PPA ok's two-step 12% hike in cargo-handling rates
THE Philippine Ports Authority (PPA) has
approved a 12% increase in container-handling rates at the
South Harbor and Manila International Container Port (MICP)
spread out over two years.
A 5% increase in tariff on foreign container handling services
has been in effect since January 18, 2008 provided under PPA
memorandum circular 01-2008.
The second tranche of 7% will be implemented at the start
of 2009, but this will only take effect following a review
by PPA management, said PPA general manager Atty Oscar Sevilla.
The foreign exchange rate to be used in computing the vessel
tariff will be P43 per US dollar to minimize the adverse impact
on vessel revenue of operators due to the rapid appreciation
of the Philippine peso.
Since last year, South Harbor operator Asian Terminals, Inc
(ATI) and MICP operator International Container Terminal Services,
Inc (ICTSI) have been negotiating for a rate adjustment together
with the Association of International Shipping Lines on account
of higher costs related to fuel, labor and other expenses.
ATI and ICTSI became qualified to increase their cargo-handling
rates after the completion of the two-tranche rate hike in
2005.
Since the increase in oil prices in the world market, the
PPA has received a number of petitions for rate adjustment
from other cargo-handling operators.
PRESIDENT Gloria Macapagal-Arroyo has signed
into law the Civil Aviation Authority of the Philippines Act
of 2008, paving the way for the upgrade of country’s
substandard aviation sector.
The law sets up a new regulatory authority, the Civil Aviation
Authority of the Philippines, to replace the Air Transportation
Office (ATO).
“Thanks to this new law ... air travel in this country
will be liberalized, and the obstacles to the entry of tourists
and investment will be removed,” Arroyo said after signing
a bill setting up the authority.
The US Federal Aviation Adminis-tration in December downgraded
the Philippines’ rating to Category 2 from Category
1, saying the ATO had failed to meet international safety
standards.
“With the passage of this law, we are confident that
the US FAA can…come up with a better rating for civil
aviation in the Philippines,” Executive Secretary Eduardo
Ermita said.
THE Bureau of Customs (BOC) fine tuning plans
to reduce the percentage of containers it scans from the current
80% to the global standard of 7-10%.
“The percentage of containers being scanned is really
high. We are working on reducing it gradually and hopefully
to reduce it to 7% or 10% before the end of the year,”
BOC deputy commissioner Alexander Arevalo told PortCalls.
“The plan to reduce the number is part of our larger
plan to facilitate trade through the implementation of a risk-management
system that spares low-risk cargoes and importers from the
scanning process,” Arevalo added.
“Hopefully, we could start reducing the percentage once
we issue accreditation to our value-added service providers
for phase II and phase III of the electronic-to-mobile (E2M)
program within the month,” Arevalo said.
The BOC is initially looking at reducing scanning of cargoes
brought in by importers registered under the Super Green Lane.
Earlier, the Philippine Economic Zone Authority asked the
BOC to reduce the containers for scanning, saying this would
speed up cargo movement.
Executive Order 592 has ordered the installation of non-intrusive
scanning devices in all major ports to ensure that all containerized
cargoes, particularly those US-bound, are free from materials
used for weapons of mass destruction as well as reduce the
incidence of smuggling.
All import and export cargoes landed, stored in piers, airports,
terminal facilities including container yards, freight stations
under the jurisdiction of the BOC, scanned or not, will be
scanned.
INTERNATIONAL Container Terminal Services, Inc.
(ICTSI) recently reported consolidated unaudited financial
results for the year ending December 31 2007, posting full
year revenue from port operations of P15 billion and net income
attributable to equity holders of P2,794 million.
Revenues for the full year grew 27% over P11.85 billion last
year, while net income attributable to equity holders improved
52% from P1.837 billion in 2006.
International operations continue to be a significant contributor
to earnings. Foreign operations account for 51% of 2007 consolidated
net income, as compared with 60% in 2006 as start-up losses
at new terminals acquired during 2007 dampened the earnings
contribution from international operations. The continued
strength in the Philippine peso exchange rate also negatively
impacted the company’s reported earnings growth rate
when measured in Peso terms.
“Two thousand seven was a highly successful year for
ICTSI across a number of fronts and the strong financial results
provide further evidence of the success of our strategy.”
said Enrique K. Razon Jr., ICTSI chairman and president.
He added: “All our existing terminals contributed excellent
growth in volumes, revenues, and cash flows and drove our
earnings growth in 2007. In addition, we succeeded in acquiring
five new terminals in China, Syria, Georgia, Ecuador, and
Colombia and completed a significant equity capital raising
exercise. We are focused on improving the profitability levels
of our new terminals to drive future earnings growth.”
ICTSI handled consolidated volume of 3,007,216 TEUs in 2007,
51% higher compared to the 1,995,905 TEUs handled in 2006.
Domestic operations accounted for 1,611,826 TEUs handled or
54% of consolidated volumes, for the full year.
Volumes at the company’s Manila operation increased
14%, from 1,198,875 TEUs in 2006 to 1,372,251 TEUs in 2007.
Foreign container volume grew 83% over last year, driven principally
by the addition of the company’s China, Ecuador, and
Syria port operations, and exceptionally strong growth at
the company’s operations in Poland, Brazil, and Madagascar.
Foreign container volumes now account for 46% of total as
compared with 38% in 2006. Consolidated volume for the fourth
quarter was 911,418 TEUs, 66% higher than the fourth quarter
of 2006.
Full-year gross revenues from port operations increased 27%
to P15 billion, from the P11.85 billion reported in 2006 due
largely to the revenues from new port operations in Ecuador,
China, Syria, Georgia and Davao, Philippines and strong organic
growth at the company’s operations in Brazil, Madagascar,
Poland and Manila.
Revenue contribution from the international operations grew
44% from P5.1 billion in 2006 to P7.4 billion in 2007. Foreign
operations accounted for 49% of this year’s consolidated
gross revenue, as compared with 43% in 2006. Revenue contribution
from the domestic operations, on the other hand, grew 13%
from P6.7 billion in 2006 to P7.6 billion in 2007.
Net revenues, or revenues from port operations after deducting
Port Authorities’ share, totaled P11.4 billion, an increase
of 30% over the same period last year. Port Authorities’
share represents fees and payments to the respective port
authorities at each of the terminal locations of ICTSI. Total
Port Authorities’ share in 2007 revenues grew 17% to
P3.6 billion, from P3.1 billion last year.
Total consolidated cash operating expenses for the year increased
34% to P6.5 billion, from P4.8 billion in 2006 due principally
to additional expenses from new port operations in Ecuador,
China, Syria, Georgia, and Davao, Philippines.
Another factor for the increase in cash operating expenses
was the increase in fuel, equipment and utilities consumptions
related to the increase in TEU volumes at the company’s
operations in Manila, Poland, Brazil, and Madagascar.
Consolidated financing costs and bank charges, on the other
hand, decreased slightly to P687 million compared to 2006’s
P691 million as the company prepaid some of its outstanding
loans during the year.
The Company’s effective tax rate increased to 28.3%,
from 25.8% due to less favorable tax rates affecting international
operations.
Consolidated earnings before interest, taxes, depreciation
and amortization (EBITDA) improved 26% to P4.9 billion in
2007, from P3.9 billion in 2006. The consolidated EBITDA margin
decreased slightly to 32.7% in 2007, from 32.9% last year
reflecting the start-up cost and weaker operating margins
at terminals in China, Ecuador, Syria, and Georgia acquired
during 2007.
During 2007, ICTSI invested 11.6 billion to continue to expand
the handling capacity and improve the operating efficiency
of the company’s operations in Manila, Poland, Brazil
and Madagascar and pay for the acquisition and rehabilitation
of the new terminals in Ecuador, China, Syria, Georgia, Colombia,
and Davao, Philippines.
THE NDC Maritime Leasing Corp. (NMLC) will
launch this year a roll on-roll off service for the Northeastern
Luzon Corridor to ease cargo and passenger movement in the
area.
NMLC recently signed a memorandum of understanding with the
provincial government of Aurora for technical assistance in
its ro-ro transport plans.
The ro-ro transport system is a key development project offering
opportunities not only for Aurora but also provinces within
the Northeastern Luzon Corridor — Quezon, Isabela and
Cagayan. It will initially link the Dingalan-Baler-Casiguran
missionary route with future connections to ports in Quezon,
Isabela and Cagayan, offering a viable mode of transportation
to 24,000 passengers and 30,000 metric tons of agricultural
products for shipment to various destinations.
NMLC president and chief executive Agustin Bengzon hailed
the initiative of the government of Aurora to jointly form
the Northeastern Luzon Pacific Coastal Service Inc (NLPCSI)
with the provincial governments of Quezon, Isabela and Cagayan.
NLPCSI will specifically provide ro-ro transport services.
THE Legislature is accelerating passage of the
country’s anti-smuggling bill in a bid to collect more
revenues for the Government.
The bill, which has been pending at both Houses of Congress
since 2005, seeks to impose stricter penalties against smuggling
which has been bleeding government coffers of about P200 billion
annually.
Based on the proposed bill, the penalty for outright and technical
smuggling is increased from P10,000 to P2 million and imprisonment
from the present 12 years to life. The fines are based on
the appraised value, including duties and taxes, of the imported
articles.
The bill also increases the de minimis provision, aimed at
helping boost cargo volumes. De minimis refers to the minimum
value below which goods in shipment are exempt from cumbersome
scrutiny and documentation procedures at the Bureau of Customs.
In the Philippines, this level is P10 or US$0.20. In comparison,
it is between $20 and $35 in Thailand and Malaysia.
The features of the bill include the submission of advanced
copies of the inward manifest and their publication, publication
of the manifest entry, the use of revision orders as third
screen in detecting undervaluation, the accreditation of bonded
warehouses, stricter rules on the use of bonded warehouses,
and the availability of books of accounts of bonded warehouse.
The proposed bill, however, does not sit well with some stakeholders
such as shipping lines, freight forwarders and brokers.
According to the group, the bill will hamper cargo movement
since it requires reportorial requirements on sectors that
do not have control over such documents in the first place.
