The port of July

Yehey! This July, the customs bureau promised to release import shipments in five hours, as against the long wait of five days at present, because new Customs Commissioner Nicanor Faeldon wants to avoid another port congestion.

But even as Faeldon spoke to media, the BOC itself was still waging a war against the Philippine Ports Authority over the newly modernized North Harbor.

On the surface, it looks like a tussle between two state agencies, with BOC wanting to open—finally—the North Harbor to “international” cargo and PPA insisting on limiting it to “domestic” cargo.

The truth is that the two agencies are just caught in a bloody proxy war.

On one hand are existing contractors, the so-called duopoly of the International Container Terminal Services Inc., or ICTSI, and the Asian Terminals Inc., or ATI; and, on the other, Manila North Harbour Ports Inc.

ICTSI happens to be the original banner company of gaming magnate Enrique “Ricky” Razon. ATI, meanwhile, is now controlled by Eusebio Tanco, who has also been buying up educational and training institutions.

Behind MNHPI of course is the aggressive San Miguel group, headed by vice chair Ramon Ang.

Both the government and the private sectors have railed against the dominance of ICTSI and ATI over international cargo in the past 20 years or so.

The situation escaped scrutiny even during the controversial port congestion last year, which wrongly blamed on the truck ban imposed by the Manila city government and the “delays” in BOC processing of import shipments.

Like it or not, as the business community pointed out, the volume of shipments at the Manila port kept on growing in the past years, and not only did it increase consistently, but it also increased by leaps and bounds.

According to reports by the London-based Financial Times, for instance, the volume of container shipments at the port increased by more than 18 percent in 2015, and should grow even faster this year.

Experts agree that to maintain efficiency, the port should operate at some 75 percent of its capacity.

There were times, however, when international volume at the Manila port (i.e. the areas of ICTSI and ATI) hit 90 percent of capacity, meaning, the port became too crowded even for the day-to-day movement of containers.

And so last year, the Aquino (Part II) administration pushed for the passage of RA 10668, with its impossible title “An Act Allowing Foreign Vessels To Transport And Co-Load Foreign Cargoes For Domestic Transshipment And For Other Purposes.”

Also nicknamed “Foreign Ships Co-Loading Act,” the new law actually just amended the rather restrictive old cabotage law in the country by opening up all ports to international cargo.

The new law thus aimed to dismantle the control of ICTSI and ATI over international cargo at the Manila port, allowing a third operator, the MNHPI, to service import and export shipments as well.

To implement the port liberalization law, the BOC issued orders allowing foreign vessels to unload and load at the North Harbor.

Surprise—the PPA also issued orders, but this time they were to block the BOC orders, saying the new law did not apply to the North Harbor, because operator MNHPI had a contract with PPA to limit its business to “domestic” cargo.

The BOC insisted that it had the legal backing of several departments that formulated the rules to implement the new law.

Those were the Department of Trade and Industry, the Department of Finance, the Department of Justice, and the Department of Transportation and Communications, which also happened to be supervising department of the PPA.

In fact, the group that wrote the rules included the PPA, although from what I gathered, the temporary head of the PPA issued those orders without consulting other members of the PPA board.

On grounds that the BOC orders violated the contract between PPA and MNHPI, the PPA thus prohibited port authorities and shipping companies from using the North Harbor.

Word went around that one big foreign firm was set to transfer to the North Harbor, but because of the PPA threat, it decided to stay where it was.

Now it would have been an entirely differently story if, instead of using a lame excuse called “contract,” the PPA questioned the technical capability of the North Harbor to handle international cargo.

As things stood, the MNHPI reportedly lined up some P15 billion in fresh investments in its operations at the North Harbor, and so far it already invested at least P9 billion, equipping itself with six brand new cranes, purchasing computer software technology to allow companies to monitor their shipments in real time.

The North Harbor has in fact become one of the most modern port facilities in the country, and the PPA could stop its operating as an “international” port only because its OIC insisted that one old “contract” trumped the new law.

Now, the London-based Financial Times reported that the congestion at the Manila port in 2015 was only eased by some stopgap measures, such as cargo truck queuing system and the BOC’s trying to hurry up its processing.

There—it simply meant that the systems overhaul planned by the new BOC chief Faeldon could only do so much.

For based on the findings of the FT Confidential Service, the research arm of the foreign publication, the Manila port would suffer an even worse logjam in two years.