Port stakeholders should brace themselves for steeper cargo handling fees starting August 2024 at the City of Manila’s international ports.
The Philippine Ports Authority (PPA) has formally informed the Philippine Exporters Confederation, Inc. (PHILEXPORT) of the approval of the 16% cargo handling tariff hike at the Manila South Harbor and Manila International Container Terminal (MICT) through a letter addressed to PHILEXPORT president Sergio R. Ortiz-Luis Jr.
PPA manager for commercial services Mark Jon Palomar sent the letter dated June 7 in response to the May 15, 2024 letter of Ortiz-Luis petitioning the port authority to defer the cargo handling tariff hike until the export industry has recovered from unstable market conditions.
Palomar informed the export association’s leader that the PPA board of directors has given its nod to the proposed increase.
“… the PPA Board of Directors during its regular meeting on May 28, 2024 approved the 16% upward cargo handling tariff increase at the Manila South Harbor and MICT based on the Consumer Price Index adjustment factor from year 2020 to 2023 considering the relevant provision of the Terminal Operators’ (ATI and ICTSI) Contract with the Authority,” his letter read.
It said the upward adjustment will be executed in two tranches. The first tranche will see a 10% increase in cargo handling tariff implemented “not earlier than August 5, 2024.”
The second is the 6% raise “to be effective six (6) months after the effectivity of the first tranche.”
The Export Development Council and PHILEXPORT have long been opposing any cargo handling rate increases at Philippine ports. They point out that PPA has a share in cargo handling revenues generated by cargo-handling contractors and port-related service operators. Thus, in their view, the approval of any cargo handling tariff hike constitutes a “conflict of interest” as the PPA, being the regulator, also benefits from its own regulation, giving the agency the incentive to increase the rate to improve its financial health.
The looming cargo handling tariff increase comes on the heels of the expansion in storage charges for foreign containerized cargoes at all PPA ports in January 2024. Trade groups including PHILEXPORT had also opposed the increase of 32%, noting it was too high and would hurt the economy and the stakeholders already facing inflation and a weak global economy.
Manila South Harbor is operated by Asian Terminals Incorporated (ATI) and MICT by International Container Terminal Services Inc. (ICTSI).
