EXISTING freight forwarding companies have
until next year to comply with higher paid-up capital requirements
prescribed by the Philippine Shippers’ Bureau (PSB).
Under PSB Memorandum Circular No. 1 Series of 2007 dated January
2, 2007, existing freight forwarding companies were given
until January 2, 2008 to comply with the new requirements.
PSB director Atty. Pedro Vicente Mendoza said the order is
consistent with transitory provisions of PSB Administrative
Order No. 6 or the Revised Rules on Freight Forwarding which
took effect January 2, 2006. The 2006 order provided that
Òcompliance with the capitalization requirements mentioned
in Section 4 (A)2 shall be made within two years from the
effectivity of this order.Ó
Under the just-signed memorandum circular, PSB said, ÒCompliance
of companies that are renewing their accreditation or those
that were granted Provisional Certificates are hereby given
until January 2, 2008 to comply with the minimum paid-up capitalization
requirement.Ó
New applications must, however, comply with the new requirements
upon filing, it added.
AO 6, which collapsed the five categories of freight forwarders
to three, requires a minimum paid-up capital for non-vessel
operating common carriers of P4 million; international freight
forwarder, P2 million; and domestic freight forwarder, P250,000.
Mendoza said the order is partly in response to the request
of the Alliance of Concerned Freight Forwarders (ACFFO) for
the PSB and the Department of Trade and Industry to further
study the new policy.
In the last hearing on the issue ACFFO, represented by counsel
Rene Saguisag, questioned the implementation period of the
order as well as the new classification and capitalization
requirements of freight forwarders.
While the group acknowledged the need for higher paid-up capital
among freight forwarders, they said the new requirements should
be lower to ensure compliance by locally-owned forwarding
firms.
ACFFO reiterated the amount of capital a company should start
with is a big business decision and one in which government
has no say.
It added that the higher requirements will result in the formation
of a cartel in the industry to the prejudice of shippers as
well as the closure of many small and medium-sized forwarding
firms.
The PSB said the increase is justified considering the present
requirements were put in place in 1997 when the peso was trading
at P20-P30 to a US dollar.
To date, a total of 610 companies are involved in the cargo
export-import business. PSB expects more companies to register
this year.
RP cargo traffic for first ten months
up marginally
AFTER a continuing slide, cargo throughput
finally picked up due to the strong performance of foreign
cargoes.
Latest data from the Philippine Ports Authority (PPA) showed
that total cargo throughput for the first 10 months of the
year increased 0.37% to 127.778 million metric tons (mmt)
from 127.303 mmt in the same period in 2005.
PPA said the increase was brought about by the 9.71% increase
in foreign cargoes primarily at the ports of Limay, Legazpi,
Puerto Prinsesa, Ormoc, Cagayan de Oro, Iligan and Surigao.
Domestic cargo, on the other hand, declined 8.47% from 65.372
mmt to 59.833 mmt as more local shippers preferred shipping
goods through the Road Ro-Ro Terminal System or RRTS. Among
the affected areas are South Harbor, Limay, Batangas, Tacloban,
Tagbilaran, Iligan and Ozamiz.
Container traffic also increased 0.68% compared to the same
period last year. This was due to the active movement of foreign
goods at the South Harbor, Limay and Davao.
In contrast, domestic containers dropped 2.70%, also due to
the RRTS particularly at the South Harbor, Limay, Ormoc, Pulupandan,
and Cagayan de Oro.
Passenger traffic again failed to recover for the period in
the review, further declining 13.91%. The PPA said this was
due to the preference of travelers to use other modes of transportation
or make use of the RRTS. Only Batangas registered positive
numbers.
Shipcalls also declined 3.87% vis-a-vis the 261,694 shipcalls
registered in 2005 due to the slump in both foreign and domestic
vessels.
For October alone, cargo throughput decreased 2.28% from 12.98
mmt in 2005 to 12.68 mmt last year due to the low performance
of domestic goods. Foreign goods, however, recorded a positive
variance of 6.70% due to the favorable performance of both
import and export shipments.
Container traffic for October grew 1.02% from 307,579 TEUs
to 310,721 TEUs due to the 1.63% rise in foreign box traffic.
Domestic TEUs also rose 0.30% from 140,632 TEUs in 2005.
Passenger traffic for October again failed to recover further
dropping 13.42%.
Shipcalls also decreased 8.02% compared to the 26,216 recorded
in October of 2005.
THE Philippines is keen on acceding to the Revised Kyoto
Convention on cross-border trade by June in time for the World Customs
Organization's general council meeting.
Customs deputy commissioner Rey Nicolas said the government is now looking at
the country's laws and comparing them to the minimum standards required by
the treaty.
We are looking at June next year to accede to the convention. The timetable is
ideal since we are having a new Congress by June 30, Nicolas said.
The government has committed to multilateral agencies, including the World
Customs Organization, of its accession this year to the Revised Kyoto
Convention or the amended International Convention on the Simplification
and Harmonization of Customs Procedures.
The convention, an international agreement designed to boost cross-border trade,
requires uniform and simpler procedures and maximum use of information
technology to do away with paperwork.
A total of 49 countries have already acceded to the 1999 agreement.
In another development, the Bureau of Customs (BOC) has tapped the assistance
of Efficient Reforms and Governance Enhancement (EMERGE), a United States-funded
local group, to help assess bonuses due BOC employees following a surge in the
bureau's revenue collection.
BOC said EMERGE will help formulate guidelines on the implementation of the
Lateral Attrition Law in relation to the agency's 2006 performance.
The law states that 15% of excess target collection will go to the bureau's
officials and employees.
If the law is implemented, the BOC estimates each of its employees would receive at
least P100,000.
From January to November, the BOC has exceeded its collection target by about
2%; it raked in P181.345 billion from the target of P178.18 billion.
Shipbuilding
facility for local operators in the works
THE Subic Bay Metropolitan Authority (SBMA)
is set to establish a shipbuilding facility designed to accommodate
the fleet requirements of domestic shipping operators inside
the freeport zone.
The facility will become a major component of the government’s
Domestic Shipping Development Plan.
ÒThe shipbuilding facility would also be a part of
the envisioned Subic Bay Maritime Industrial Park,Ó
SBMA chair Feliciano Salonga told PortCalls.
Newly-installed National Maritime Leasing Corp. (NMLC) president
Agustin Bengzon threw his support to the SBMA project as he
cited the pressing need to build about 18 new tankers by next
year for the use of local shipping operators through the lease-to-own
scheme being offered by the NMLC.
NMLC, a subsidiary of the National Development Corp (NDC),
was created to help implement President Gloria Macapagal-Arroyo’s
Strong Republic Nautical Highway project through the acquisition
of roll on-roll off (ro-ro) vessels for lease to qualified
operators under a lease purchase agreement.
ÒThere is a shortage of commercial vessels in our country
and the shipbuilding yard being planned in the Subic Freeport
could help address this need,Ó NMLC’s Bengzon
said.
During the project presentation, Salonga cited a recent Japan
International Cooperation Agency (JICA) study which showed
that the domestic shipping industry today utilizes second-hand
and aging vessels, mostly from Japan.
A total of 1,502 vessels are on record, broken down into 28
container ships, 854 general cargo, 266 passenger-cargo, 149
Ro-Ro vessels and 205 tankers with ages ranging from 20 to
30 years old.
The study conc-luded all 1,502 vessels should be replaced
and an additional 635 ships needed in the domestic trade starting
next year until 2015.
Salonga said the SBMA will participate in the domestic shipping
development plan by developing a 50-hectare or more property,
if necessary, for the shipbuilding facility that would offer
affordable rental.
South Korea’s Hanjin Heavy Industries and Construction
is presently constructing a $1-billion shipbuilding facility
at the Subic Freeport. When completed, it will be one of the
world’s largest shipyards with projected annual sales
of $3.6 billion.
Among the incentives being offered by the SBMA are tax- and
duty-free importation, 5% corporate tax on gross income, unrestricted
entry of foreign investments, no foreign exchange control,
and four- to six-year income tax holiday for qualified investors.
Earlier, SBMA said it expects a rosy economic picture this
year not only for Subic but also for the nearby Clark Special
Economic Zone.
Two huge investments, the $215-million Subic Port Modernization
Project and the $425-million Subic-Clark-Tarlac Expressway,
are both expected to be operational this year — the
first phase of the port project in June and the whole 94-km
expressway by the third quarter.
According to SBMA administrator and chief executive officer
Armand Arreza, the first of the three berths for the Subic
port project has been laid out while the expressway is now
57% complete.
ÒThese should provide Subic and Clark with a better
competitive edge and help realize the potent alliance between
these two economic growth centers,Ó Arreza said.
ÒThe expressway would facilitate access to and between
Subic and Clark, as well as the Luisita Industrial Park in
Tarlac, while the port will open up opportunities for local
manufacturers to trade with foreign markets,Ó he added.
Shipbuilding
gets additional government support with new EO
PRESIDENT Gloria Macapagal-Arroyo recently
signed Executive Order No. 588 designed to strengthen the
local shipbuilding and ship repair industries.
Issued late last year, the EO provides a five-year ÒFilipino
Investing in the PhilippinesÓ program that promotes
the conduct of free skills training programs for shipbuilders.
ÒThere is a need to attract and maintain much-needed
investments for the development of the shipbuilding and ship
repair sector in view of its capacity to contribute to the
country’s economic output, its strategic significance
given the archipelagic nature of the Philippine geography,
and its potential to open up vast opportunities for employment
and skills training for Filipinos,Ó the EO said.
Under the same order, an ad hoc committee will be set up to
develop a competitive Philippine shipbuilding industry. The
committee will be chaired by the Maritime Industry Authority
and will have representatives from other pertinent government
agencies.
The EO also directs government agencies engaged in promoting
business and investments to provide institutional assistance
and support to businesses engaged in shipbuilding in their
availment of all applicable fiscal and non-fiscal incentives,
particularly their registration as a preferred pioneer industry
under the Board of Investments.
The EO is expected to strengthen incentives and programs provided
under Republic Act 9295 or the Domestic Shipping Act of 2004,
which also focuses on strengthening the shipbuilding and ship
repair industries of the country.
THE new owners of debt-saddled Negros Navigation
Co., (Nenaco) are in for a rough ride after its creditors
went to court one after the other to force the shipping firm
to pay obligations outside of its rehabilitation program.
For the past six months, at least three Nenaco creditors have
filed petitions before Manila courts, the latest of which
is FJD Security and Allied Service. The first two were GE
SeaCo and the Maritime Industry Authority (Marina).
In its petition, FJD Security and Allied Services asked the
court to compel Nenaco to pay a significant portion of its
total collectibles. ÒOf its total collectible, FJD
is willing to receive partial payment of a minimum of P1 million
from Nenaco out of its total debt of P1,750,647.20,Ó
according to FJD’s filing at the Manila Regional Trial
Court.
It said the company is willing to sign an agreement with Nenaco
over the balance of the amount owed it.
FJD also asked the court to issue an order directing the shipping
firm or its court-appointed rehabilitation receiver to release
at least P1 million to pay its debts to the security firm.
Last May, Maritime Industry Authority filed a petition seeking
to collect P21.15 million in supervision fees from Nenaco
from 1998 to 2001.
In September, GE SeaCo, the world’s largest container
lessor, also asked the court to compel Nenaco to pay its current
debt of $18,835.60 for July 2006 alone. The amount represents
rental of GE SeaCo’s container vans.
In 2004, Nenaco underwent corporate rehabilitation, which
effectively stopped payments to all of its debts without a
court order. The company has total outstanding obligations
estimated at P2.4 billion, including P1 billion in bank loans.
Another P1 billion is owed to trade suppliers and lessors
of equipment and property, and P400 million in unpaid taxes
to the Bureau of Internal Revenue.
The former shipping unit of Metro Pacific Corp., Nenaco was
sold last month to a holding company created by its current
management. The move was meant to clean the books of Metro
Pacific.
A new cargo-handling operator for Batangas
Port could be known as early as March this year or three months
earlier than anticipated, according to the Philippine Ports
Authority (PPA).
It said the bidding date could be set late next month or early
March to avoid being covered by the election ban set to take
effect March 30 until May 14.
A PPA official said the agency is now rushing the bidding,
including the terms of reference of the P5.5-billion facility.
At the moment, Asian Terminals, Inc., (ATI) the cargo handling
operator at the Manila South Harbor, holds the temporary permit
to operate Batangas Port. PPA was forced to extend ATI’s
permit to operate for at least a year as a result of the inability
of the state firm to roll out the necessary equipment to lure
more shipping firms to dock at the terminal. ATI’s temporary
permit at the Batangas Port should have ended last September.
Claro Maranan, PPA assistant general manager for engineering,
confirmed PPA is rushing to install some of the equipment
needed at Batangas Port in time for the tentative bidding
by March to increase the port’s attractiveness to possible
investors.
Batangas Port hopes to corner 10% of the 400-million annual
containerized cargo traffic in Asia by next year. “We
will put Batangas Port at the forefront by 2008. We hope to
get only about 10% or about four million TEUs of the total
Asian containerized cargo traffic. With that share, I think
Batangas Port will be able to compete with the likes of Taiwan
or Singapore,” PPA general manager Atty. Oscar Sevilla
said earlier.
GUIDELINES for the double-hull tanker policy
are on hold after Malacanang introduced a management shake-up
at the Department of Transportation and Communication late
last year.
The rules, which will guide tanker operators on compliance
with the policy by 2008, has been collecting dust at the Maritime
Industry Authority (Marina) for several months now without
being once tabled for a meeting.
The policy should have been implemented in October but prior
to its approval, transport undersecretary Agustin Bengzon,
in charge of maritime affairs, was replaced by Maria Elena
Bautista.
Bengzon transferred to the Maritime Leasing Corp., a subsidiary
of state venture capitalist National Development Company.
He replaced Teodoro Villanueva.
Bautista is now studying the new policy but has yet to give
her approval. She said the circular would be for implementation
in 2008 and needs some fine-tuning.
The policy has earlier been approved in principle after Marina
administrator Vicente Suazo Jr. held a series of meetings
with the country’s association of tanker owners, who
did not oppose the move. The owners, however, had little choice
since oil firms such as Petron Corp. and Pilipinas Shell are
already requiring them to use double hull, double bottom vessels.
The International Maritime Organization requires the phase
out of single-hull ships between 2005 and 2010 depending on
when the vessels were built.
Ocean-going single hull tankers were banned from entering
ports in European Union countries in October 2003, after the
sinking of the supertanker Prestige. Prestige broke in half
in November 2002 off the coast of Galicia, Spain spilling
half of the 77,000 tons of oil being transported by the tanker.
It damaged the beaches of Iberian Peninsula and killed other
marine life.
That incident followed the sinking of the Erika, another tanker,
off the coast of France in December 1999.
All single-hulled tankers are expected to vanish from European
waters by 2015.
The United States has also enacted a similar regulation when
the Exxon Valdez sank off Bligh Reef in Alaska’s Prince
William Sound spilling 10.8 million gallons of crude in March
1989
