Home » Maritime » State contracts remain elusive to RP-flag carriers

OPERATORS of Philippine-flag vessels are unlikely to profit from more shipping opportunities caused by higher rice imports this year.

The Filipino Shipowners Association (FSA) said foreign vessels will continue to win government contracts because the odds remain greatly in their favor.

The association said the narrow shipment delivery window and the uneven tax structure keep Philippine-flag vessels from the bidding arena.

Philippine-flag ships are levied a 6% withholding tax and 2% contractor’s tax. Foreign-flag carriers are not.

The Philippines is the world’s biggest rice importer. This year, the National Food Authority will import an estimated 3 million metric tons (mmt) of rice from the usual 1.5mmt to plug an expected increase in demand due to the El Niño phenomenon and the lean months between July and September.

FSA has long been asking government to support its call for a bigger role in the carriage of state-owned imports such as rice and coal. This, they said, would boost business and, in turn, help grow the fleet.

The bulk or 85% of government’s foreign trade is carried by foreign-flag vessels. FSA members want to handle at least half of that pie from the current 5%.

Despite the global economic crisis, Filipino shipowners plying international waters had a strong 2009 finish due to increased business from China.

FSA members are mostly operators of bulk carriers of up to 175,000 deadweight tons.

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