PPA freezes rate hike requests, bidding of ports

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Philippine Ports Authority OIC and assistant general manager for operations Francisquiel Mancile during the press conference for the National Maritime Week Celebration on September 19. Photo from PPA.
  • Requests for upward adjustment of port rates and bidding of ports under its Port Terminal Management Regulatory Framework (PTMRF) have been frozen by the Philippine Ports Authority pending a review
  • The freeze on rate hikes and port bidding are in compliance with President Ferdinand Marcos Jr.’s order to reduce transport costs
  • Officer-in-charge and assistant general manager for operations Francisquiel Mancile said in a press conference PPA is reviewing the “pricing [and the] system [of] delivery” of PTMRF
  • Transport Undersecretary for Maritime Elmer Sarmiento said in the same press conference that PPA has also “frozen many requests” for rate increases and is reviewing existing rates

The Philippine Ports Authority (PPA) has frozen requests to increase port rates and put on hold bidding of ports under its Port Terminal Management Regulatory Framework (PTMRF) pending review.

The suspension of port biddings under the PTMRF is in compliance with President Ferdinand Marcos Jr.’s order to reduce transport costs and make shipping fares affordable, PPA officer-in-charge and assistant general manager for operations Francisquiel Mancile said during a press conference for the 2022 National Maritime Week Celebration on September 19.

Mancile said PPA is reviewing how best to implement Marcos’ directive.

In an interview with PortCalls after the press conference, Mancile said PPA is reviewing the “pricing [and the] system [of] delivery” of the program, noting it is also possible to reduce port rates under PTMRF.

As for ports already bidded out, Mancile said he has requested an update of such ports.

Transport Undersecretary for Maritime Elmer Sarmiento during the same press conference said PPA has also “frozen many requests for upward adjustment of rates” and is reviewing existing rates to reduce them.

Transportation Secretary Jaime Bautista earlier asked PPA to reduce logistics and travel costs, also in compliance with Marcos’ directive.

Among areas being considered for review are statutory and regulatory costs being levied by the ports authority, as well as indirect costs related to the efficiency and productivity of the ports, PPA said earlier.

PTMRF, embodied under PPA Administrative Order No. 03-2016, contains guidelines for awarding terminal management contracts and categorizes investments in ports into six tiers, ranging from a fully private concession to a fully PPA-managed port.

The framework’s objectives include promoting private sector participation in port operations in order to provide higher-quality service.

PPA started bidding out port management contracts under PTMRF in 2020 and has already awarded 18 ports under Tier 3 and one port under Tier 2.

Several stakeholders and business groups, including the National Economic and Development Authority-Regional Development Councils VIII and IX, however, have earlier requested PPA to suspend implementation of new tariffs under PTMRF pending a review and consultations, as they are so much higher than previous rates.

The Philippine Chamber of Commerce and Industry Tacloban-Leyte Inc., Philippine Liner Shipping Association, and Pasig Port Users Against PPA Tariff Increases earlier said that, based on their own computations, PTMRF rates are three digits higher than previous/existing rates.

The new rates are pursuant to PPA AO No. 10-2019, which provides a uniform port tariff that will be used as the base tariff by operators that win contracts for ports categorized as Tier 3 under the PTMRF.

During the August 2019 public hearing on the then proposed new uniform tariff for ports under PTRMF, PPA said it based its proposal on Cagayan de Oro port’s rates, which were the highest among PPA ports. – Roumina Pablo

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