THE House of Representatives want the
implementation of Customs Administrative Order (CAO)
3-2006 deferred until the Congress finishes deliberations
on impending amendments to Republic Act 9280 or the
Customs Brokers Act of 2004. Deputy Majority Floor Leader
Jesus Crispin Remulla, in a letter to Finance Secretary
Margarito Teves through Customs commissioner Napoleon
Morales, has requested the Department of Finance to
study the possibility of holding in abeyance the implementation
of CAO 3-2006. Remulla said there are pending amendments
to RA 9280 being deliberated on by both Houses of Congress
which they hope to be certified urgent by the Office
of the President. "With the foregoing, we respectfully
request the Department of Finance and the BOC to study
the possibility of holding in abeyance the implementation
of CAO 3-2006 until after the passage of our proposed
amendment to the law," Remulla said in the letter.
CAO 3-2006 operationalizes RA 9280 at the Bureau of
Customs. It is set to be enforced on July 21, a day
after the 60-day suspension period lapses. The CAO was
originally set to be enforced on May 22 but a week prior
to its implementation, the BOC issued a 60-day deferment
order so the BOC may look into contentious provisions
of the CAO. Among the issues currently being addressed
are the issuance of customs passes for freight forwarders,
and the employment of customs brokers and customs representatives
or personeros by companies. The BOC and the forwarders
have yet to strike an agreement on the customs passes
after talks bogged down last week. The parties could
not agree on whether to limit the pass to the filing
and amendment of manifests and loading of shipments
to airport warehouses or to authorize the bearer to
process import and export shipments deemed exclusive
to BOC-accredited brokers. The BOC supports the first
proviso while forwarders want the latter. The parties
expect to settle their differences in a meeting scheduled
this week. The BOC is also in the process of crafting
a customs memorandum order governing the employment
of accredited brokers and personeros by companies. A
final draft is expected also this week.
2GO, the logistics arm of the Aboitiz
Group, will introduce two freight ships in the next
two years to further increase current market share of
48%, Egay Nicolas, 2GO-Freight's assistant vice president
for Cebu Sea, told PortCalls. 2GO is also replacing
its huge combo vessels, also known as the Ropax, with
freighters in a bid for greater efficiency and cost
effectiveness. "Having a pure cargo vessel is cheaper
to operate compared to a Ropax which oftentimes has
50% unutilized cargo space. This is one of the major
business changes 2GO Freight is introducing, which is,
utilizing the right equipment," Nicolas explained.
This month, 2GO is awaiting delivery of the first vessel
expected to be operational next month. The 400-TEU freighter
will be deployed in the Manila-Davao-General Santos
route. The second vessel is scheduled to arrive next
year. 2GO has allocated some $6 million for the acquisition
of the vessels. The freighters are second-hand ships
from India.
For 2006, 2GO has a bullish outlook on interisland trade,
particularly container shipments after handling approximately
14,000 TEUs last year. It expects volume to grow 30%,
the bulk of which will still come mostly from its Manila-Mindanao-Manila
market. Meanwhile, 2GO has successfully hosted a four-day
health challenge event in Cebu last week in a bid to
promote the place as the wellness hub of the country.
2GO said the company advocates the promotion of an active
lifestyle for the Filipinos. "We aim to encourage
the public to integrate physical well-being into their
lifestyle through the promotion of energy, endurance,
strength and performance," the company said.
The event is the second after it was formally launched
last year.
MARITIME Equity Corp., the state-owned
firm focused on extending credit for the shipping industry,
expects to secure more funding through official development
assistance (ODA) as it tries to build up the number
of ships registered under its name within the decade.
Teodoro Villanueva, MEC president and chief executive
officer, said the company is targeting about $1 billion
in ODA within five years to achieve its mandate to revive
the country's stagnant shipping industry. The money,
he said, would mainly come from the Japan Bank for International
Cooperation (JBIC), the country's top source of funds
for infrastructure projects. He said MEC, a subsidiary
of the National Development Company, is already preparing
its proposal for submission to various funding agencies.
The proposal's approval would take time since it would
pass through several agencies such as the National Economic
and Development Authority, the Department of Foreign
Affairs, and the Office of the President. "In five
years, we're supposed to lend out $1 billion to the
local shipping industry. To achieve that, we would have
to disburse P5 billion per year," he said. The
figure comprises more than 4,000 newly-acquired vessels
of all sizes with gross weight tonnage of more than
4 million. MEC said it can easily top the most number
of ships on record in the country within two years.
Last month, Villanueva said MEC granted a P400 million
financing scheme to a medium-sized firm for the acquisition
of three roll on-roll off vessels, its first grant since
the company was established early last year. This year,
he said, MEC is expected to disburse P1 billion worth
of projects. In a study on the country's domestic shipping
development plan, the Japanese International Cooperation
Agency (JICA) said the Philippines, unlike Japan and
Indonesia, has not employed an alternative ship finance
scheme to perk up the industry. The scheme requires
no collateral and provides financial and technical assistance
services from ship construction, procurement to operation.
JICA said such a scheme is good for small to medium-sized
shipping firms.
CTAP
ok with 30% cut in truck load for rainy season
THE Confederation of Truckers Association
in the Philippines (CTAP) said it is amenable to the
proposal for a 30% reduction in the maximum rated
load of trucks during the rainy season. Rodolfo De
Ocampo, CTAP president, said the suggestion made by
the Road Board is beneficial to truckers as it means
less fuel consumption and wear and tear on vehicles.
"As long as shippers pay us the right fee, there
will be no problem on our side," he said. Albert
Suansing, Road Board consultant, earlier suggested
to truckers that they reduce their loads by as much
as 30% during the monsoon season to prevent deterioration
of roads and bridges. The reduction of 810 kilos from
the average 27 tons carried by cargo trucks can do
much to reduce the P4 billion spent annually for the
maintenance of roads and bridges.
ICTSI
issues P4.5B notes through Standard Chartered Bank
INTERNATIONAL Container Terminal Services,
Inc. (ICTSI) has just concluded the issuance of floating
rate notes with an aggregate face value of P4.5 billion.
Martin O'Neil, ICTSI Chief Financial Advisor, said:
"ICTSI is a successful, rapidly growing international
company with strong roots in the Philippines. The
issue of the notes will finance ICTSI's capital expenditure
program at the Manila International Container Terminal,
and refinance existing debt obligations." The
notes, arranged by Standard Chartered Bank, were met
with strong demand from institutional investors in
the Philippines, and the issue size was increased
from its original target of P3 billion. They have
maturities of five and seven years and a floating
coupon rate. Eugene Ellis, Standard Chartered Bank
Philippines Chief Executive Officer, stated: "We
are honored to work with ICTSI on the largest debt
capital markets transaction for the year. Standard
Chartered Bank is proud to be part of ICTSI's expansion
both in the Philippines and globally." Participating
institutions include Equitable PCI Bank, Metrobank,
Banco de Oro, Landbank, Development Bank of the Philippines,
Philippine National Bank, Robinsons Savings Bank and
the Insular Life Assurance Co. Ltd.
A ceremonial toast concluded the signing ceremonies
in Makati City with (left to right):
Edmundo Soriano, Banco de Oro Senior Vice President;
Joey Chan Jr., MetroBank Senior Vice President; Roberto
Fernandez, SCB Phils Head of Fixed Income; Martin
O'Neil, ICTSI Chief Financial Advisor; Edgardo Abesamis,
ICTSI Executive Vice President; Eugene Ellis, SCB
Phils CEO; Antonio Cotoco, Equitable PCI Bank Senior
Vice President; and Edward Wenceslao, Equitable PCI
Bank Senior Vice President.
HAMBURG Sud and Fesco Ocean Management
Ltd. (FOML) have finalized the sale and purchase agreement
which both companies entered into last March. Hamburg
Sud acquired three liner services in the Asia-Australia,
Asia-New Zealand, and Australia/New Zealand-US West
Coast (2 strings) trades. The services will be managed
under FANZL Fesco Australia New Zealand Liner Services,
a brand name of Hamburg Sud. All three services will
continue to be operated with the existing vessels,
which will be chartered in by Hamburg Sud. FOML and
FESCO's existing intra-Asia services between the Russian
Far East and ports in China, Japan, Korea and Vietnam,
its service between the United States and the Russian
Far East and its services in the Russian cabotage
trades as well as its non-container maritime and transportation
business in Russia are not part of the sale and will
continue to be owned and operated by FOML, FESCO and
related companies.
Double-digit
growth for 2006 in the cards for "K" Line
Air
AIRFREIGHT forwarder "K"
Line Air Service Phils Inc. (KLAS) celebrates its
16th year with expectations of double-digit growth
in 2006, higher than what was posted in the previous
year. This, despite the country's political and economic
uncer-tainties. The upbeat prospects are on the back
of projected growth in both the company's imports
and exports businesses. The export business is expected
to jump 20% from the previous year, and the imports
business by 25%. "2006 should be a very interesting
and challenging year. We hope for an end to the continuous
political problems that the country is facing so that
our economy can start to truly recover," the
company said. Last year, the company chalked up P47M
in gross revenues. "2005 produced good results
for the company, with our net profit reaching a high
level. These financial results enabled us to exceed
our key targets involving the conversion of our branch
offices to regional offices. But more importantly,
these have placed KLAS in a strategic position to
better shape its future," the company said. "We
expect continued growth in revenues this year. We
will focus on maximizing our network both locally
and globally. This will be complimented by the creation
of KLAS NSD (National Sales Department) Program and
the active participation of our overseas KLAS stations,"
it added. This year, KLAS will also continue to improve
its service offerings, and diversify its list of customers/commodity
mix penetration. To further cement its success, the
company will rely on offering competitive airfreight
consolidation services, strengthening ties with global
core customers through its network of offices, and
focusing on FOB sales. KLAS is also embarking on an
expansion program in its four branch offices in Cebu,
Clark, Cavite and Laguna. The expansion, which started
last year, is designed to further boost business and
hold on, if not add, to market share. In addition,
the company is in the process of opening new branch
offices in Subic, Tarlac or Batangas. "Our investments
in our branches should materialize soon. We have also
started our full implementation of the One-Logistics
Enterprise Solution (OLES) covering marketing, operations
and finance processes which, by the end of the year,
will be extended to our branch offices," the
company said. Quality is likewise top of mind at KLAS.
In June 2006, the company will have its yearly audit
with SGS for continuous certification as a Quality
Assured Firm under ISO 9001:2000. As it enters its
17th year, KLAS promises to closely follow a three-year
plan designed to drive both market share and profit
growth. The plan calls for, among others, the employment
of cost-cutting measures to improve liquidity and
financial viability. "Our task for the year ahead
is to develop a strategy both beneficial to the company
and our customers. Such a strategy will make logistics
solutions even more affordable and accessible to both
exporters and importers locally and globally,"
the company said. KLAS has not only survived but thrived
in an increasingly competitive business. From a P1
million company started in 1990, it now has assets
of P70 million. The company considers its well-trained
employees its biggest assets. Many have been with
the company for ten years or more. The low turnover
should be a source of constant assurance for KLAS
clients as it speaks of a highly personalized and
first-class service. In the past 16 years, KLAS is
also proud of its role as the Philippine government's
partner in national development. "KLAS has demonstrated
it is a serious partner in country's welfare objectives.
Apart from performing our economic role, we are actively
engaged in corporate social responsibility projects,
having donated to flood victims in Infanta, Real and
Nakar in Quezon, and to feeding programs for the Ahon
Bata Foundation," the company noted.
