WHILE the prospect of a US recession looms
large, some sectors are taking a more sanguine view of the
situation.
International sea freight forwarders are in particular seeing
a possible upside, with a potential shift in shipping pattern
– from air to sea.
In an interview, Philippine International Seafreight Forwarders
Association of the Philippines (PISFA) president Dexter Yu
told PortCalls: “The recession may be good news for
sea freight forwarders as airfreight shippers shift to sea
freight… as a cost-reduction measure.”
If such happens, cargo volumes will increase, helping negate
effects of the slowdown, he said.
Yu is optimistic that the US slowdown will not be long-drawn
out. As it is, a $150-billion economic-stimulus package has
already been approved by the US Congress and is awaiting US
President George W. Bush’s signature expected this week.
PISFA is meantime negotiating with shipping lines for a possible
freight rate cut to help its members better cope with the
slowdown.
Earlier, economists said the looming US recession is expected
to boost the Philippines’ property market and the outsourcing
industry as US firms look offshore to outsource back-office
jobs.
Airfreight forwarding operations
unaffected by US FAA downgrade
AIR cargo forwarders have completely discounted
the effects of the US Federal Aviation Authority (US FAA)
downgrade of the country’s aviation sector.
Operations, including those that involve flag carrier Philippine
Airlines (PAL), have been uninterrupted a month after the
downgrade, airfreight forwarders said.
“We’re okay. As far as our US operations are concerned,
they remained the same and were smooth flowing as if nothing
happened,” Aircargo Forwarders of the Philippines, Inc.
(AFPI) president Jaime Roxas told PortCalls.
“As for PAL, I think their current capacity will still
be able to accommodate our volume while the country works
on our Category I compliance… there is no need to look
for other carriers at the moment,” Roxas explained.
“The downgrade also did not affect operations outside
the US,” he added.
Last month, the US FAA downgraded the country’s aviation
sector from Category I to Category II due to safety concerns.
Category I means a country’s civil aviation authority
(CAA) has been found to license and oversee air carriers in
accordance with International Civil Aviation Organization
(ICAO) aviation safety standards.
On the other hand, Category II means a country’s CAA
does not provide safety oversight of its air carriers in accordance
with the minimum safety oversight standards of ICAO.
PAL continues to fly to the US even with the downgrade, but
this has put on hold its US expansion plans. Still, its plans
for route and fleet expansion are ongoing since the carrier
expects a return to Category I in three to six months.
PAL was scheduled to increase flights to the US and its territories
but the downgrade has barred it from such or from changing
the type or increasing the number of aircraft used on the
routes.
Customs’ National Single-Window project
gets a lift from the EU
THE European Union (EU) has approved a technical
assistance package that will help connect the Bureau of Customs
(BOC) with 10 government agencies as part of the National
Single-Window Transaction (NSWT) project.
Customs deputy commissioner Alexander Arevalo said the package
could be worth euros 1 million to 2 million, although the
total project requirement is in the neighborhood of euros
6 million.
Arevalo said the funding balance will be sourced from 40 donor
agencies.
The ten agencies that will be connected to the BOC are the
Philippine Coconut Authority, Bureau of Fisheries and Aquatic
Resources, Quarantine, Bureau of Plant Industries, National
Meat Inspection Service, Fertilizer and Pesticide Authority,
National Dairy Authority — all under the Department
of Agriculture — Bureau of Internal Revenue, Bureau
of Import Service and the Philippine Shippers Bureau.
The technical assistance is on top of the first euros 1.3-million
grant of the EU in 2004 for the BOC’s shift to AsycudaWorld
from Asycuda.
Ten computer terminals are now testing electronic submission
of customs data and electronic release of permits between
the BOC and the 10 agencies.
The NSWT is a prelude to the imposition of the Asean Single-Window
Transaction system set to be enforced by the Philippines this
year.
The single-window plan will link all government agencies to
customs offices. Importers will no longer secure documentation
for their imports and exports from one government agency to
another.
“Under the plan, all transactions will be done through
computers or mobile phones while person-to-person business
dealings in the BOC will be reduced,” Arevalo said.
THE Bureau of Customs (BOC) will soon render
a decision on whether or not it will immediately implement
Republic Act 9280 or the Customs Brokers Act of 2004.
“The issue on the full implementation of RA 9280 is
now with the BOC legal department on my direct orders. I am
expecting to issue my decision within the week based on the
recommendation of the legal department,” Customs commissioner
Napoleon Morales said in an interview at the sidelines of
the agency’s 106th anniversary.
“In the next couple of days, we will see if there is
really a need to implement fully RA 9280 at the BOC even if
there are several amendments being pushed at both Houses of
Congress to allow corporate practice,” he added.
The BOC opinion is seen to address the burning issues of whether
it will allow the lodgment of entries and the employment of
brokers by corporations.
Since 2004, the Chamber of Customs Brokers, Inc. (CCBI), the
Professional Regulatory Board for Custom Brokers, the Professional
Custom Brokers Association of the Philippines along with a
few other groups have pushed for the implementation of RA
9280.
“Until the amendments are approved (by Congress), the
existing law should be implemented,” CCBI said in a
position paper earlier submitted to the BOC.
The House of Representatives has already approved on third
reading amendments to Section 29. The Lower House proposal
does not prohibit a corporation from engaging in the business
of customs brokerage or from hiring the services of an in-house
customs broker for purposes of accreditation by the BOC.
The Senate Civil Service Committee has yet to restart hearings
on the amendments, stalled by the detention of former chairman
Senator Antonio Trillanes on charges of rebellion. The committee
is now chaired by Senator Loren Legarda.
RA 9280 enacted on March 30, 2004 regulates the practice of
the customs broker profession. It prohibits corporate practice
of customs brokerage. Section 29 of the law provides that
the customs broker practice is a professional service and
as such, “no firm, company, or association may be registered
or licensed as such for the practice of customs broker profession”.
Section 28 also provides that no person shall practice or
offer to practice the profession, or use the title unless
one is a registered licensed customs broker.
Customs Administrative Order No 3-2006-A, however, gave express
authority to customs brokerage corporations and freight forwarding
firms to lodge customs entries and/or use their employee-customs
representatives to transact business at the BOC.
North Harbor privatization may yet be fast
tracked
THE privatization of North Harbor could restart
in the next few weeks. But this is only if partners Harbour
Centre Port Terminals, Inc (HCPTI) and Metro Pacific Investment
Corp agree to the Philippine Ports Authority (PPA) proposal
to drop their court case against the state agency.
In a chance meeting between PPA general manager Atty. Oscar
Sevilla and HCPTI senior vice president Edwin Jeremillo at
last week’s 106th anniversary of the Bureau of Customs,
Sevilla asked Jeremillo to drop the court case to restart
with the privatization process.
The PPA chief said the contract to operate and manage North
Harbor could have been awarded as early as October last year
had it not been for the court case.
He added the issue should not have been brought to court in
the first place considering HCPTI executed a waiver liberating
the privatization process from any legal suit that may arise
during the procedure.
He urged the immediate restarting of the privatization process
to modernize the port, whose structural integrity is now in
question.
HCPTI said it is open to an out-of-court settlement but that
it needs to study the proposal first.
“We still maintain our petition filed before the court
that the PPA should honor its earlier decisions. Nonetheless,
we are not closing our doors to a possible agreement. It all
depends on the proposal of the PPA to convince us to drop
the case,” Jeremillo said.
Harbour Centre, the lone eligible bidder for the 25-year management
and operation contract of the North Harbor, filed a case in
August last year after the PPA Board decided that there should
be at least two eligible bidders for the port. Thereafter
the PPA Board declared a failure of bidding.
In December the PPA asked the Manila Regional Trial Court
to hasten its decision on the suit, stressing that further
delays could endanger the lives of people working in the structurally
weak facility.
MALACAÑANG has endorsed for Senate
concurrence the country’s accession to the Revised Kyoto
Convention (RKC), paving the way for compliance to the treaty
as early as April.
The treaty was handed to Senate president Manuel Villar at
the Bureau of Customs’ 106th anniversary last week.
It will be forwarded to the Foreign Relations committee chaired
by Sen. Miriam Defensor-Santiago for hearing and approval.
Customs commissioner Napoleon Morales said immediate accession
to the RKC would boost the country’s attractiveness
to foreign investors and arrest the reputation of the BOC
as one of the most corrupt government agencies.
“The end result of our accession to the RKC is more
investors, larger cargo volume that will result in larger
revenues for the BOC, and us addressing smuggling and resolving
corruption as (the treaty) paves the way for less and less
human transaction at the bureau,” he explained.
Morales said the shipping community, including the Philippine
Chamber of Commerce and Industry, Federation of Philippine
Industries, Philippine Exporters Confederation, Port Users
Confederation, Philippine International Seafreight Forwarders
Association (PISFA) and Aircargo Forwarders of the Philippines,
have long been lobbying for the country’s immediate
accession to the treaty.
PISFA executive director Atty. Romeo Sto. Tomas told PortCalls
the endorsement is welcome news to the industry.
He said the country’s compliance to the treaty will
foster efficiency, transparency and accountability in Customs
administration even as it contributes to reduced transaction
costs and enhanced trade security.
Three Hamburg Sud vessels recently made their
maiden voyages to International Container Terminal Services,
Inc, flagship Manila International Container Terminal. The
1,819-TEU MV Cap Portland was the first to arrive followed
by MV Cap Palmerston and MV Cap Andreas. The vessels are part
of Hamburg’s ANZL service. Hamburg’s Philippine
agent is FilSov Shipping, Inc. Photo shows the awarding of
commemorative certificates to MV Cap Andreas (l-r): Eulalo
Borja, ICTSI operations superintendent; Elmer Merquita, ICTSI
assistant operations manager; Arthur Valdez, ICTSI operations
superintendent; Cris Escalona, FilSov vessel planner; Ernani
Gonzales, FilSov operations assistant; Capt. Marek Sudol,
Cap Andreas vessel master; and Artemio Lim, ICTSI operations
officer-in-charge.
Decision on wharfage fee cut indefinitely
deferred
FOLLOWING orders from Transportation Secretary
Leandro Mendoza, the Philippine Ports Authority (PPA) has
indefinitely deferred its decision extending the implementation
of the wharfage fee cut.
PPA general manager Atty Oscar Sevilla told PortCalls the
decision will depend on the outcome of a joint PPA and transport
department study on the discount’s effects on exporters
and on PPA operations.
“All requests for (wharfage fee) reduction should now
be addressed to the Transport Department… they are now
to decide if the wharfage fee should be cut further,”
Sevilla added.
Since January, the PPA has reverted to the original wharfage
fee of P259.70 and P391.05 per 20 footer and 40 footer, respectively,
after the reduced fee of P20 and P40 lapsed last December
31.
The deferment is not welcome news to the country’s exporters
already suffering from the strong and fast appreciation of
the Philippine currency.
The Federation of Philippine Industries (FPI) and Philippine
Exporters Confederation (Philexport) said the wharfage cut
would help cushion the effects of the strong peso on exports.
Both expect the peso to appreciate even more this year.
The peso was Asia’s best-performing currency for 2007,
appreciating almost 20% since the start of 2007.
Earlier, PPA said it will extend the implementation of the
reduced fee on a quarter to quarter to basis.
Based on PPA records, exporters saved P27 million in the first
six months of the implementation of the reduced fee. The PPA,
however, has lost about P100 million in revenues since April
last year.
