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Freeman Cebu Business

PCSA seeks government help to recover hefty losses

Ehda M. Dagooc - The Freeman

CEBU, Philippines —  The Philippine Coastwise Shipping Association Inc., (PCSA) is seeking government attention to help them recover multi-billion-peso losses they incurred since the COVID-19 outbreak.

“Our shipping industry, especially those that are into the passenger business, are really affected. In the case of roll-on roll-off vessels they earn about 40 percent of their revenues from passengers and now they can’t even have five percent of that,” said PCSA chairman Lucio E. Lim Jr., in an interview via zoom.

According to Lim, the local shipping industry is already losing billions of pesos since the outbreak last year, crippling both passenger and cargo volumes.

Nevertheless, shipping operators are hoping that this should pick up by summer.However, he said another year of similar situation could already mean a much difficult business, saying “it would be very difficult for the industry to recover.”

While cargoes have been sustaining the shipping business for now, Lim on the other hand reported that its movement has been down by 10 to 20 percent from pre-Covid performance.

Lim, who owns the LITE Shipping said the players have been left to survive on their own amid the onslaught of the pandemic.

“There has been practically no support that was given to the shipping sector. If there was, it was “only little” and not enough to provide relief for the entire industry,” he said.

The Bayanihan II has set aside some P9.5 billion for the recovery programs of the Department of Transportation. Of that total, P2.6 billion was set aside for assistance to the transportation industry. This aid is applicable to all Philippine-registered ships operating in the domestic trade and calling at government ports under the jurisdiction of the Philippine Ports Authority (PPA), according to Memorandum Circular 42 issued by PPA general manager Jay Daniel Santiago on Nov. 26, 2020.

The funds that DoTr shall transfer to PPA are not in the form of subsidy to PPA’s operations but correspond to DoTr’s budget under Bayanihan Act II in the amount of P250 million, which shall be treated as financial assistance to be utilized in subsidizing the fees being collected from domestic shipping owners, specifically, dockage (domestic) and lay-up fee (domestic),” according to the circular.

Of this amount, the PCSA said the Cebu Ports Authority extended P25 million which is only good for a limited period of time.

Lim further explained that the pandemic crisis “many of our vessels have been laid up. Some of our big passenger vessels, we chose to just let them be idled, on berth. So, we asked the PPA and CPA to give us free parking, similar to what the airlines got.

In the case of the shipping industry, they limited it only to that amount, P240 million nationwide, when there are more ships than planes,” he stressed.

Besides the free parking fee, the group has also asked the government to waive the annual tonnage fees, which the Maritime Industry Authority is currently studying. They also seek for extension for free dry-docking since most vessels were not utilized.

“Our government requires to dry dock vessels every two years and because currently many of our vessels are on standby they shouldn’t be strict about this,” said Lim adding that despite these challenges the local shipping industry is anticipating full recovery early next year, but this will depend on the rollout of the vaccination and the containment of the delta variant cases in the country.

“Our services are still needed by the people. You can’t move without the ship. We are hoping for a turnaround next year,” Lim added.

The PCSA is composed of members formerly from the Philippine Roll-On Roll-Off (Roro) Operators Association, Visayan Association of Ferry Boat and Coastwise Shipowners Operators and United Trampers Association of the Philippines.

Lim said that while the shipping operators understood the government’s limited funds for monetary dole-out to shippers or financial incentives, it would be good to bend from regulatory policies to make it easier for shipping companies to operate in difficult times.

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