THE Philippine International Seafreight
Forwarders Association (PISFA) sees a 15% to 20% volume
growth this year as a result of the expected increase
in volume from the electronics and semi-conductor sector.
"We are projecting a better year this year compared
to 2005. Our performance has already started to pick
up and actual figures for January are already significant
due to the increase in volume from the electronics,
semi-conductors and computer sectors," PISFA president
Rico Brizuela told PortCalls. Association members are
also optimistic over a rebound in the raw materials
and equipment sector, he added. In addition, the 'China
factor' is keeping PISFA's hopes up, with Brizuela noting
that a sizeable amount of the electronics shipments
will be coursed through that country this year aside
from major destinations such as the US, Japan, Canada
and other Asian countries. PISFA, whose members control
about 80% of the international freight forwarding market
in the country, expects imports to dominate in the first
six months and exports in the second half of the year.
However, despite having a bullish outlook for the year,
PISFA is still wary over the still unsettled political
unrest in the country. Last year, this contributed to
members' businesses registering flat to negative growth.
The association also noted the possible negative effects
of the additional 2% Reform VAT (RVAT) on their operations
due to narrowed revenue generation since the RVAT only
allows up to 70% input VAT. "I guess we just have
to live with it, the VAT and the political unrest. We
have to look for other alternatives to cushion the impact
of these conditions like being more efficient and productive
and right-sizing the company," Brizuela said.
ALBAY representative Jose Salceda wants
to look into the post-entry audit (PEA) system being
implemented by the Bureau of Customs (BOC) to check
reported irregularities in its implementation. He also
wants the BOC to provide Congress a report on the results
on the manner by which the compliance audits are being
conducted and on the general findings made on these
audits, including findings on the revenue collected
and penalties imposed from companies which were issued
Audit Notification Letters (ANLs). In House Resolution
No. 1112, Salceda argued there is a need to look into
the system since there were more than 100 companies
in the garments and textile, automotive, pharma-ceutical,
food, steel, consumer goods and other major importing
industries that have been issued ANLs by the Post Entry
Audit Group (PEAG) but there are still no official reports
submitted to date. "I am directing the Committee
on Ways and Means to conduct an inquiry, in aid of legislation,
on the status and performance of the customs audits
being conducted by the PEAG," Salceda, who is also
a member of the ways and means committee, said. The
PEA system, which has been in place since 2001, provides
for a control mechanism for the BOC to verify the correct
payment of taxes and duties after the goods have been
released from the BOC. Within a period of three years
from date of final payment of taxes and duties, the
BOC may visit the company and conduct an audit of the
records kept to ensure that it paid the correct amount
to the BOC. Failure to have done so will result in stiff
administrative fines or even criminal prosecution. To
further strengthen the PEA system, which is also known
as the Customs Compliance Audit, President Gloria Macapagal-Arroyo
signed Executive Order No. 160 in 2003 creating the
PEAG. The EO also provided for the appointment of an
Assistant Commissioner as head of PEAG, and the creation
of two operating units under PEAG - the Trade Information
and Risk Analysis Office and Compliance Assessment Office.
"However, since 2004, there are no official customs
report on the manner by which the compliance audits
are being conducted and on the general findings made
on these audits, including its findings on revenues
collected and penalties imposed," he stressed.
Salceda added many of the auditees are very large local
companies as well as multinational companies and at
present, there are many speculations on how the audits
are being conducted. Many importers also fear that the
audits are being used to harass legitimate businessmen.
"There is a need to review the powers and functions
of the PEAG to ensure its relevance and contribution
in the revenue protection and enhancement responsibilities
of the BOC and, to enhance trade facilitation for legitimate
traders and to promote customs compliance among unscrupulous
importers," Salceda explained.
DESPITE the low import volume, the
Bureau of Customs (BOC) surpassed its January collection
target of P12.083 billion by P297 million, according
to Custom Commissioner Napoleon Morales. The P12.38
billion collected by the BOC last month was also P1.8
billion higher than last year's January collection,
Morales noted in his report to Finance Secretary Margarito
Teves. Morales said the P12.38 billion is actual cash.
"This does not include deferred payments and taxes
paid by the government, or what is called TEF (tax expenditure
fund), which means the final collection figure could
still go up, when these are factored in," he said.
Morales attributed the bureau's success in posting a
collection surplus to team work. "We would not
have been able to achieve it if we were soft on smugglers.
This proved that the Bureau's six-point action plan
to curb both red tape and smuggling worked," he
said. "(The performance) also broke the January
jinx of the BOC," Morales added, referring to the
"traditional problems" in meeting the January
collection target, the first month of the year being
a lean month, as it comes after the Christmas season.
By port, Batangas registered the biggest surplus percentage-wise,
exceeding its P1.75-billion target, by 31%, or by P534
million. But in actual amount, the Port of Manila delivered
the biggest surplus, its P4.9 billion collection P855
million higher that its collection objective. Others
which met and surpassed their respective targets were
the Customs districts of Zamboanga, Surigao, Tacloban,
Legaspi and San Fernando. Morales expressed hope that
the BOC's maiden performance for the year would be the
template for the rest of the year. The BOC has been
given a full-year collection target of P192 billion,
seen as "mission impossible" by many quarters
as it represents a 35% jump over last year's actual
collection. Morales also set P12 billion as the bureau's
monthly target until September and P16 billion from
October to December. The balance will be accounted for
by other government agencies' duties and taxes.
TRADE Secretary Peter Favila announced
an accelerated schedule in the P11-billion rehabilitation
and expansion of the South Luzon expressway following
the signing of the Supplemental Toll Operations Agreement
(STOA) between the government and its contractor. The
absence of a signed STOA has prevented the contractor,
MTD Capital of Malaysia, from starting construction
work. With the STOA already signed, DTI expects work
to be mobilized in the next 30 days. Favila warned though
that he would cancel the contract if MTD Capital does
not move expeditiously. Signatories to the STOA are
the Philippine National Construction Corp. (PNCC) and
the South Luzon Tollways Corp. (SLTC), a joint venture
between MTD and PNCC, as the investor and the Manila
Toll Expressway Systems Inc. as the operator. The SLEX
project involves the facelifting of the Alabang viaduct
and extension of the expressway from Calamba, Laguna
to Sto. Tomas in Batangas. It is expected to be completed
in three to four years. PNCC chairman and chief executive
officer Arthur Aguilar said bulldozing of the Bunye
road would continue while redirecting traffic for southbound
would be done. He said ultrasound testing of the road
in the Alabang-Calamba stretch is being conducted. For
the Calamba to Sto. Tomas stretch, he said 90% of the
cases for right-of-way (ROW) had been filed and government
is just waiting for notice to proceed upon the acquisition
of the ROW. MTD acquired the right to develop SLEX via
when it bought 67% of the original proponent Hopewell
Crown Infrastructure Inc.
THE Philippine Chamber of Commerce
and Industry (PCCI) sees the 2% increase in value-added
tax (VAT) as good for the economy in the long term.
"The 2% increase is very small compared to the
impact to the economy brought about by not only the
revenues that will be generated from the increase but
the effect on the international community's perception
of government's political will in implementing substantial
and necessary economic reforms that will help improve
the country's fiscal condition and benefit the economy,"
PCCI president Donald Dee said. He added that PCCI supports
the government's priorities for the usage and allocation
of VAT proceeds. The government is set to allocate the
bulk of the VAT proceeds to improving social services
and infrastructure, and not for debt allocation. PCCI
expects that the VAT increase will send a strong signal
to foreign investors, international credit rating agencies
and trading partners that government is doing its best
and making the right decisions to improve the economy.
"We remain committed to supporting various initiatives
that will serve well the interest of the economy and
majority of the people. And as in the case of VAT, I
still believe that short-term sacrifices will bring
forth positive and long-term gains for our country,"
Dee said.
VAT CEBU PACIFIC will collect the additional
value-added tax for the government but will not raise
its fares. Its "Go" fares will remain throughout
the year since these are not promotional fares. "Go"
fares range from P488 to P1,288 one way, depending on
the local destina-tion. For Manila to Hong Kong, a one-way
ticket costs P1,999. Cebu Pacific will continue with
its promotional fares, like the recent Great Seat Sale,
whenever there is a need to further en-courage domestic
tra-vel especially during the lean months, the company
said. Under these promos, fares will even be lower than
the "Go" fares.
Australia bans direct
RP shipments anew on fears of snail infestation
THE Australian government back tracked
from its earlier decision to allow direct shipments
from any Philippine ports, aside from the Port of
Manila, to Australia on fear that shipments from the
country are infested with Giant Afican Snails (GAS).
The new order, issued at the start of the year, effectively
halted direct shipments from Cebu and other Philippine
ports to Australia adding to the cost of exporters
since they have to ship everything again through Manila.
However, the Philippine Exporters Confederation is
expecting that the Australian government will lift
its ban on Philippine exports anytime now and declare
the country as GAS-free.
INTERNATIONAL CONTAINER TERMINAL
SERVICES, INC. (ICTSI) is constructing a new terminal
gate at its flagship, Manila International Container
Terminal (MICT), which will feature state-of-the-art
computer imaging and tracking systems, electronic
boom barriers, and weigh bridges. The new terminal
gate, to be called the MICT Central Gate, will raise
customer service and operational efficiency a notch
higher with shorter truck dwell time and with 100%
of all inbound and outbound trucks being weighed.
"We are committed to continuously improve operations
and customer service at the MICT. We are incorporating
a totally new system, wherein we will know the actual
count of trucks inside the terminal at anytime; and
an exact recording of the container's weight and its
defects, if any," said Francis Andrews, ICTSI
senior vice president and MICT general manager. He
added: "The new gate system will benefit clients
and port users in that they are assured of even faster
and more efficient service, which all redound to lesser
costs on their part. We will overhaul the terminal's
import and export cycle to better serve ICTSI clients."
For ICTSI to further improve its service, all containers
coming in the terminal will be weighed. This will
enable MICT planners to accurately plan vessel stowage
to ensure the stability and safeness of a vessel before
leaving the terminal. Weighed containers will also
ensure better yard operations as containers are placed
at the right slots. The sequence of moving containers
thus becomes faster and efficient with accurate container
weights, which are beneficial for shipping lines.
The new gate is also seen to further strengthen the
terminal's security capabilities, especially compliance
with the United Nation's International Ship and Port
Facility Security (ISPS) Code and maritime trade security
regulations of the United States Department of Homeland
Security. The new gates will capture digital photographs
of containers and trucks as these enter the terminal.
The captured images will be stored in a database,
which will be the basis for terminal checkers to execute
container handling. Further, drivers' identities entering
the terminal will be validated and checked, and their
photographs will be taken. Aside from the new automated
gates, cameras and radiation portal monitors (RPMs)
will also be installed at the terminal's quayside
to scan offloaded import containers. The new gate
complex will also be pre-wired to for the installation
of unobtrusive inspection devices. Two more RPMs will
be installed at the entry gates of the Container Freight
Stations to scan loose export cargo. The existing
East Gate and West Gate will also be upgraded with
the installation of cameras and electric boom barriers.
Andrews revealed that the added port security brought
about by the installation of cameras and RPMs also
benefits MICT's surrounding environs: "Manila
is assured that as a transit point, the MICT's vulnerability
to terror attacks is lessened as we now have the capability
to detect radioactive materials and weapons of mass
destruction." The new gate system will have the
following components: ¥ Four truck lanes each
with an imaging system (seven cameras in all) and
support lighting;Sixteen driver kiosks. Each kiosk
will have a biometric fingerprint scanner, industrial
printer for the printing of equipment interchange
receipts and truck instruction documents, voice over
IP speaker and call button system, proximity card
reader, bar code reader, driver camera, and LCD screen;
¥ Four RPMs; ¥ Four 100-ton weigh bridges;
¥ Eight remote checkers' stations; ¥ Driver
identification registration station; and ¥ Interface
with existing terminal applications, gates system
developed by ICTSI IT unit Container Terminal Systems
Solutions, Inc., and existing security monitoring
software. The new MICT Central Gate will open in April
this year, and is expected to be fully operational
by June. ICTSI will schedule orientation for port
users, especially truckers, on the new gate system.
Truckers will have to register anew for access at
the MICT. Drivers will be issued with new IDs and
gate access proximity cards.
THE Philippine Ports Authority (PPA)
recently inaugurated port facilities at the Port of
Tacloban worth P97.9 million consisting of the reclamation
of land covering 2,698 square meters and the construction
of a concrete wharf (P86.7 million) as well as the
removal of transit sheds and improvement of storage
area (P11.2 million). In attendance during the inauguration,
were among others, PPA assistant to the general manager/port
district manager Raul T. Santos who represented PPA
general manager Oscar M. Sevilla; PPA Tacloban port
manager Winfred G. Elizalde; Rep. Remedios Loreto-Petilla
of the 1st Congressional District of Leyte; Board
member Evangeline Espiras; and Bertulfo Raquel representing
the City Mayor.
THE government is looking at declaring
at least three government-controlled ecozones as customs
bonded warehouses (CBW) in a bid to return incentives
stripped from them following a Supreme Court (SC)
decision. The Department of Trade and Industry said
declaring the ecozones as CBWs is one of the options
being considered to reciprocate investments by Clark,
John Hay, and Poro Point locators. The scheme would
allow locators to import raw materials duty-free,
one of the incentives locators enjoyed before the
SC ruling. Last year, the SC ruled Republic Act 7227
(The Bases Conversion and Development Act) expressly
provides for the grant of incentives only to companies
located within the Subic Bay Freeport and not in Clark
Ecozone, Poro Point in La Union and Camp John Hay
in Baguio City. The SC said there was nothing in the
law that can be considered as a grant of tax exemption
in favor of public respondent Bases Conversion Development
Authority (BCDA). It said the beneficiaries of the
tax exemptions and other incentives under RA 7227
were "clearly the business enterprises located
within the Subic SEZ." In its decision, the Court
said only the legislature had full power to exempt
any person or corporation or class of property from
taxation unless the Constitution itself provided for
such. Trade Secretary Peter Favila is now coordinating
with Finance Secretary Margarito Teves and Customs
commissioner Napoleon Morales on how the conversion
to CBW may be implemented. Favila has had initial
talks with Clark Development Corp. officials led by
its chairman Rizalino Navarro to assure locators that
government is addressing their concerns. In addition,
the government is looking at having the locators register
their projects with the Board of investments which
grants tax breaks of up to six years.
Tightened security
measures for industrial parks in place
INTERIOR and Local Government Secretary
Angelo Reyes has ordered the implementation of integrated
security measures aimed at protecting business locators
in the Batangas-Cavite-Laguna Industrial Parks. In
a meeting with private sector executives operating
at the Batangas international seaport last week, Reyes
stressed the measure is primarily intended to improve
the business climate in this prime business hub of
the country. Reyes, who is also concurrent head of
the National Anti-Crime Task Force, added it would
solidify the task force's efforts to address complaints
of local businessmen against syndicated crime groups
and their illegal activities in the Batangas port.
Reyes was referring to complaints of rampant extortion,
hijacking, pilferage and other criminal activities
in the province, which have reportedly left local
businessmen with some P100 million in losses. "The
syndicates are also responsible for the series of
threats and intimidation against containerized raw
materials destined for delivery to Metro Manila either
to be used by local manufacturing companies or for
export," Reyes explained. During the meeting,
he ordered the Philippine National Police to coordinate
the implementation of the security plan with all stakeholders,
particularly the local government units.
