BOC,
US Customs sign deal on advance data transfer
THE Philippine Bureau of Customs (BOC)
and the United States Customs are set to sign an agreement
that will strengthen the anti-smuggling campaign of
both countries.Newly-installed Customs commis-sioner
Alexander Arevalo, in an interview, said the Philippines
would benefit more once the pact is signed within the
next three months.The BOC and the US customs are now
finalizing conditions of the Data Agreement on Revenue,
Trade Transparency System (DARTS). Funding for the project
is $250,000, which the BOC is still trying to source.
"The agreement, when signed, will give the Philippines
the advantage to access customs data on all Philippine-bound
shipments ahead of time. We would have already checked
the cargoes before they actually arrive," Arevalo
explained.He added that the scheme would establish an
electronic system wherein the US customs will send data
to its Philippine counterpart on all Philippine-bound
shipments from US ports, eventually giving local authorities
the power to evaluate the real trade value of the shipment
while it is in transit. The system works both ways.
The move is one of the strategies being devised by the
BOC when it totally revamped its anti-smuggling campaign
earlier this year.The bureau is also talking to the
Association of International Shipping Lines to give
the agency advance information on incoming cargoes at
least 12 hours prior to arrival for shipment evaluation.To
date, information on imported cargoes is submitted five
days after arrival at Philippine ports giving customs
authorities little time to examine the shipment particularly
the true value of the transaction.
Arevalo added that consignees may no longer underdeclare
or misdeclare the shipment, particularly those imported
cargoes from the US.The BOC is also negotiating with
Thailand to enter into the same agreement and expects
the same to be signed before yearend. Negotiations are
also ongoing with other Asean countries to forge such
agreements."Such contract will definitely boost
trade in the region at the same time curtail or lessen
smuggling in the country," the BOC chief said.
THE Maritime Industry Authority (Marina)
is seeking the help of Japanese shipbuilders and investors
to get its prototype ship project going.Marina administrator
Vicente Suazo Jr. said the agency would request second-hand
shipbuilding equipment, training grants for Philippine
naval architects and engineers and investment from the
Japanese to invigorate the country's waning shipbuilding
industry.
"Japan is the ideal partner in this venture as
their shipyards are considered the best in the world
in terms of production, manpower and innovation,"
he added.Suazo said Marina will formalize its request
with the assistance of the Japanese International Cooperation
Agency.Earlier, the regulatory agency urged local shipbuilders
to pool their resources to design and construct the
country's first ever steel-hulled ship.
It also said that resource pooling played a key role
in the success of shipbuilders in Europe and the United
States. Marina added this ensures the making of a quality
product that will also be cost efficient and globally
competitive.The proponents of winning ship designs will
be rewarded with tax incentives and be assisted by government
in marketing and promoting their product, Suazo said.
The agency earlier released specifications of its prototype
vessel to the 482 shipbuilders in the country and is
now awaiting replies regarding possible modifications
or upgrades.
The prototype ship must weigh around 500 gross tons
and must have locally available spare parts. Marina
said this would lessen the Philippines' dependence on
second-hand vessels coming from China, Japan and South
Korea and the drain importation places on the country's
dollar reserves.
LOCAL airlines and cargo companies
welcomed the planned pullout of Federal Express (FedEx)
from Subic Freeport in 2008, saying the US express carrier's
operations in the country was in violation of the Constitution.Robert
Lim Joseph, president of Save Our Skies (SOS), said
local airlines and freight forwarding companies were
not surprised when FedEx announced recently that it
was closing its Asian hub in Subic and transferring
to Guangzhou, China in 2008.
"This only shows that foreign companies would go
where the market is. China is a big market for the United
States. The company sees more traffic between US and
China and other Asian destinations," Joseph said.He
said FedEx would only use the Philippines as transit
point to other destinations in Southeast Asia when it
transfers its operations to China.
Joseph added that the pullout would not have a negative
economic impact on the Philippines since FedEx's investment
is insignificant and the company only pays a small amount
of taxes with the bulk still paid in the US. "Their
operation here did not even result in lower cargo rates,"
Joseph said. On the contrary, he said, the FedEx pullout
would return the business it has taken away from local
and foreign carriers and local freight forwarding companies."Cargo
destined from the US to the Philippines and vice versa
will still be there even without FedEx," he added.
According to Joseph, the decision to allow FedEx to
establish a hub in Subic in 1995 was not a "win-win"
situation."The Philippine government trumpeted
over nothing," he said, referring to its delight
when the government got FedEx to set up its hub in Subic
over other competing areas. "The government just
surrendered its patrimony and went against the Constitution."
He said Subic is also not viable as an international
airport because of limited space.
"Subic is more suitable as a port because of its
deep water. The former Clark Airbase in Pampanga is
more suited as an international airport as it has a
huge land space," Joseph emphasized.Earlier, the
SOS protested the alleged 7th freedom flights of FedEx
in violation of the Constitution. Seventh freedom gives
a carrier operating entirely outside the territory of
the flag state to fly into the territory of the grantor
state and there, discharge or take on traffic coming
from or destined for a third state or states.
The SOS said the RP-US Air Transport Agreement (ATA)
does not allow 7th freedom flights by US cargo carriers.Local
freight forwarding companies have also complained that
FedEx and foreign express operators United Parcel Service
(UPS) and DHL are now engaged in domestic commerce by
directly competing with local cargo agents.They claimed
that although FedEx, UPS and DHL are known as cargo
airlines, they are in fact operating as air freight
forwarders competing with local cargo forwarders.
INTERNATIONAL airlines Emirates, KLM
Royal Dutch and Korean Air recently petitioned the Civil
Aeronautics Board (CAB) for an increase in fuel surcharge
by $12-$80 due to projected oil price increases in the
world market.Emirates applied for an additional $80
round-trip fee for all passengers flying from the Philippines
while KLM wants to collect an additional $30 for its
intercontinental flights, $27 for North Atlantic flights
and $13 for intra-Europe flights.
Korean Air, meanwhile, wants a $12 increase for all
passengers going to Korea from the Philippines, $30
for its US, Canada, Middle East, Oceana and Europe flights,
and $12 for trips to China and to the other countries
in Asia.CAB said it expects a decision on the petition
by September.
Earlier, flag carrier Philippine Airlines (PAL) and
US airline Northwest separately asked the CAB to implement
an increase in fuel surcharge this year to cushion them
from higher fuel prices.PAL is seeking a $15 hike on
fares to the US, Canada and Australia while Northwest
wants a $10 passenger fee hike for the Philippines-US
route.
If approved, the increase would bring the fuel surcharge
on PAL's long-haul trips to $37 per passenger from the
present $22, and for Northwest, from $35 to $45.PAL
will keep its fuel surcharge at $16 on Middle East flights
and $14 on all other foreign trips. It said the $15
additional surcharge would bring the fuel factor to
$65 per barrel, still below actual cost, but would give
it some breathing space.Meanwhile, CAB has allowed Cathay
Pacific, Japan Airlines, Air Micronesia and Continental
Air Micronesia to hike their fuel surcharge, ranging
from $2 to $10, from July to October.
ABOITIZ TRANSPORT SYSTEM (ATS) posted
a 5% increase in revenues for the second quarter of
the year to P2.6 billion. The company also registered
a 4% hike in net income after tax of P330 million compared
to the figure posted a year earlier.Lilian Cariaso,
ATS chief finance officer, said the increase is largely
attributable to the 51% and 11% increase in passage
and freight volume, respectively, and the 10% and 4%
rise in rate per passenger and rate per twenty-foot
equivalent unit (TEUs), respectively.
Cariaso added that the company also registered improved
performance over the previous quarter. For the first
half, ATS recorded P4.4 billion in revenues and P162.8
million in net income after tax. Total costs and expenses,
on the other hand, increased 9% over the same period
last year due to the 7% rise in operating expenses.
Cariaso said this was caused mainly by the increase
in fuel prices. "The company is currently working
on several initiatives to continuously bring down this
cost component."
Consolidated assets for the period in review amounted
to P9.5 billion, while total liabilities reached P5.1
billion.Total bank debt totaled P2.6 billion. Stockholders'
equity stood at P4.3 billion.Cash generated from operations,
according to Cariaso, amounted to P559.7 billion and
cash and cash equivalents as of the end of the first
half was at P242.4 million.
THE Maritime Industry Authority (Marina)
is batting for the creation of a National Transport
Safety Board (NTSB) that will handle all accidents in
the air, on land and at sea. Arnie Santiago, Marina
Enforcement Office officer-in-charge, said the staff
of the proposed NTSB should be air, land and sea transport
experts. Engineering and maintenance backgrounds, Santiago
said, are also necessary in this field.
He explained that the proposed NTSB should have powers
to sanction government and private company officials.
"If Marina, the Air Transportation Office, the
Land Transportation Franchising and Regulatory Board
and other private firm officials are liable then the
board should be given powers to punish them," Santiago
added.
Santiago also proposed that the NTSB be given complete
autonomy, and that it be given a team of accident investigators
who will look into the technical aspect of a mishap.Santiago
said the creation of the NTSB would lessen chances of
"white-washing" aside from expediting the
handling of accident investigations and lessening incidents
of corruption.
THE Maritime Industry Authority (Marina)
sees no increase in local freight rates despite escalating
fuel prices and the ongoing political turmoil in the
country.Marina National Capital Region chief Roberto
Arceo, in an interview, said increasing prices now,
particularly freight rates, is the least of the consideration
of shipping companies."We expect local freight
rates to remain at current levels and expect no rate
increases in the next months," Arceo said.
He said shipping firms are competing with each other
on the best onboard services to lure more shippers.Competition
provided by the airline industry is also one of the
reasons Marina expects no increase in shipping rates.Arceo
said if there would be any movement in rates in the
coming weeks, it would be downward.
Some sectors are worried that with the full deregulation
of the shipping industry vessel operators will jack
up rates each time there is an increase in fuel prices.To
date, only Sulpicio Lines, Inc. has adopted a 6.9% upward
adjustment in rates, which took effect last July 6.Marina
expects that other shipping lines, particularly the
big ones such as Aboitiz Transport System and Negros
Navigation, will maintain their rates to lure more shippers.
"Shipping operators now are in a wait-and-see position,
awaiting the move of their competitors before making
any business decision. They cannot increase their rates
by more than 10% due to competition being created by
the local airline industry," Arceo stressed.Aside
from this, one of the reasons pulling shipping rates
even lower is economies of scale. Arceo explained shipping
operators are now consolidating cargoes from smaller
ports and surrounding inland economies to justify bigger
carrying vessels for better-cost efficiency.
Import
tariff may be increased by one percentage point
THE Department of Finance (DOF) will
increase import tariff across the board by one percentage
point starting this month to cushion losses from delays
in enforcement of the new value-added tax (VAT) law.The
tariff hike is expected to earn the government some
P14.6 billion annually.
Officials said the Philippines may increase tariffs
as long as it is within the range committed under the
World Trade Organization.The finance department said
the plan to raise tariff was similar to the levy on
imported products ordered by the DOF during the Aquino
Administration.
Tariff ceiling for the Philippines is at 25.6%, and
applied tariff lower by about 5%.The DOF added that
the across-the-board increase will continue even if
the new VAT law is allowed to be implemented soon.
Finance
asked to fast track ruling on anti-smuggling scheme
LOCAL industries want the Department
of Finance (DOF) to fast track issuance of its opinion
on whether the Bureau of Customs (BOC) can tap private
bank funding for an anti-smuggling scheme. The Federation
of Philippine Industries (FPI) said the BOC is in dire
need of funds to fully implement the Tariff and Customs
Code of the Philippines.
The bank loans will be used to challenge valuation of
imports, purchase goods and then auction them off through
the compulsory acquisition scheme.FPI and the BOC have
asked the DOF to rule on whether Customs may approach
private banks for loans to implement the scheme. The
scheme is expected to prevent losses of about P140 billion
annually.
THE Federation of Philippine Industries
(FPI) has proposed to President Gloria Macapagal-Arroyo
the passage of a directive asking all government agencies
and offices to procure and use locally-manufactured
products to lessen our dependence on imports, deter
smuggling, and save on dollars.
FPI president Jesus Arranza said the group also proposed
to the Department of Trade and Industry the conduct
of a study to identify and promote products produced
locally that could substitute imports.
Calling for import substitution on government procurement
will not be in violation of the World Trade Organization
(WTO) as the Philippines is not a signatory to the organization
when it comes to government procurement, Arranza said."This
is a timely call as it is equally beneficial to both
government and local industry in supporting the Administration's
ten-point economic agenda to help resolve the country's
rising budget deficit through increased tax collections.
Encouragement of import substitution will significantly
conserve the country's foreign exchange reserves,"
he explained.
Arranza added that Philippine manufacturers are capable
of producing high-quality and world-class construction
and non-construction products which are readily sufficient
to met government needs. Arranza said under FPI's proposal,
procurement and use of imported goods by government
agencies may be allowed only if the product is not locally
available, is produced insufficiently, is not price
competitive, or if the locally manufactured product
is not within the standards required by the domestic
user.
Arranza said the import substitution measure, which
could be implemented through a presidential executive
order, is being supported by the Federation of Filipino-Chinese
Chamber of Commerce and Industry Inc.
SEMICONDUCTOR exports grew 6.8% to
$1.55 billion in May, up from the $1.45 billion registered
for the same period last year.Figures from the Semiconductor
Industry Association (SIA) showed that Philippine exports
outpaced global sales which expanded 4%.
The trade department said the rise in semiconductor
imports as well as the rise on garments and textile
imports mitigated a fall in merchandise exports.Exports
of garments and textiles posted a year-on-year growth
of 7.62% during the same period.SIA projects global
sales to grow 6% in 2005 and 9.8% annually through 2008.
It said the growth will be driven mainly by the demand
for personal computers and wireless handsets.
THE Philippine Ports Authority (PPA)
does not expect to woo back vessel operators that dropped
calls at Batangas port unless there is enough activity
at the port.PPA assistant general manager for special
and corporate affairs Raul Santos attributed the pullout
to low cargo volume. "Until there is enough activity
at the port, we don't see these direct callers docking
at Batangas again," Santos said.
He added that once the port has enough cargo volume
to satisfy business operations of vessels, the operators
will return.There are two vessels calling Batangas port
once every two weeks, usually carrying completely-built
up vehicles. Earlier, international shipping lines such
as American President Lines dropped Batangas and instead
chose to call at either Manila or Subic where they also
enjoy several incentives.
Cavite-Laguna-Batangas-Rizal-Quezon (Calabarzon) locators
Nestle and Yazaki Torres, this year also pulled out
of Batangas due to lack of port facilities.The PPA is
wooing back the Calabarzon companies to secure enough
cargo traffic at Batangas and, in turn, win back international
vessels.
"Batangas, really, is designed to cater to the
needs of the Calabarzon," Santos said.
THE Philippine Confederation of Grain
Association (PhilConGrain) is urging government to amend
Republic Act 8794 or the Road User's Tax, particularly
its sixth section.Section 6 provides for the imposition
of a maximum load limit for all types of motor vehicles,
including cargo trucks.The motor vehicle user charge
became effective January 2001 but implementation of
Section 6 was deferred due to the clamor of grain traders.
The road user's tax was one of the conditions agreed
upon in negotiations for the construction, improvement
and operation of the North Luzon Expressway. With the
law's impending implementation, grain traders now want
an amendment to the law, specifically the load limit
provision.
Joji C. Co, Jr., president of PhiConGrain, said the
lack of infrastructure such as farm-to-market roads
contributed to the drop in agricultural production especially
rice production."With impending implementation
of the road user's tax, rice industry stakeholders will
definitely increase the price of their products because
of increased cost," Co explained.He added that
the reduced load will mean decreased volume, eventually
resulting in higher freight cost.
Businessmen,
truckers, police renew drive against hijacking
The Chinese Chamber of Commerce and
Industry (CCCI) and the Confederation of Truckers Association
of the Philippines (CTAP) want to reimpose its earlier
agreement with the PhilippineNational Police (PNP) to
curb hijacking in the country.This time, however, the
businessmen and truckers want the contract to have more
teeth.
CCCI, CTAP and the PNP entered into a Memorandum of
Agreement (MOA) two years ago to work hand in hand to
improve the government's anti-hijacking campaign.Hijacking
is one of the major problems of businessmen and truckers
in the country, particularly when shipping products
to the countryside and back.
This year alone, about five incidents of hijacking have
been reported and the number is expected to further
rise in the next few months. Hijacking has been cited
as one of the reasons for the continuing rise in prices
of commodities.Among the conditions of the new agreement
is the use of pass cards both for the driver and cargoes
which will be presented to different choke points in
the country.CTAP president Rodolfo De Ocampo said the
use of the cards will establish the identity of the
driver and cargo. "It will avert the possibility
of hijacking. It is one measure to address hijacking
in the country," he stressed, adding that the police
could declare the cargo as deemed hijacked without the
pass cards.
Additional check points will also be established in
strategic points in the country which will be identified
by the CCCI, truckers and the police.The three groups
already met in Camp Crame last week to iron out kinks
of the amended agreement and expect to implement the
process anytime soon.
Major domestic lines in the Philippines
will soon be required to have their security and sea
marshal onboard assessed by the Maritime Industry Authority.The
security assessment report would contain the required
training for both security officers from private agencies
and sea marshals currently provided by the government.Arnie
Santiago, a marine investigation division chief, explained
that such an assessment is necessary since the agency
supervising the sea marshals only deploys the security
team.
The assessment report is also needed because of the
absence of International Ship and Port Facility Security
(ISPS) Code requirement coverage for the domestic trade.Domestic
lines are not required to comply with the ISPS Code
- security regulations applied only to international
shipping - but in the last year some domestic operators
have voluntarily adopted measures along similar lines.
Apart from training, Santiago said the report would
include the synopsis record of each passenger/cargo
ship detailing its capability such as provision of metal
detector, bomb sniffing dogs and other security details.Meanwhile,
passengers of major domestic ships in the Philippines
have expressed satisfaction over the posting of sea
marshals on board to provide security while the ships
are under way.A random survey conducted by the Philippine
Coast Guard (PCG) also found overwhelming support for
the continued deployment of composite teams of the Armed
Forces, Philippine National Police and PCG that started
in March 2004 immediately after the SuperFerry 14 bombing.
The poll was conducted in early May on passengers on
ferries of Aboitiz Transport System, Sulpicio Lines,
Negros Navigation, MBRS Shipping and Moreta Shipping
Lines. Respondents were asked whether ferries could
be attacked by terrorists and said they were aware of
the sea marshals and knew their role. Of 203 respondents,
201 said they feel secure with joint sea marshals escorting
or deployed on board passenger vessels.
