PPA lowers targets, expects ‘challenging’ year
THE Philippine Ports Authority (PPA) has tempered its growth targets this year, expecting a “challenging 2017” amid persistent volatility in the peso and reduced volume expected from miners.
The port regulator said yesterday that it now anticipates growth to be “nominal this year” from the previous year’s exponential growth.
“Last year was a great year for the agency as we were able to post significant figures in terms of cargo volume and revenues. This year, however, will be different as we anticipate ( growth) to be nominal due to several developments particularly in the mining industry, which has been one of our growth areas the past couple of years,” PPA General Manager Jay Daniel R. Santiago was quoted as saying,
“Based on our review, almost all our business aspects have already reduced targets and budgets for 2017 ranging from the original 20% to only 3%,” he added.
Among the ports expected to be “hard- hit” by current issues clouding the Philippine mining industry include the ports under the Port Management Off ices of Surigao, Nasipit, Palawan, Batangas, Manila, as well as those in Northern Luzon since these ports handle the bulk of the shipments from the mining firms like nickel, manganese, smelted copper, and refined copper including pumice, marble, silica sand as well as iron ore, chromium, silver, and zinc.
In Surigao alone, PPA said it broke past a half billion pesos in annual revenues for the first time in more than three decades anchored on the increased volume in the exportation of mineral products at private mining ports, along with longer port stays and increased vessel frequency.
“Nonetheless, PPA will remain resilient and committed to carry out its mandate of better connectivity and service amidst these developments,” Mr. Santiago said.
PPA noted that the revised Corporate Operating Budget (COB) of the PPA this year was reduced to P14.59 billion which is only 2% higher than the 2016 COB wherein the biggest reduction are done in Port Dues, Berthing, Anchorage, Arrastre/ Stevedoring, Pilotage, Wharfage for export, roll-on, roll-off (RoRo) fees as well as non-traditional income sources.
Revised Operating Expenses, on the other hand, ballooned to P16.22 billion this year from only P9.33 billion last year while total capital expenditure increased to P7.42 billion this year compared to the P3.50 billion in 2016 in order to implement several port projects that include the modernization of Mindanao and Visayas ports like Iloilo, Gen. Santos, Cagayan de Oro and Zamboanga, improvement of all passenger terminal buildings, repair and maintenance projects and the implementation of 14 other capital expenditure projects.
Total Budgetary Outlays for the agency this year are also pegged at P23.64 billion.
The peso has been repeatedly hitting 10-year low trading in the vicinity of P50 against the dollar amid both overseas and local drivers including rate hike expectations in the world’s largest economy and political developments here.
Meanwhile, the mining sector has been under pressure after the government appointed a staunch anti-mining advocate to head the Department of Environment and Natural Resources, who recently ordered to shut more than half the country’s metal mines.
Last year, the PPA posted a P6.159 billion net profit, beating the target by 165% or P3.836 billion. The result was also up 8% against the P5.705 billion registered in 2015 driven by increases in Ro- Ro fees, berthing fees and vessel lay-up fees.
“While we expect this condition to be temporary, the authority is bracing for a challenging 2017,” Mr. Santiago said.
PPA has reported that the volume of cargo passing through the country’s ports rose 12% in 2016 to 249.567 million metric tons mainly due to increased trade associated with the growing economy.
Increases in cargo volume were observed at the Manila International Container Terminal and Manila South Harbor for international cargo, North Harbor for domestic cargo as well as Cagayan de Oro, Davao, Iloilo, and Zamboanga.