July 26, 2017, 2:48 am
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PPA AT 43: Toward globally competitive ports services

THE Philippines today is in its best position in decades to realize growth prospects that have not been anywhere near past projections. Playing a critical role in the country’s development into a full-fledged emerging market that will benefit from a constant inflow of investments and strong commerce and trade is its system of domestic and international ports. Mandated “to establish, develop, regulate, manage and operate a rationalized national port system in support of trade and national development,” the Philippine Ports Authority envisions an agency that by 2020 “shall have provided port services of global standards.”

As it marks its 43rd anniversary this year, the PPA, through its development programs, highlights a mission to 1) provide reliable and responsive services in ports, sustain development of communities and the environment, and be a model corporate agency of the government; 2) establish a mutually beneficial, equitable, and fair relationship with partners and service providers; 3) provide meaningful and gainful employment while creating a nurturing environment that promotes continuous learning and improvement; and 4) establish a world-class port operation that is globally competitive adding value to the country’s image and reputation Prior to the creation of PPA, port administration in the Philippines was merged with the traditional function of revenue collection of the Bureau of Customs (BOC).

Port and harbor maintenance was the responsibility of the Bureau of Public Works (BPW). In the early 1970’s, there were already 591 national and municipal ports plus 200 private ports scattered all over the country necessitating the need for long-range planning and rationalization of port development.

There was an identified need to integrate and coordinate port planning, development, operations and regulation at the national level.

Around this time, the Bureau of Customs had proposed to the Reorganization Committee and to Congress the creation of a separate government agency to integrate the functions of port operations, cargo handling and port development and maintenance to enable the Bureau to concentrate on tax and customs duties collection.

Moreover, the World Bank, as a condition for the grant of a port development loan in 1973, stipulated the creation of a port authority to oversee the implementation of projects under that loan.

The Philippine Ports Authority was created under Presidential Decree No. 505 which was subsequently amended by P.D. No. 857 in December 1975.

The government then, realizing that the establishment and operation of port authorities in other countries resulted in improved operation, sought to bring the benefits of having a national port authority tasked with administering and managing the country’s ports.

P. D. No. 857 broadened the scope and functions of the PPA to facilitate the implementation of an integrated program for the planning, development, financing, operation and maintenance of ports or port districts for the entire country. In 1978, the charter was further amended by Executive Order No. 513 the salient features of which were the granting of police authority to the PPA, the creation of a National Ports Advisory Council (NPAC) to strengthen cooperation between the government and the private sector, and the empowering of the Authority to exact reasonable administrative fines for specific violations of its rules and regulations.

By virtue of its charter, the PPA was attached to what was then the Ministry of Public Works and Highways (MPWH) which also served as the executing agency for all port construction projects. Under this set-up, PPA prepared the general plans, programs and project priorities while the MPWH was responsible for detailed engineering, actual construction and/or supervision of port construction projects The PPA was subsequently removed from under the jurisdiction of the MPWH (DPWH) and attached to what is now the Department of Transportation and Communications (DOTC) for policy and program coordination.

Subsequently, by virtue of Executive Order No. 159, which was issued in 1987, the PPA is now vested with the function of undertaking all port construction projects under its port system, relieving DPWH of this responsibility.

The executive order also granted PPA financial autonomy.

The PPA privatization program was aggressively pursued through the initial implementation of the privatization of the Manila International Container Port (MICP) and the subsequent awarding of the contract to operate the MICP for a period of twenty-five (25) years to the International Container Terminal Services, Inc.

The PPA underwent a major facelift after the Governance Commission for GOCCs approved the agency’s Rationalization Plan which abolished the five Port District Offices put into place in 1988 and distributed its powers to the newly refurbished list of Port Management

Offices from 24 PMOs to 26, which include:

PMO Northern Luzon
PMO Bataan / Aurora
PMO Batangas
PMO Marinduque / Quezon
PMO Mindoro
PMO Puerto Princesa
PMO Bicol
PMO Masbate
PMO Negros / Siquijor
PMO Panay/Guimaras
PMO Western / Southern Leyte / Biliran
PMO Eastern Leyte / Samar
PMO Bohol
PMO Negros Occidental / Bacolod / Banago
/ Bredco
PMO Misamis Occidental / Ozamiz
PMO Misamis Oriental / Cagayan de Oro
PMO Agusan
PMO Davao
PMO Cotabato
PMO Socsargen
PMO Zamboanga Del Norte
PMO Zamboanga
PMO Surigao
PMO Lanao Del Norte / Iligan

The PPA today a mintains 115 ports nationwide 10 of which are considered major gateways and 16 are dubbed as hub ports. These ports handle majority of domestic and foreign passage traffic as well as the country’s foreign and local trade.

PPA is also a constant member of the ‘Billionaires Club’ in terms of dividends remitted to the National Government by GOCCs.

This 2017, the PPA is in its third tranche of filling up another 25% of existing vacant positions based on its approved Rat Plan as they also continue to complete processing the positions approved in 2016 within the first quarter.

PPA has really continued to move on and is still moving forward towards a bright future.

On my part, I am now on the other side of the fence as a port user but still with the same goal and hope for PPA to be a major player in the economic development of our country and to be at par, if not better than other Port Authorities. (Historical details provided by Vicente T. Suazo, Jr., former PPA Assistant GM for Operations and Review of Operations In 2016, the PPA was able to handle a total cargo throughput of 249.567 mmt or some 25.895 mmt higher than the 2015 volume of 223.672 mmt. Foreign cargoes accounted for 151.604 mmt or an increase of 12.62% versus the 134.620 mmt handled in 2015 while domestic cargoes contributed 97.963 mmt from 89.051 mmt or an improvement of 10%.

Container volume, also posted positive figures rising 12% to 6.574 million twenty-foot equivalent units (TEUs) from 5.861 million TEUs handled in 2015. Foreign containers inch-up 14.11% to 3.973 million TEUs while domestic boxes rose 9.28% to 2.6 million TEUs for the period in review. Total import boxes is at 2.005 million TEUs while Export containers is at 1.968 million TEUs wherein both posted increases of 15.4% and 12.8%, respectively.

Among the ports, which registered strong performance, include the Manila International Container Terminal and Manila South Harbor for international cargoes, North Harbor for domestic cargoes as well as Cagayan de Oro, Davao, and Iloilo.

Philippine exports sustained its strong performance in 2016, propelling the country’s cargo volume higher by 12% compared to its year-ago level. Export cargoes comprise 49% of the total cargo volume handled by the different ports nationwide. It increased by 23% for the entire 2016 period from 60.855 million metric tons (mmt) to 74.822 mmt registered a year earlier. Import volume, on the other hand, contributed 51% to the total after posting a 4% increase to 76.781 mmt from 73.765 mmt in 2015.

From 2010 up to the end of the first semester of 2016, the PPA was able to provide adequate facilities and services to accommodate sustained increases in cargo throughput, vessels and passengers with an annual average increase of 6.11%, 2.74% and 3.74%, respectively.

The agency was also able to complete 251 projects which have, among others, increased berth, back-up areas, passenger seating capacity and Ro-Ro berths throughout the country at a combined cost of P9.8 billion.

Specifically, Ro-Ro projects facilitated the carriage of goods and people, promoted domestic tourism, reduced cargo slippage by at least 50% and cost by 30%.

PPA has likewise maintained the ports under its control in optimal operating condition at all times resulting in sustained safety and revenue growth with an average annual increase of 10%.

Port of Manila ranks 36th among top 100 container ports The Port of Manila jumps two notches higher to number 36 in the raking of the top 100 Container Ports, according to a report released by Lloyd’s List and Containerization International for 2016.

The report showed that the Philippines was able to increase their ranking after the country was shielded from the slowdown in China that has hurt other emerging nations in 2015, as government stepped up efforts to unlock bottlenecks in state spending and entice investment. It added that the growth in the country’s Gross Domestic Product exceeded expectations anchored on the 6.1% pace posted in the third quarter for the period in review. Philippine GDP in the three months through to December for the period increased 6.3%. Manila’s economy, for the whole of the period, grew 5.8%.

“Port of Manila registered a 4.3% hike in container throughput, with principal facility the Manila International Container Terminal (MICT) posting a 4.4% increase in containers handled,” the report showed.

Among the reasons that Manila posted the favorable growth include the inauguration of Berth 7 at the MICT, which included the commissioning of four rubber-tyred gantries as well as the rollout of the terminal appointment booking system (TABS) ahead of the anticipated increase in container movements prior to the Christmas holiday season as well as the revival of ICTSI’s inland container depot in Laguna.

TABS is an electronic platform for booking containers in the two international ports of Manila. The system was developed in response to restrictive road policies that were introduced to combat heave congestion of Manila ports in 2014 as a result of the truck ban imposed by the Manila City Government. 2017 and onwards

The PPA anticipates trade volume will continue to rise as the population growth and trade barriers continue to collapse, especially within the context of the ongoing Asean integration.

The agency is also aware that once volume increases, marketing of secondary ports strengthen and shipping lines become willing to divert goods major ports.

PPA also recognizes the need to integrate and align all the various port developments throughout the archipelago in order to serve the decentralization of the country. The current plan is to identify certain ports, and ensure that they are aligned in terms of standards of cargo handling.

The modernization and development of the ports of Davao-Sasa, Iloilo, Cagayan de Oro, General Santos and Zamboanga are within the mediumterm plans of the PPA, and the route to their privatization will be a public-private partnership arrangement, although different modalities are being evaluated.

These five ports have been identified as both strategic and commercially important, with Davao-Sasa being the priority target for development although, on a more conservative and cost-efficient level than originally planned.

PPA is also in the process of procuring vessel traffic management solutions (VTMS) equipment to cover five additional locations in addition to the ports of Batangas and Manila.

However, the long-term intention is to install appropriate VTMS facilities in most of the major ports to ensure offshore safety is addressed.

In addition to fostering safety, it is best practice to use VTMS in berthing management, environmental protection and planning for cargohandling operations.
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