Ship operators hail appointment of undersecretary for maritime affairs

Filipino overseas shipping operators have hailed the recent decision of Transportation and Communications Secretary Leandro Mendoza to appoint an undersecretary to handle maritime affairs at the DOTC.

The Filipino Shipowners Association (FSA) said the designation of Agustin Bengzon as undersecretary in charge of water transportation and matters related to shipping would boost the DOTC’s focus in facilitating the growth of the shipping industry.

Bengzon’s designation is the first in the department for so many years. He is a former administrator of the Maritime Industry Authority (Marina).

FSA president Carlos C. Salinas said the shipowners are "very thankful" to Mendoza, who they said "shares our view." The designation forms part of FSA’s appeal to Mendoza in a meeting late last year on the importance of the overseas shipping sector in the growth and development of the Philippine economy.

At the said meeting, the FSA also requested the DOTC secretary for support in ensuring the enactment of necessary laws that will facilitate the growth and development of the Philippine overseas shipping industry.

At present, there are 131 active overseas shipping companies having a total of 185 Philippine-flagged ships which generated P80.2 million in government revenues for the first half of 2002 and are expected to double by the end of the year, according to Salinas.

FSA said the revenue generated by the government from shipping operations can be further increased if the Philippine merchant fleet expands which the Filipino shipowners can achieve through access to local and foreign funding to finance the acquisition of modern ships.

Republic Act 7471 (Philippine Overseas Shipping Development Act of 1992) was intended to grant incentives to Filipino shipowners but the law limits the availment of the incentives to shipping companies directly carrying passengers or cargo.

Filipino shipowners also faced difficulty sourcing foreign funds to modernize their fleet due to the inadequacy of Presidential Decree 1521 (the Ship Mortgage Decree of 1978) to gain the confidence of the foreign financiers.

For the past years the total trade of the Philippines was 67 million metric tons (MT) with a total paid freight of $4 billion. Out of this total, 66 million MT with a total of $3 billion in freight payments were carried by ships. Only four million MT out of the 66 million MT were carried by the Philippine-flagged ships or only about 5.8 percent of the 99.22 percent of the trade volume was carried by ships.

The FSA is optimistic that with Bengzon at the helm of the maritime affairs at the DOTC, the shipping industry’s concerns and challenges will be properly addressed.