Distribution
managers: Prices will stay for now
DISTRIBUTION managers say they are
keeping prices steady for now despite last week's implementation
of Republic Act 9337 or the expanded value-added tax
(e-vat). Distribution Management Associa-tion of the
Philippines (DMAP) public relations officer John Guillermo
said the group's members are maintaining their prices
as the e-vat has so far had minimal effect on their
businesses. The only area that has been severely affected
is fuel spending, he said. The increase in spending
has been brought about not only by RA 9337 but by the
constant rise in prices in the world market, he explained.
"So far, we have yet to increase our prices. We
are maintaining the status quo even with the e-vat.
The decision to suspend the toll fee increase is a big
relief to us. So far, it has just been gas prices affecting
us," Guillermo told PortCalls in an interview.
The Toll Regulatory Board indefinitely suspended the
10% hike in toll rates due to the e-vat, pending a decision
on whether toll operators may pass on the added cost
to the public. "The 10% increase in toll fee would
definitely trigger an upswing in prices which we would
have immediately passed on to consumers," Guillermo
said. For now, DMAP members can "still shoulder
the added (fuel) cost. As long as we can do this, we
will try to hold off any price increase." Still
the association, which has 100 member companies belonging
to the manufacturing and logistics sectors, recently
held a meeting to further assess the e-vat's effects
on business. Earlier, DMAP said that the e-vat when
implemented will render a major blow to its members'
businesses. It said the measure, in addition to increases
in fuel and shipping costs, could trigger price increases
of up to 12%. DMAP is hopeful that domestic shipping
lines will also keep to their promise that they will
not jack up shipping rates beyond the mandatory 10%
e-vat and surcharges related to fuel. Otherwise, the
association said its members will be forced to pass
on to the public any additional increases.
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PISA:
RP business costs way too high
PHILIPPINE INTERISLAND SHIPPING ASSOCIATION
(PISA) executive director Leonardo Odo–o said
the cost of doing business in the country is too high.
What the country needs, he said, are public policy initiatives
that will place the country on a level playing field
vis-ˆ-vis our foreign counterpart. "The industry
can certainly use some more fiscal incentives to achieve
parity with international shipping," he said. A
good start is the proper implementation of the value-added
tax exemption on importation of vessels under the recently
enacted Domestic Shipping Development Act. Also a boost
is the inclusion of the domestic shipping in the 2005
Investments Priorities Plan, which allows Board of Investments-registered
shipping projects to avail of income tax holidays and
import duty exemptions.
Comparative Shipping Cost Component
| |
International
Shipping |
Domestic
Shipping |
| Fuel
oil price |
P16.00
per liter
|
P21.00
per liter
|
| Capital
Cost |
1.5%
to 8%
|
11%
to 14%
|
| Taxes |
|
|
| Percentage
Tax |
Nil
|
10%
|
| Income
Tax
|
Nil
|
32%
|
|
Tax on interest payment
|
Nil
|
20%
|
Import
Duties
|
Nil
|
3%-15%
|
Bureaucratic
Cost
|
Negligible
|
Indeterminate
|
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BOC
hopes to hit collection target
THE Bureau of Customs (BOC) is still
optimistic it can meet its collection target for the
year despite posting a gaping deficit in the last four
months. This after the Port of Manila collected some
P3 billion from the National Food Authority (NFA) as
initial duties payment for its rice importation this
year. NFA owes the BOC some P5 billion in duties and
taxes for its rice importation for the first nine months
of the year. The BOC collection shortfall to date has
reached P12 billion from only P4 billion in July. The
agency has a P151 billion collection target set by the
Department of Finance this year, P21 billion higher
than its target last year. The BOC attributed the fall
in its collection to the constant drop in import volume
and the deficit in the collection of duties and taxes
for so-called sin products. BOC said import volume is
down 30% in the last nine months while sin tax collection
is lower than projected. The BOC hopes to correct the
situation in the last three months of this year where
import volume is traditionally up due to the influx
of Christmas cargoes from Filipino overseas workers.
"We expect a rebound in the last quarter... (as
it is) import volume has already started to pick up,"
it said.
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ATSC
to hike rates, cut fleet
ABOITIZ TRANSPORT SYSTEM CORP. (ATSC)
will reduce its fleet and contemplating on increasing
charges to cushion effects of high fuel costs. ATSC
finance chief Lilian Cariaso said ATSC is also trying
to put its house in order with the consolidation of
its subsidiaries. The company's fuel cost reached P92.7
million for the first nine months of the year. This
prompted ATSC to implement a 10% fuel and bunker surcharge
last month. ATSC operates the SuperFerry fleet calling
in more than 20 ports nationwide and SuperCat ferries
calling in 10 ports nationwide and an estimated combined
50 round trips daily. It also operates the 2GO brand
for its cargo business.
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Marina:
Cabotage stays
THE Maritime Industry Authority (Marina)
said the lifting of the cabotage law is inappropriate
at this time because the industry is not strong enough
to compete internationally. "We should maintain
our cabotage law until such time that the entire playing
field is level," Marina administrator Vicente Suazo,
Jr. told PortCalls in an interview. Several associations,
including the the Philippine Chamber of Commerce and
Industry, are lobbying for the lifting of the cabotage
law. They said this will allow more foreign shipping
investors into the country, increase port revenues,
and produce more competitive service from local players.
Embodied in Sections 902 and 1009 of the Tariff and
Customs Code of the Philippines, the cabotage law prohibits
foreign carriers from engaging in domestic coastwise
trade. "We still need some time to further improve.
Lifting cabotage will only dampen the growth being experienced
by the local industry now," Suazo stressed. "Instead,
the country should continue to look for additional incentives
to be given to local operators to acquire new vessels
for them to be at par with their foreign counterparts,"
he said. Some sectors, particularly members of the Philippine
Interisland Shipping Association, are against the lifting
of the law, claiming their business will suffer when
they compete head on with their stronger foreign counterparts.
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2006
infra program to hit P127B
GOVERNMENT is looking to spend P126.7
billion for new public infrastructure next year, P11.1
billion or almost 10% higher than this year's P115.6-billion
infrastructure spending program. Cebu Rep. Eduardo Gullas
said the spending plan represents some 2.4% of next
year's estimated gross domestic product of P5.3 trillion.
The new infrastructure spending schedule, contained
in the 2006 national budget, covers P62.3 billion worth
of projects under the Department of Public Works and
Highways, mainly to upgrade roads, bridges and flood-control
facilities. The program also covers P14.2 billion worth
of projects under the Department of Transportation and
Communications such as P1.2 billion to be spent for
building seven key roads: P400 million for the NAIA
Expressway; P220 million for Commonwealth Avenue; P342
million for R-10; P100 million for Quezon Avenue; P30
million for Congressional Avenue; P30 million for the
Taguig Diversion Road; and P100 million for C-5. In
addition, P670 million will be spent to widen and cement
the McArthur Highway in Metro Manila, Bulacan, Pampanga
and Tarlac. Some P3.3 billion will also be spent to
upgrade airports, seaports and navigational facilities.
Airports in Ilocos Norte, La Union, Pampanga, Bohol
and Palawan have been lined up for improvement to invigorate
trade, investment and tourism. This is on top of new
airports being built in Bacolod City, Iloilo City and
Coron, according to Gullas. Gullas said P1 billion will
be used to reinforce the nautical highway system as
an alternate route for farm produce as well as passengers.
ICTSI
rolls out Toamasina, Madagascar investment
INTERNATIONAL CONTAINER TERMINAL SERVICES,
INC. (ICTSI), through its subsidiary, Madagascar International
Container Terminal Services Limited (MICTSL), is rolling
out investment at its new container handling concession
in Toamasina, Madgascar. Societe du Port Gestion de
Toamasina (SPAT), the new port authority for Toamasina,
recently formally handed over control of the new container
terminal facility. This followed a contract signing
ceremony, which saw Jan Mors, ICTSI Ltd. senior vice
president, and Christian Gonzalez, MICTSL chief operating
officer, exchange gifts with Pierrot Botozaza, SPAT
director general, and other key port authority executives.
Gonzalez highlighted the forecast of independent shipping
analysts that container traffic through Toamasina, which
totaled 104,000 TEUs in 2004, is expected to double
by 2009, and the positive economic impact this will
deliver to Toamasina and Madagascar as a whole. Key
MICTSL management and operations executives were in
the area for months prior to the handover, implementing
the first phases of a comprehensive plan to develop
the Toamasina facility into a world-class container
terminal. Major areas of attention included extensive
yard reorganization; establishing proper safety, security
and organizational policies for yard and marine operations;
developing a proper gate and allied billing operation;
manpower orientation and training; and the preparation
of an operations manual for clients. Investments in
container handling equipment have also been undertaken
including three reach stackers and 17 terminal tractors
acquired from Kalmar, 21 terminal trailers, Stinis autotwist
spreader systems, and empty handling equipment. The
initial handling system investment, equivalent to $3
million, will be supplemented over the next 12 months
with a $5-million outlay for the purchase of additional
reach stackers and the introduction of rubber-tired
gantries, and a phased equipment training program for
terminal operations and maintenance staff. Information
technology (IT) system deployment is also a priority.
MICTSL has invested in bespoke gate and yard management
systems and container terminal billing systems developed
in-house and first deployed at the Manila International
Container Terminal. IT systems will be further expanded
with the implementation of a full Terminal Operating
System (vessel, yard, gate, EDI) by third quarter 2006,
the installation of an in-house developed productivity
yard and monitoring system, and establishing direct
links to customs, SGS and Tradenet. The next 24-month
period will see investment in infrastructure, including
the rehabilitation of 280 meters of quay; the strengthening
of the terminal's berth C2 so as to be able to accommodate
mobile harbor crane operation; on the landside, the
rehabilitation of 12 hectares of container stacking
area; and the construction of a gatehouse, operations
control center and administration building. The total
investment in civil works alone over the next 24 months
is expected to exceed $13 million. "Our total investment
over the short term in infrastructure, equipment, IT
systems and human resources will easily exceed $30 million,
and while we are rolling this out, we are already developing
detailed plans for the further development of the terminal
over the longer term. This will necessitate further
sizable investment in all key areas," said Mors,
who has overall responsibility for the Toamasina project.
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