Forwarders
seek BIR memo circular on tax transactions
THE Philippine International Seafreight
Forwarders Association (PISFA) is batting for a revenue
memorandum circular (RMC) that will address freight
forwarding business transactions presently not covered
by current guidelines of the Bureau of Internal Revenue
(BIR). PISFA president Rico Brizuela told PortCalls
the RMC will fine tune provisions such as the value-added
tax collections involving freight forwarders. "The
RMC will define everything - particularly questionable
transactions which current guidelines cannot answer,"
he explained. The BIR is studying PISFA's proposed memorandum
circular and has so far agreed to certain provisions
such as those involving advances. The BIR has yet to
agree though on the proposal involving income on freight
charges. "This is one of the most contentious provisions
of our proposal. We are proposing 5% of the freight
charges as the assured income of (freight forwarding
service) providers, but BIR wants it based on actual
margins," Brizuela said. "Aside from this
issue on the income on freight charges, we see no other
debatable provisions in our proposal. Once the issue
on freight charges has been settled, we expect a favorable
decision from the BIR and we expect to get it by the
end of the first half of the year," Brizuela said.
PISFA wants the immediate release of the RMC from the
BIR to help cushion the impact of the new value-added
tax law on its members' businesses. As it is, the law
is expected to shave off 5% to 10% from PISFA members'
revenues. Earlier, the PISFA president said association
members eye a 15% to 20% volume growth this year, a
projection that would have been higher if not for the
RVAT and the country's political problems.
DTI urges compliance
with US food packaging requirements
THE Department of Trade and Industry
(DTI) is urging exporters of food products particularly
to the US to comply with new labeling requirements enforced
at the start of the year by the US Food and Drug Administration
(USFDA). The USFDA ruling requires proper disclosure
of trans-fatty acids and allergen contents in labels
of food products to be sold in the US market as a way
of promoting healthy eating habits. The regulation also
requires allergens to be identified in labels of food
imported into the US market effective January 1 as provided
in the Food Allergen Labeling Consumer Protection Act
of 2004. Food products already packaged and labeled
but do not conform to the new ruling can still be sold
in the US provided these use stickers to correct the
current stock of labels and meet the new requirements,
USFDA authorities told the Philippine Trade and Investment
Center in Washington. The stickers should contain a
statement stating the names of the food sources of all
major food allergens used as ingredients to make the
packaged food and the ingredients' list that identifies
the food source of such ingredient. Still, the DTI urges
food exporters to fully comply with the new requirement
in order to prevent any problems in the future. "We
do not want our food exporters to be caught off guard,
having no idea why their shipments are being embargoed.
Increasing health, ecology, security, and human rights
requirements are making our markets more complicated
and demanding. It is better for our exporters to be
forewarned," said Trade undersecretary Thomas Aquino.
The country's food exports reached $1.065 billion in
the first 11 months of 2005, a 5.89% increase from only
$1.005 billion in the same period last year. From January
to October 2005, food exports to the US alone amounted
to $296.97 million.
MEMBERS of the Confederation of Truckers
Association of the Philippines (CTAP) will increase
their rates due to higher spending brought about by
the full implementation of the value-added tax law.
"The increase is definite, what we are discussing
right now is the percentage of the increase and when
it will be implemented," CTAP president Rodolfo
De Ocampo told PortCalls. De Ocampo said CTAP members
can no longer shoulder the additional cost what with
spending on the rise since two years ago, aggravated
by the country's low cargo volume. "Our business
spending is now too high. We are now feeling the pinch
of the VAT. There has been a tremendous increase in
our fuel, spare parts and other spending since the VAT
was enforced," De Ocampo lamented. Earlier, CTAP
predicted a 15% to 20% increase in rates due to the
VAT but decided to delay carrying out any hike until
the additional 2% VAT came into force. This year, CTAP
expects a better business environment - a 20% increase
in cargo volume due to the anticipated increase in local
and international cargo traffic, buoyed by the peso
appreciation. - Christopher Paringit
THE Subic Bay Metropolitan Authority
(SBMA) sees no more obstacles in the $1-billion investment
by Korean shipbuilder Hanjin Heavy Industries in the
area, according to SBMA chairman Feliciano Salonga.
"All systems go for Hanjin. No more obstacles.
We gave what they wanted," Salonga told PortCalls
in an interview. Hanjin was reported to have asked for
certain conditions to be met before proceeding with
the project, such as an access road to a beach area
as a supporting part of the master development plan
of the SBMA Redondo area. Apart from the access road,
Hanjin also wanted an eight-year income tax holiday
for each phase of the project. The project entails a
five-year construction period. Last December, Hanjin
was set to break ground on its investment but this was
derailed by some problems involving the access road.
But with the access road already in place, Salonga sees
the groundbreaking ceremonies happening within the next
two months. The Korean firm also wanted SBMA to deliver
the government-owned property free of impediments -
informal settlers - before formally locating there.
Hanjin Heavy Industries will use the shipyard at the
Subic Bay Freeport to build 8,000-TEU container vessels.
For its first five years, the firm is expected to build
only hatch covers, then modules before finally building
the entire vessels. SBMA expects some 20,000 jobs will
be generated by the Hanjin project in the next ten years.
THE Ateneo-FEDFAP (Federation of Forwarders
Association of the Philippnes) Institute of Logistics
and Transportation Management recently held its first
graduation ceremony for its International Trade Facilitation
Management program. The program, one of three certification
courses being offered by the institute, produced 12
graduates: Allan G. Benedicto, Abraham Mardi C. Dikit,
Valiant T. Tamang and Arnold R. Brizuela from Airlift
Asia; Arnold F. Cabawatan and John Patrick L. Llamas
from MOL Logistics Phils. Inc; Jose Maria P. Cardenas,
OOCL Phils. Inc.; Mark Angelo C. Colona, Eagle Express
Lines, Inc.; Katrina A. Geniza of Freight Connection
Philippines Inc.; Denirene M. Mendoza, Transmodal International;
Digzylou Mae M. Mendoza, Pacific Concord Container Liners;
and Lester S. Miclat, Sky Freight Forwarders. The two
other certification programs offered by the institute
are Integrated Logistics Management and International
Freight Management. In his speech during the graduation
rites, founding program director Angelito E. Colona,
who also chairs the Asean Federation of Forwarders Association,
challenged the graduates to use their skills from the
program as a catalyst to improve, enhance and equip
themselves to their company's advantage and to participate
in addressing the critical issues facing the logistics
and transport industry today.
TRUCKERS may now use the Alabang viaduct
following an order from the Department of Interior and
Local Government (DILG) directing Muntinlupa to lift
its ordinance barring trucks from using the facility
without first securing a permit. The order also rendered
useless the compromise agreement entered into earlier
between Muntinlupa and several truckers' associations
which required truckers to first secure renewable monthly
permits from the city before passing through the bridge.
In a letter addressed to Muntinlupa City mayor Jaime
Fresnedi, Local Government Secretary Angelo Reyes said
the city should immediately lift its ordinance until
the implementing rules and regulations (IRR) for Republic
Act 8794 or the law prescribing the allowable load limit
for trucks has been released. Reyes added that no directives
should be passed prior to the IRR. The DILG is fine
tuning several sections of the IRR and is expected to
come out with the final copy in two months. Truckers
led by the Confederation of Truckers Association of
the Philippines, Alliance of Concerned Truck Owners
and Organization and the Integrated North Harbor Truckers
Association, in a joint meeting, concurred with the
agreement between DILG and the Muntinlupa City Council.
Muntinlupa is now creating a counter resolution that
will formally lift the ordinance. Even then, truckers
may now use the viaduct freely even if the ordinance
has not been formally lifted. Last year, Muntinlupa
barred trucks carrying containers and other kinds of
cargo from passing through the Alabang viaduct without
first paying P2,500 to the local government.
THE government is set to privatize
the Legazpi City Airport to pave the way for its conversion
to an international airport. "The upgrading will
cost P5 billion. What we will do is privatize the
present Legazpi Airport so we'll have the new Legazpi
International Airport," a statement from the
Palace said. President Gloria Macapagal-Arroyo has
discussed the privatization plan with Transportation
and Communications Secretary Leandro Mendoza, and
has ordered the facilitation of approval of the financing
scheme for the project under the official development
assistance package.
Container Bridge deploys
vessels on RP-Taiwan trade
INTERNATIONAL vessel owner Container
Bridge Pte Ltd recently introduced two feeder vessels
on the Philippine-Taiwan trade. Marclipper and Pearl
Island were acquired by Container Bridge when it took
over Manson Shipping last year as part of its expansion
program. Marclipper services the Manila (south and
north)-Kaohsiung-Keelung route and Pearl Island, the
Manila-Cebu-Kaohsiung link. Both leave the Manila
International Container Terminal every Sunday. The
vessels usually carry empty containers to Taiwan and
general merchandise on its return trip to the Philippines.
Singapore-based Container Bridge is represented in
the Philippines by Goldlink Steamship, Inc.
