Forwarders' reaction
on increased capitalization requirements mixed
MOST members of the Philippine
International Seafreight Forwarders Association
(PISFA) want to increase the minimum paid-up capital
required for operating a freight forwarding business
to P5 million with a phase-in period of two years.
Most members of the Alliance of Concerned Freight
Forwarders (ACFFO), on the other hand, want the
status quo. These were the results of separate
surveys conducted by the associations on proposed
changes to the Philippine Shippers' Bureau (PSB)
administrative order (AO) number 2, according
to PISFA president Erich H. Lingad. AO 2 covers
requirements on minimum paid-up capital, qualification
of corporate officers, and cargo insurance, as
well as violations and sanctions.
On the proposal to raise the
required minimum capitalization, 70% or 82 of
the 117 PISFA member companies agreed, while 17.95%
or 21 members disagreed. Fourteen or 11.96% had
no comment. PISFA members control the freight
forwarding market in the Philippines. The PSB
proposal increases to P5 million the minimum capital
requirement for non-vessel operating common carriers
and cargo consolidators from the current P500,000
and P400,000, respectively.
Lingad said the associations
"want… PSB (to) justify and explain
the basis for the minimum paid-up capital requirement."
PSB has earlier said the increase is justifiable
since the present capitalization requirements
hark back to 1997 when the average peso-dollar
rate was P26. In addition, PSB proposes to collapse
into one category the currently separate categories
of international freight forwarder and breakbulk
agent. Under the proposal, the new consolidated
category will have a minimum paid-up of P3 million.
Present capitalization requirements are P300,000
and P250,000, respectively.
Under the proposed AO, domestic
freight forwarding firms would still be required
a minimum paid-up of P250,000. Of the 82 PISFA
member companies who said they were agreeable
to an increase, 78 or 95% responded to the question
of how much increase they wanted. Thirty nine
of the 78 or half were amenable to an increase
to P5 million; 16 or 20.5% want P3 million; and
23 or 29.4% want P2 million.
On the matter of the phasing
in period for companies to achieve the required
minimum capital, only 79 of 117 member companies
responded, of which 37 or 46.8% said they wanted
a phase-in period of one year, and the rest or
42 companies wanted two. Meanwhile, a total of
158 ACFFO members responded to the survey, of
which 78.48% (124 members) said they did not want
an increase against the 27.42% (34 companies)
who said they did. Of the 34 who said they wanted
an increase, 15 companies are agreeable to an
increase to P1 million; 11 companies, P2 million;
six companies, P3 million; and one each, P4 million
and P5 million.
On the qualification requirements
of corporate officers and key operating personnel
of a freight forwarding company, PISFA and ACFFO
recommended the following:
-
five years experience in
a managerial position for at least one of
the stockholders, or at least equivalent functions
in shipping, freight, forwarding and related
activities subject to evaluation by the PSB;
-
that officials undergo training
on basic freight or advance freight forwarding
seminar, complete with certificate, or pass
the qualifying exam of PSB before accreditation;
-
that a certification from
the previous employer must be secured; and
-
that new applicants be announced
to accredited forwarders either through e-mail,
letter, or advertisement in any industry newspaper.
For renewal, the associations
proposed the submission of a character reference
from any two customers (importers/exporters) who
are members of any industry association. On the
issue of cargo insurance, they said the PSB should
determine and justify the minimum amount required.
The PSB-proposed minimum amount of insurance coverage
is P5 million for NVOCCs, P3 million for international
freight forwarders, and P250,000 for domestic
freight forwarders.
Violations and sanctions, the
associations said, must be made more specific,
particularly violations 8 and 10 of the AO, involving
refusal or failure of an accredited firm to comply
with orders of PSB and the violation of the Code
of Ethics. Lingad said PISFA is open to suggestions
from both members and non-members. He said the
association expects feedback from PSB early next
month.
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Shipping companies told to report
tax declarations to MARINA
TO keep their books clean, shipping
firms will be required by the Maritime Industry
Authority (MARINA) to submit a quarterly report
on the taxes paid to the Bureau of Internal Revenue
(BIR). This will aid in the monitoring and identification
of tax violators and shipping companies who have
false profit declarations, said MARINA administrator
Vicente T. Suazo, Jr.
He said the maritime agency
will come up with a directive, requiring all shipping
companies, particularly ship operators and shipyard
companies, to present a comprehensive account
of their excise payments. The report should include
actual proof of payment, the mode or scheme of
payment and other essential information, he added.
Suazo said the maritime agency
will be closely coordinating with the BIR to help
fix the discrepancies. "We should help solve
this issue. The shipping industry, for one, is
expected to be a big contributor to the country's
economy," Suazo stressed. Earlier, various
shipping companies were warned regarding the discrepancies
in the profits they declare and the actual revenues
they earn before the government checks on their
records.
The BIR directed the companies
following a pronouncement made by Negros Oriental
Rep. Herminio Teves regarding the alleged fraud
in the declaration of taxes. Records from the
Philippine Coast Guard showed a total of 55 million
people who rode passenger ships in the country
last year, amounting to an average fare cost of
around P400. However, the BIR collected only P950
million in taxes from the shipping sector last
year.
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MARINA eyes phaseout of single-hulled
bulk carriers, tankers by 2008
THE Maritime Industry Authority
(MARINA) plans to disallow the operation of single-hulled
oil tankers and bulk carriers in the Philippines
by 2008 in line with a directive from the International
Maritime Organization (IMO). MARINA administrator
Vicente T. Suazo, Jr., in a dialogue with members
of the Philippine Interisland Shipping Association
(PISA) recently, said the move is necessary to
prevent maritime disasters similar to the Prestige
incident two years ago.
"This is not only part
of the government's plan to pursue modernization
of our ageing fleet, but likewise adhere to the
safety and security measures set by the IMO to
avoid accidents at sea," he stressed. Prestige,
a single-hulled tanker operating in the international
trade, split in two before sinking after it was
battered by strong waves and winds off the Spanish
Galician Coast in November 2002. The incident
caused the spilling of more than 77,000 liters
of bunker fuel, which became disruptive to the
coastal economy of France, Spain and nearby areas.
This forced the European Union and the IMO to
work on the phase out of single-hulled tankers.
According to the IMO, the total
phase out of single-hulled tankers is in three
phases. The final phasing out date for Category
1 tankers (acquired before the Maritime Pollution
Convention was ratified or pre-MARPOL tankers)
is 2005 (brough forward from 2007). The final
phasing out date for category 2 and 3 tankers
(MARPOL tankers and smaller tankers) is 2010 (from
2015).
In the Philippines, however,
the tankers' group under PISA has expressed strong
opposition to the implementation of the regulation
in the Philippines. The group argued the policy
is not applicable in the domestic trade since
oil carried in international trade is not as big
as that carried by local tankers. A representative
from Pilipinas Shell, the country's largest oil
carrier, pointed out the imposition of a similar
policy may not be financially viable, specifically
at this time that the country is going through
an economic recession.
Suazo said MARINA will give
companies leeway in case they have not prepared
fully for 2008. He added the maritime agency will
help companies seek funds to acquire double-hulled
tankers.
Back to Top
Garment exports
jump 5% in September
THE Garments and Textile Export
Board (GTEB) reported a 5% increase in the export
of Philippine garments to $237.907 million from
$225.622 million last month. This is a turnaround
from the successive slump in the previous months,
noted the agency which administers export quotas.
The increase was attributed to the rise in demand
in quota countries, particularly the United States,
and stronger sales among global brands.
"The growth is driven by
exports to the US and the European Union (EU),
with the US growing at 12% in August, 5% in September
and 32% in the first two weeks of October,"
GTEB said. The garments board added exports to
the EU increased 19% in August, 27% in September,
and 26% in the first two weeks of October.
Back to Top
NENACO seeks P127
M funding
NEGROS NAVIGATION COMPANY (NENACO)
is seeking new sources of funding to complete
the required P250-million fresh cash under its
rehabilitation program. The company, which earlier
petitioned that its shares be delisted from the
Philippine Stock Exchange (PSE), still lacks P127
million. Based on the court-approved recommendations
of its receiver Monico V. Jacob, the company needs
new money for the maintenance of its vessels.
NENACO corporate information
officer Willard G. Mosquito, in a PSE disclosure,
said the company has already obtained a P123-million
loan for partial payment of the shipping firm's
tax liabilities. It expects to come up with the
needed balance through equity or loan infusion.
"In the event that we obtain the said balance
by way of loan, the provisions of our court-approved
rehabilitation plan, will not affect, in any way,
our capital structure. However, in the event that
we obtain the said balance by way of equity infusion
from third parties, our capital structure will
be changed accordingly," Mosquito said.
The P250 million will be infused
into NENACO periodically beginning this year until
mid-2005 to pay the shipping firm's tax liabilities,
repair St. Ezekiel Moreno, and for drydocking
costs of two of its vessels. Mosquito asked the
PSE to consider NENACO's delisting in view of
its ten-year rehabilitation plan. The petition
was in view of a tender offer by Metro Pacific
Corp., its parent company, to buy back its remaining
85 million shares equivalent to 2.81% of its outstanding
capital stock. Metro Pacific tendered an offer
to buy back the shares at P0.16 each for a total
of P13.6 million. The tender offer started on
Oct. 20 and will end on Nov. 17.
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Archives
| 2004 Q1 : October
| Novemeber
| December
October
4 | October
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October 20
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