International Container Terminal Services Inc. (ICTSI)
The country’s two major port operators are seeking 17 percent increase in cargo handling rates to partly bankroll over $3 billion in capital expenditures this year.
International Container Terminal Services Inc. (ICTSI) and Asian Terminal Inc. (ATI) filed their petition for rate hike two weeks ago before the Philippine Ports Authority, which conducted the first public hearing on Tuesday.
Paul Hamoy, president of the Philippine Institute for Supply Management and supply management head of SN Aboitiz Power Group, said that ICTSI justified its petition for rate hike saying it is embarking on a $3 billion expansion program this year while ATI is spending P700 million for its own expansion program.
Port users, however, have strongly appealed to these two port operators to defer their petition until next year in light of the current global financial crisis that witnessed sharp drop in the volume of trade.
“We acknowledge and we are grateful for these port operators to make logistics in the country efficient by continually improving their facilities, but today is not the right time,” Hamoy said.
Hamoy said that they understand that ICTSI and ATI have revenue targets to meet but this should not be at the expense of the private sector.
“For manufacturers, the 17 percent increase in cargo handling rates per container means a huge impact on our cost,” Hamoy said.
Hamoy pointed out that with the global financial crisis, the Purchasing Managers’ Index (PMI) has gone below 50 percent in the past months.
PMI is a gauge on new orders, production, employment, supplier deliveries and inventories and is a good indicator of the overall state of the economy and an effective tool for short term forecasting. A PMI reading above 50 percent indicates growth in manufacturing while a reading below 50 percent indicates contraction. February was lowest at 33.6.