SHIPPERS are assured of lower logistics
costs at the start of the New Year after the Philippine Ports
Authority (PPA) extended the implementation of the 90% cut
in wharfage fee.
The duration of the temporary cut has yet to be determined.
PPA general manager Atty. Oscar Sevilla in an interview said
PPA is extending the reduced wharfage fee following orders
from the President for the PPA to help mitigate effects of
the strong peso on exporters.
“We will be extending the reduced fee but we are not
going to issue a directive extending it for the entire 2008.
The first installment will be for the first six months of
2008 and then from there we will evaluate if another extension
is warranted until the end of 2008,” Sevilla said.
The PPA move is expected to earn praise from the shipping
community, including the Federation of Philippine Industries
(FPI) and the Philippine Exporters Confederation (Philexport),
clamoring for the extension of the reprieve as early as October.
FPI and Philexport expect the peso to appreciate even more
in 2008. They said the extra reprieve would give shippers
time to recover from a currency that has appreciated about
19% since the start of 2007.
The peso was Asia’s best-performing currency for 2007.
Based on PPA records, exporters saved P27 million in the first
six months of the implementation of the reduced wharfage fee.
Since April, wharfage dues have been cut from P259 to P20
per 20-footer and from P391.05 to P40 per 40-footer.
Since April, PPA has lost approximately P100 million in revenues.
No more extension for forwarders’
new capital requirements — PSB
IT’S final. Existing freight forwarding companies have
only until January 2009 to comply with the new paid-up capital
requirements for the forwarding industry, Philippine Shippers’
Bureau executive director Atty. Pedro Vicente Mendoza told
PortCalls.
Amendments to PSB Administrative Order 6 Series of 2005 or
the Revised Rules on Freight Forwarding will be released any
time now.
“Basically, all existing freight forwarders will have
only until January 2, 2009 to comply with the new requirement
and no more extension,” Mendoza said.
The decision effectively shot down the request of smaller
forwarders to extend the compliance date to January 2010.
Based on the proposed amendment to the AO, specifically Rule
XII, Sec. 52, by January 2, 2008, all new entrants in the
freight forwarding business — whether non-vessel operating
common carrier (NVOCC), international freight forwarder (IFF)
or domestic freight forwarder (DFF) — should have complied
with the new capitalization requirement for their respective
category.
The new capital requirement for NVOCC is P4 million from the
previous P500,000, while for international freight forwarder
it is P2 million. The capital requirement for DFFs has been
jacked up to P1 million from P250,000.
Existing NVOCCs have until January 2, 2009 to comply with
the new capital requirement. Half of the new requirements
should have been complied with by January 3 2008 and the rest
by January 2, 2009.
Existing DFFs, meanwhile, are also given until January 2,
2009 to comply with the new requirement.
In January 2006, PSB increased the capital requirement for
existing and new players in the freight forwarding business
to streamline the industry and to eliminate fly-by-night entities.
The previous five categories were also collapsed into three:
NVOCC, IFF and DFF. Scrapped were the cargo consolidator and
breakbulk agency categories.
Early this year, the PSB deferred implementation of the new
requirement to January 2008 from January 2007 to give the
task force created by the Department of Trade and Industry
more time to study the accreditation process.
The move also makes the schedule of implementation consistent
with the order’s transitory provisions which provide
that compliance with the capital requirement be made within
two years from date of effectivity.
THE Philippine Ports Authority (PPA) is looking
at an off-the-court settlement with landowners affected by
the Batangas port development project in order to move on
with the project.
PPA general manager Atty. Oscar Sevilla told PortCalls the
agency has decided on such a measure because it does not expect
fast resolution of its motion for reconsideration at the Supreme
Court (SC).
“We are now talking with lot owners in Batangas Port.
We are offering them about P1,000 per square meter just to
facilitate the resolution of the issue (so that we can) go
full blast with the privatization of the port,” Sevilla
said.
He added the PPA offer is a win-win solution for lot owners
who risk waiting for a long time for an SC decision that does
not offer any guarantees.
Sevilla reiterated that the P5,500 per square meter value
affirmed by the SC for the lots is applicable only now because
the area has been commercially developed but that when the
PPA acquired the property, it was largely agricultural.
On August 24, Associate Justice Angelina Sandoval-Gutierrez,
affirmed earlier rulings of the Court of Appeals and Batangas
Regional Trial Court, which set the expropriation price of
the subject lots at P5,500 per square meter.
The SC also ordered the trial court to implement its final
and executory orders requiring the PPA to pay the respondents
P5,500 per square meter or about P11.3 billion with 12% annual
interest from the date of expropriation on September 11, 2001
until fully paid.
Batangas Port is one of 10 ports being groomed by the PPA
to be at par with world standards by 2010.
TANKER operators warn of countless company closures once
the government imposes the 10-centavo levy for every liter
they ship under the Republic Act 9483 or Oil Pollution Compensation
Act.
Oscar Orbeta, president of Association of Tanker Operators
in the Philippines Inc. (AtoPhil), said RA 9483 did not take
into account the fact that the country’s oil trade involves
countless depot transfers.
The law, he said, will sap earnings of both large and small
operators.
“If the law is implemented only the bigger ones (tanker
operators) will survive, but that’s if they don’t
have maturing loans. We small and medium operators may only
survive for one to two months,” Orbeta said.
“We’re just hoping for the best,” said Orbeta,
who owns Topever Corp, a firm that leases vessels.
Orbeta said the industry is hoping the fee would only cover
persistent oil, which may be negligible for some operators.
Apart from AtoPhil, the law’s oppositors include the
Philippine Petroleum Sea Transport Association and the Petroleum
Institute of the Philippines.
The tanker groups have pointed out many flaws in RA 9483,
which they said was just enacted by Congress as a knee-jerk
reaction to the MT Solar I oil spill last year.
Among all the flaws, the groups are most interested in addressing
the 10-centavo per liter fee, the main source of the fund.
The amount, according to them, comprises 20% to 60% of the
gross revenue of oil haulers, and would use up most funds
allocated for vessel safety.
The implementing rules and regulations of the law are expected
to come out during the first quarter of 2008 after the Department
of Transportation and Communications has asked Malacañang
to defer the law’s implementation for 90 days starting
late November.
“We cannot just strike that (10-centavo levy) out because
that is explicitly stated in the law. That will have to say
until the law is amended,” Transport undersecretary
Maria Elena Bautista earlier said.
Supported by oil companies, tanker operators are seeking to
defer implementation of the law until an amendment is produced.
They are also open to seeking legal redress.
Private port operators vs PPA-proposed rate
changes
THE Association of Private Port Operators and Owners of the
Philippines, Inc. (APPOOP) is opposing the Philippine Ports
Authority (PPA) proposal to amend its sector’s fee structure,
saying this will limit their market instead of making their
operations more responsive to the times.
It will also reduce operations of some of its members, subjecting
them to the same tariff and International Container Terminal
Services, Inc. (ICTSI).
“The proposal of the PPA to increase the privilege fee
by more than 500% is too exorbitant,” APPOOP president
Amado Gurango explained in an interview.government share as
government-controlled private ports Asian Terminals, Inc.
(ATI) and
“While we are amenable to an increase, the proposed
percentage… is unjustified. Maybe we could agree to
an increase if it is only about 10%,” Gurango, who is
affiliated with Philippine Flour Mills Corp, said.
He added the proposed amendments are aimed mainly at controlling
operations of one of its members, Harbour Centre Port Terminals,
Inc. (HCPTI), by subjecting it to the same guidelines followed
by ATI and ICTSI.
Durango said the proposal, now on its third draft, seems to
favor HCPTI adjacent ports as it bars private ports from handling
rice and sugar shipments of the government if within a 27-nautical
mile radius from a government port.
HCPTI, being a private port, offers a tariff rate 50% lower
compared to that levied by government ports. However, its
operations are limited to bulk shipments and containerized
cargo for its locators. The PPA has yet to decide on HCPTI’s
application for full commercial containerized operations.
Based on the proposed amendment to PPA Administrative Order
No. 6-95 or the Liberalized Regulations on Private Ports Construction,
Development and Operation, the PPA is increasing by 200% plus
imposing a 12% VAT on the construction bond before a permit
is issued for private non-commercial ports.
For private commercial ports, PPA is proposing to implement
a 700% increase in fees to P60,000 from P10,000 for projects
below P10 million and a 700% increase plus 1/10% of 1% and
VAT.
The privilege fee is also being increased by 200% for all
kinds of private ports. The fee will be on top of an additional
10% from the annual gross revenue from domestic cargo-handling
operations and 20% of the income from foreign cargo-handling
operations if the private commercial port falls within the
27-nautical mile radius of a nearby government port.
“From these, the proposed amendment is unjustified as
it will really burden the private ports at a limited market
instead of allowing them to operate to provide alternative
to shippers which to choose in terms of facilities and rates,”
Durango said.
“APPOOP supports amendments to AO 6 that will further
liberalize and not make application for permits and registration
more difficult for port owners and operations,” he explained.
For now, all private ports remit a P10,000 to P20,000 privilege
fee to PPA annually compared to ATI and ICTSI’s share
forming 40% of the PPA’s total annual revenues.
APPOOP is scheduling a meeting with the PPA in the next few
weeks to arrive at a win-win solution.
APPOOP member ports handle more than 50% of cargoes passing
through the country’s private port system. Its members
include San Miguel Corp., Universal Robina Corp., Bacnotan
Union Industrial Park, HCPTI, Negros Navigation, ATI, Dole
Philippines, Del Monte Phils., Island Integrated Offshore
Terminal, Inc., General Milling Corp., RFM, Central Azucarera
de Bais, Legaspi Oil Co., Limay Bulk Handling Terminals, Inc.,
Liberty Flour Mills, Inc., Lu Du & Lu YM Corp., New Zamboanga
Universal Ent., Philippine Flour Mills, Pilmico Foods Corp.,
and Romus Trading Co.
THE three accredited value-added services providers (VASPs)
of the Bureau of Customs (BOC) are pushing for the immediate
use of the Single Administrative Document (SAD) to facilitate
trade and further reduce human intervention in customs entries.
At a recent PortCalls executive briefing, InterCommerce Network
Services, Cargo Data Exchange Center and E-Konek Pilipinas
said they continue to push the BOC to fully migrate from the
use of the Import Entry and Internal Revenue Declaration Form
(IEIRD) to SAD as the latter is more conducive to their operations
and translates to reduced cost.
In separate presentations to brokers, traders and freight
forwarders, the three VASPs stressed the benefits of a single
document in customs entries, saying it eliminates additional
clerical work in retyping, as well as possible clerical errors
in typing the form.
The SAD is also system generated from the system of the VASP.
They said the use of the IEIRD form defeats the purpose of
automation as no changes in the bureaucracy are introduced
if such a form is used.
With the IEIRD form, entries are retyped resulting in double
handling of the document.
The SAD, the VASPs said, facilitate payment of duties and
taxes as the document is lodged electronically prior to payment.
The procedure also simplifies workflow by eliminating the
additional step in a second payment of duties and taxes after
assessment, or in case the advance payment prior to lodgment
and the assessment is greater than the assessed value.
If the examiner imposes additional duties and taxes after
examination, the importer will just need to remit the balance
before goods are released.
The BOC said it is still using the IEIRD form as it still
has to fully understand the ramifications of the use of the
SAD.
“We are still starting and we can’t put everything
all at the same time… (we are trying) to minimize the
birth pains in using the VASP,” Customs deputy commissioner
Alexander Arevalo said.
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