Importers and port stakeholders have widely opposed a petition for a 25 percent hike in cargo handling tariff for international containerized cargo at the Batangas Container Terminal, which is being evaluated by a technical working group of the Philippine Ports Authority.
In a recent public hearing, Department of Transportation Assistant Secretary for Maritime Fernando Juan Perez admitted that the planned upward adjustment will lead to higher prices of consumer goods even as he acknowledged the need for the Batangas terminal to survive.
“This (tariff) will impact on the regular Juan dela Cruz as the consignees will just pass this increase to the consumer. The increase is too big for the ordinary layman,” he said.
Based on the minutes of the meeting, Fernie Casiño of Suzuki Motorcycle Industries said the increase will jack up prices of motorcycle units.
But Perez noted that the impact of the tariff hike will not just be on motorcycles but on other goods as well such as chicken, rice and flour.
Earlier, a PPA technical working group approved a hefty increase in cargo handling tariff for the ManilaNorth Harbour Port Inc. despite a united position of stakeholders rejecting the hike, citing adverse effects of such adjustment on ordinary Filipinos as well as on government efforts to improve business competitiveness.
The PPA board last week gave the green light for MNHPI’s request for a 24 percent tariff increase, which will be implemented in three tranches.
But clients of the Batangas terminal have rejected the argument of Asian Terminals Inc., which operates the facility, that the upward adjustment was a “cost recovery measure” since the port terminal’sprofit actually increased last year.
JR Dayco of MCC Transport/Maersk raised the issue that ATI enjoyed an increase in volume since 2013.
ATI vice president for commercial and marketing Sean James Perez, however, argued that since 2010 when the company started operating the container terminal until 2013, there was “no market or income.”
ATI earlier issued a statement announcing that its net earnings rose eight percent last year at P1.91 billion, up from P1.77 billion in 2015 on the back of record volume of cargo handled by its international ports in Manila and Batangas.
The company said foreign container throughput handled by BCT also reached nearly 160,000 TEUs, or an increase of 18 percent.
Freddie Naagas, president of 101 Supply Chain Solutions Inc., said if the PPA will approve the proposed tariff hike, it would force cargo owners to transfer their operations to Manila.
“In case the 25 percent increase is approved, the freight in Batangas will be higher. Thus, cargo owners and truckers would rather use Manila than Batangas,” he said.
JG Summit Petrochemical Corp. assistant manager Sarlie Trinos, for her part, said while they understand the need to adjust the tariff to cover maintenance and provide additional equipment, a 25 percent hike is “really high.”
“The increase should be lower or at least minimal. JGSPC has about 450 containers a month, and with the increase and in case there will be no improvement, we will opt to use Manila,” Trinos said.
Perez appealed to BCT clients to reconsider their plan to transfer to Manila if the cargo handling tariff adjustment pushes through.
“There was no adjustment for cargo handling tariff for six years. We appeal to port users to accede to our request for an increase. ATI also needs to survive,” he said.
Perez said the increase will also cover investments in new equipment as well as ATI’s plan to extend the terminal’s berth length by 600 meters to accommodate more containerized cargo vessels.
In a presentation made by ATI assistant vice president for business development Edward Baking, he cited increases in labor, fuel, and power costs as well as foreign exchange adjustment to support the planned tariff hike.
The same presentation, however, showed that cumulatively, from 2010 to 2015, fuel cost per liter went down by 36 percent while power cost per kilowatt hour also decreased by 12.5 percent.
Baking insisted that the impact of the upward adjustment on basic commodities will be minimal. In particular, he claimed that prices will only increase by 0.16 percent for sugar; 0.32 percent for rice; 0.23 percent for flour; 1.51 percent for cement; 0.096 percent for chicken; and 0.033 percent for milk.