants assurances
that the legislation will not affect existing businesses,
including those in freight forwarding and customs brokerage.
This year, it would be interesting to see what Colona
will be up to next.
ERICH H. LINGAD has been at the center
of every issue related to the freight forwarding industry
in the last year or so. And why not? As president of
the Philippine International Seafreight Forwarders Association
(PISFA), the only nationally accredited freight forwarding
association in the Philippines, it is his job to steer
the over 100 member companies of the association - who
handle the bulk of the freight forwarding business in
the Philippines - to safe grounds.
Lingad, who has been in the business for more than ten
years now, is also the concurrent vice president for
Information Technology of the Port Users Confederation.
Arguably one of the youngest leaders in the freight
forwarding and logistics business, Lingad began his
career as an account/sales executive at K-Line in 1994
before transferring to Uni-Trans.
Sometime later, he joined OOCL where he was further
exposed to the ins and outs of the business. In the
last five years, he has been general manager of International
Consolidators Philippines, Inc. (ICPI), where he is
also co-owner. An industrial management engineer by
training, Lingad earned an MBA from the Ateneo de Manila.
Since becoming PISFA president, Lingad has given much
of himself in ironing out issues affecting the business.
Last year, we saw him championing logistics providers'
causes at the showdown with the customs brokerage community
over Republic Act 9280 or the Customs Brokers Act of
2004. We also saw him at the forefront of discussions
on amendments to the Philippine Shippers' Bureau's adminisntrative
order to ensure the industry is not serviced by fly-by-night
firms.
He says one of the things he learned at PISFA is the
value of consultation. "We are a fair association;
we listen even to non-members. This way we can encourage
them to join the association. What I learned in PISFA
is to listen to everyone. Always consider what's best
for everybody not just what is best for your company.
Consulting is very important," Lingad said.
As much as he loves helping the industry, he feels he
needs to give way once his term as president wraps up
in June. "The time I've shared is enough already.
I can still help but I don't necessarily have to be
a director," he said.
Another
pier in Misamis Oriental up for construction
TACOMA INTEGRATED PORT SERVICES, INC
is planning to put up a world-class pier at the Phividec
Industrial Estate in the municipality of Tagoloan, Misamis
Oriental.
A Phividec source said Tacoma has submitted a proposal
to buy a lot and construct a $12-million pier near the
Mindanao Container Terminal.The pier will be comparable
to modern structures in Southeast Asia, the company
said. The facility will cater to both international
and domestic cargoes such as fertilizer, grains, cement,
and fresh fruits. Top-of-the-line equipment similar
to the one at the Subic Bay Freeport Zone will also
be installed.
The 3,000-hectare Phividec Industrial Estate is currently
the biggest industrial estate in the country today.
It covers the municipalities of Tagoloan and Villanueva.
The first and biggest locator at the estate is the Philippine
Sinter Corp., a subsidiary of Kawasaki Steel of Japan.
The construction of the pier will complement operations
of MCT, which recently resumed upon the lifting of the
temporary restraining order and preliminary injunction
from the regional court.
Clark
seen as potential hub for Asia's budget airliners
THE Diosdado Macapagal International
Airport in Clark Economic Zone is being eyed by the
government as the hub for budget carriers in Asia.
"We want Clark to be the hub for low-cost carriers.
There are already three budget airlines - from Malaysia,
Thailand and Singapore - that have expressed interest
to land there," Transportation and Communications
secretary Leandro R. Mendoza said.
To date, Asiana Airlines is the only international passenger
carrier utilizing the airport for daily flights to and
from South Korea.
Mendoza said the government is willing to provide incentives
for other low-cost carriers interested to operate in
the area. He added the Department of Transportation
and Communications would also look for private shuttle
operators to drive Clark passengers to Manila.
The transport department earlier said it had offered
landing rights to 52 airliners to operate at Clark.
The government is also set to upgrade the airport for
P2.5 billion, to cover passenger tubes, and cargo and
logistics facilities among others.
Cebu
Pacific partners with SIA in $5M maintenance depot
CEBU PACIFIC AIR, a unit of publicly
listed JG Summit Holdings, said it has formed a joint
venture with Singapore Airlines Ltd (SIA) for the establishment
of a $5-million line maintenance depot at the Manila
International Airport.
Cebu Pacific president Lance Gokongwei said the depot
will be operational by April. SIA Engineering Co Ltd
owns 51% of the joint venture and the rest is held by
the Philippine carrier. This is SIA's third line maintenance
joint venture outside Singapore.
The Manila International Airport Authority
(MIAA) registered a 163% rise in net income to P659.4
million in 2004 from the P250.9 million earned in 2003.
This was attributed to improved efficiency in the operation
of the country's international airports.
Based on an unaudited financial report presented to
Congress, MIAA's operating expenses declined 12.7% to
P2.7 billion year-on-year partly in line with President
Arroyo's call for austerity among government companies.
Its gross operating income improved 7.9% year-on-year
to P3.8 billion due to better revenues from aeronautical
fees and passenger service charges.
The increase in the number of international and domestic
flights which generated higher aeronautical fees was
also boosted by a higher foreign exchange rate in 2004.
Meanwhile, international and domestic departing passengers
grew 22% and 17%, respectively, resulting in higher
revenues from the passenger service charge. MIAA general
manager Alfonso Cusi reported the agency contributed
P1.1 billion to the national treasury in the form of
taxes and dividends last year.
He said MIAA paid P216.2 million in taxes, P231.5 million
in dividends and P613.5 million representing the mandatory
20% share of the national government in its gross revenues.
Contrary to earlier reports, the MIAA chief clarified
that whatever benefits employees derived from the agency
are aboveboard and in accordance with the Salary Standardization
Law. "We would like to clarify that MIAA employees are
not overpaid nor overcompensated. Our personnel are
fairly and justly compensated as provided by law, under
the salary standardization program," he said.
PIRACY at sea fell 26% in 2004 though
violence rose in the trade-critical Malacca Straits,
according to the International Maritime Bureau (IMB).
It noted the number of reported attacks on merchant
shipping dropped to 325 versus 445 in 2003. In an IMB
document provided by the Philippine Seafarers Promotions
Council (PSPC), it showed there was a significant drop
in the number of attacks in the Philippines, Vietnam,
Bangladesh, India, the Caribbean and in the Red Sea
and Gulf of Aden.
Bangladesh saw some of the best improvement with only
17 attacks compared with 58 in 2003. The data said although
the decline in the number of attacks is to be welcomed,
there is concern that in some key hot spots the situation
has deteriorated. The IMB said Indonesia remained the
world's top piracy black spot.
It ranked the Malacca Straits, one of the world's busiest
sea lanes, second worst despite joint military patrols
to deter crime and increase security. Many of the attacks
were serious in the strategic channel with vessels being
fired upon and crews kidnapped for ransom.
The narrow strait between Malaysia and Indonesia, with
Singapore at its southern entrance, carries more than
a quarter of the world's trade and almost all of Japan
and China's crucial oil imports. The IMB said the number
of mariners killed worldwide increased to 30, up from
21 in 2003.
A total of 86 crew members were kidnapped with gangs
demanding ransoms for their release. The agency said
oil-producer Nigeria was the most dangerous area in
Africa for piracy and armed robbery. Meanwhile, attacks
in Lagos accounted for the highest number in a single
port. Nigeria's oil ports and oil tankers were also
targeted.
Balikpapan, a major oil port in Indonesia, had the third
highest number of attacks reported. A quarter of attacks
worldwide were on oil tankers, the bureau said. Other
areas showing a marked increase in attacks included
Malaysia, the Singapore Straits, South China Sea and
Haiti.
MARINA
gears up for ship safety inspection function
THE Maritime Industry Authority (MARINA)
said it is hoping to sign the memorandum of agreement
(MOA) with classification societies and release a plan
of action on its assumption of the ship safety inspection
function next month. The maritime agency has already
adopted the Ship Safety Inspection System (SSIS) pursuant
to the implementing rules and eegulations (IRR) of Domestic
Shipping Development Act of 2004 or Republic Act 9295.
The act mandates MARINA to inspect all Philippine-registered
ships and equipment onboard ships to ensure and enforce
compliance with prescribed safety standards and regulations.
The maritime regulator is exploring augmentation of
its technical personnel by outsourcing the conduct of
ship inspection for classed ships to accredited classification
societies.
MARINA administrator Vicente T. Suazo, Jr. said the
effectivity and integrity of ship inspections need to
be fostered, considering its crucial nature and vital
importance to the public and to the country's economy
in ensuring the continued safe operation of Philippine-registered
ships. The SSIS, through its manual, incorporates the
basic policies, guidelines, procedures, standards, references
and checklists that will govern ship inspectors during
inspections and issuance of ship safety certificates.
"The SSIS is designed to foster and ensure a systematic,
uniform, consistent and effective conduct of ship safety
inspections nationwide," Suazo said. The adopted SSIS
was initially drafted in October 2003 and has been further
revised to incorporate comments/suggestions received
from seminars and discussions conducted on it. The MARINA
is currently conducting orientation seminars/workshops
on the SSIS for its 113 technical personnel who will
be authorized to undertake ship inspections nationwide.
MARINA Maritime Safety Office director Emerson M. Lorenzo
said there will be another workshop on February 17-18
for Cagayan de Oro, Davao, Cotabato and Zamboanga regional
office ship inspectors.
THE Port Users Confederation (PUC) has
lauded the appointment of incoming Customs commissioner
Alberto Lina. Lina will take the place of George Jereos
who is due to retire next week. PUC said Lina is fit
to be the next Customs administrator because of his
extensive background in the forwarding and brokerage
business.
"Bert Lina is open-minded, possesses a wealth of experience
in customs operations which would help boost his drive
in the realization of his primordial responsibility
to raise revenues for the government," a ranking PUC
official said. "Lina's appointment is perceived as a
very positive move towards the attainment of government
fiscal targets as well as the elimination of smuggling
and graft and corruption," he added
PHILIPPINE exports went up 2.9% last
December to $3.268 billion from $3.175 billion in the
same month in 2003, reported the National Statistics
Office (NSO). Export earnings for the whole of 2004
rose 9.3% to $39.598 billion from $36.231 billion in
2003. The government expected a 10% growth in exports
last year. The 2.9% rise in exports in the year through
December 2004 was the lowest in 12 months, the NSO noted.
Shipments to Japan, the country's current biggest market
with a 19.3% share, grew 18.4% in the 12 months through
December to $630.8 million.
Exports to the United States, worth 15.6% of total shipments,
were $508.59 million in December, down 17.3% from a
year earlier. Exports to the Netherlands grew 77.1%
in the 12 months through December, and to China by 33.2%.
Other top markets in December were Hong Kong, Singapore,
Malaysia, Taiwan, South Korea, and Vietnam.
The country's trade deficit in the first 11 months of
2004 was $924 million, down from $1.369 billion in the
same period of 2003. Import growth of 2.4% in the 12
months through November marked a slowdown from 16.3%
in the year through October and 14.8% in the year through
September.
The Philippines, which had a trade deficit of $1.27
billion in 2003, imports almost all of its electronic
parts for assembly and export, as well as crude oil,
machinery, transport equipment, rice, and corn. Last
year, the electronics export industry enjoyed 10.2%
growth, to P26.644 billion or 67.3% of aggregate export
revenue. Garments, the country's second top export earner,
recorded $2.171 billion in earnings last year.
Aside from semiconductors and apparel and clothing accessories,
other top export products last year were ignition wiring
and other wiring sets in vehicles, aircrafts and ships,
petroleum products, coconut oil, cathodes and sections
of cathodes, of refined copper, woodcrafts and furniture,
bananas (fresh), metal components, and other products
manufactured from materials imported on consignment
basis.
Socioeconomic Planning secretary Romulo L. Neri noted
the decline in export earnings last December was the
result of lower income from the sale abroad of agro-based
products and garments. Despite the downtrend on a month-on-month
basis, Neri said the government was sticking to its
10% growth target for 2005 even as it announced last
December that export growth could decline to 8% because
of slower global economic growth.
"The garments industry remains competitive especially
with respect to the high-end garments. The garment manufactures
are very competitive in specialized garments, where
orders are small but require quick delivery," he said.
