PPA defends implementation of new port tariffs

MANILA, Philippines — The Philippine Ports Authority (PPA) has justified the implementation of new tariffs in the ports of Tacloban, Ormoc and other ports in Region VIII, which the National Economic and Development Authority regional council had asked to suspend following appeals from business groups.

A letter was submitted by the PPA to NEDA’s Regional Development Council (RDC) VIII chairperson and Leyte Gov. Leopoldo Dominico Petilla, a copy of which was provided to The STAR, in response to the latter’s resolution requesting for the suspension of the implementation of the new tariffs in the ports of Tacloban, Ormoc and other ports in Region VIII.

The RDC VIII in its resolutions has asked the PPA to review and consider the implementation of PPA Administrative Order 10-2019 and reduce the uniform port tariff commensurate to the CPI-based formula prescribed in the said administrative order.

PPA general manager Jay Santiago said the agency decided to implement the new tariff system because a delay in implementing the agency’s mandate would only increase port costs.

“PPA believes that the new schedule of cargo handling tariffs at the ports of Tacloban, Ormoc and other ports in Region VIII as well as other ports bidded under the Port Terminal Management Regulatory Framework is simplified, easier to implement, less complicated and has reduced the number of cargo classification and therefore more beneficial at the ports in Region VIII,” he said.

Santiago said the ports of Tacloban, Ormoc, and other ports in Region VIII have not increased their cargo handling tariffs since 2013.

“The increase in rates may be evident for most commodities, however, PPA is also committed to ensure that the increase will be commensurate to the quality in the delivery of port services to our port users despite these unprecedented times,” he said.

Santiago said the uniform port tariffs under PPA Adminstrative Order 10-2019 noted a small percentage of increase on consumer goods from the old cargo handling tariffs at the port of Tacloban.

The Philippine Chamber of Commerce and Industry Tacloban-Leyte Inc. and the Ormoc City Chamber of Commerce and Industry Inc. have previously expressed opposition to the increase in tariff rates.

As stated in the resolution passed by the RDC VIII in December last year, among the concerns raised by PCCI is the lack of explanation and consultation regarding how the PPA derived the new port tariffs.

It said the proposed tariff is projected to have adverse economic implication, such as the increase of prices for common goods that are coursed through the Tacloban City port.

According to the group, any upward movement in the cargo handling cost will impact on the retail prices of goods in all parts of the region.

Further, the PCCI said the new arrangement is seen to only benefit the newly contracted port operator at the expense of the consuming public which is already affected by the pandemic as a direct result of the uniform rates.

It added  the required facilities in Tacloban City port are already in place and available for an efficient and competitive cargo handling function, thus the prescribed investment plan for Tier 3 port does not justify the increase in tariff rates.

The PPA awarded last year a contract to operate the said port to the joint venture group of Harbor Center Port Holdings Inc. and Z.C. Integrated Port Services Inc.

On the uniform port tariffs, the PPA said these were determined by using the rates of the port of Cagayan de Oro as the schedule of cargo handling tariffs considering that the said port has the most updated rates adjusted for inflation and CPI among the Tier 3 ports at the time the policy was drafted.

Before the adoption of the uniform port tariffs, the agency said public hearing was conducted and stakeholders were also given 10 calendar days after the public hearing to submit their position paper.

The uniform port tariffs took effect on Nov. 10, 2019.

“Tariffs for goods transported though RORO did not increase while there is only a minimal adjustment for breakbulk and containerized cargoes. Compared to tariffs of major ports like Manila, Batangas, the Tier 3 rates are comparatively lower,” the PPA said.

Aside from the RDC VIII, a resolution was also issued by RDC IX in September last year, also requesting the PPA to suspend the implementation of the new tariffs in the port of Zamboanga City.

“In a similar request we received from RDC IX Zamboanga Peninsula, we appeal for consideration and likewise appeal to you that PPA responded to local and national demands for improved port service delivery, by implementing the port terminal management policy through procurement of terminal concessionaire with proven experience and financial resources to directly manage, operate, equip, and maintain port and ancillary services with PPA as landlord under a medium (15 years) and long-term (25 years) contract arrangement,” Santiago stated in his letter to the RDC VIII.

As an update at Zamboanga port, Santiago said that the efforts extended by the PPA to all government and private stakeholders on its thrust to provide port facilities and services at par with global best practices were accepted and understood by the stakeholders.