PPA postpones talks on cargo handling rate hike

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  • The Philippine Ports Authority deferred discussions on proposals to hike cargo-handling tariff at North Port in Manila North Harbor and Batangas Port pending further study
  • Trade Secretary Ramon Lopez earlier requested Transportation Secretary Arthur Tugade to hold all port rate increases until 2022
  • The postponement would allow struggling businesses to recover from pandemic losses
  •  The development was welcomed by the Supply Chain Management Association of the Philippines and Philippine Exporters Confederation

The Philippine Ports Authority (PPA) has deferred discussions on proposals for cargo-handling tariff increase at North Port in Manila North Harbor and Batangas Port pending further study, a development welcomed by industry associations.

In a letter dated October 22 addressed to Trade Secretary Ramon Lopez, PPA general manager Jay Daniel Santiago said the ports authority in an executive meeting last August issued a resolution deferring discussion on the application of port operators Manila North Harbour Port, Inc. (MNHPI) and Asian Terminals Inc.-Batangas (ATIB) for tariff adjustments.

Santiago said the proposals are under further study by the PPA committee.

The letter is in response to Lopez’s letter to Transportation Secretary Arthur Tugade last September requesting for the postponement of all port rate increases to 2022 to help struggling businesses recover from pandemic losses.

“Rest assured that the PPA Board is one with the government in its relief efforts during this COVID-19 pandemic,” Santiago told Lopez.

MNHPI is requesting a 15.33% increase in cargo-handling tariff at North Port, the domestic terminal in Manila North Harbor, to cover for the years 2015 to 2020. MNHPI’s last cargo-handling tariff adjustment covered only up to 2014, with no adjustment requests made from 2015 to 2020.

ATI, meanwhile, filed separate petitions last February for a 15.23% upward adjustment in cargo-handling tariff and other cargo-handling related and miscellaneous charges covering Batangas Port Phases 1 and 2. The last cargo-handling tariff rate adjustment for Phases 1 and 2 was in 2017, when PPA granted an 11% increase for Phase 1 and a 9% upward adjustment for Phase 2.

Phase 1 handles passenger, roll-on/roll-off, and bulk cargoes, while Phase 2, also called the Batangas Container Terminal, serves international containerized cargoes. Santiago’s letter, however, only mentioned Phase 1.

Both MNHPI’s and ATIB’s petitions were made pursuant to PPA Administrative Order (AO) No. 02-2018, which prescribes a new uniform formula and procedures for cargo-handling tariff adjustment. Under AO 02-2018, which took effect in March 2018, the cargo-handling/terminal operator may apply for a cargo-handling tariff adjustment if the consumer price index computed by the Philippine Statistics Authority has increased by at least 5% within a three-year period.

Both port operators said CPI has increased for the past years and that they are compliant with requirements under AO 02-2018.

Welcome development

The Supply Chain Management Association of the Philippines (SCMAP) and Philippine Exporters Confederation, Inc. (PHILEXPORT) welcomed the development.

PHILEXPORT vice president for advocacy, communications and special concerns Ma. Flordeliza Leong told PortCalls in a message that “this is a huge relief and a positive signal that the PPA indeed empathizes with businesses and industries that are still struggling in this pandemic.”

She added, “We sincerely appreciate this decision and look forward to continuously engaging the PPA in dialogues towards win-win solutions.”

SCMAP also welcomed PPA’s decision, and hoped “the relevant authorities address the increase in port handling rates, particularly the cranage fees in MNHPI, imposed last year.”

She said increases in port fees should go through a consultation process with stakeholders and be justifiable to maintain competitiveness of businesses, especially as we’re still in the midst of an ongoing pandemic.”

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Last year SCMAP, together with various industry groups and chambers of commerce, collectively asked PPA to suspend implementation of a policy activated in 2020 requiring shipping lines to use quay cranes and pay cranage fees at North Port, saying it was an additional cost and was imposed without proper stakeholders’ consultation.

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Stakeholders during separate public hearings on ATIB’s and MNHPI’s petitions have aired opposition to the proposals, which they said were untimely as businesses are still recovering from the impact of the COVID-19 pandemic. Several industry groups, including PHILEXPORT, SCMAP, and the Export Development Council have also separately and jointly asked PPA to defer approval of the proposed cargo-handling rate increase at North Port for small enterprises’ sake. – Roumina Pablo