GMs Message for the MARLAW-PORTCALLS Conference

February 24, 2017

Maritime Law Association of the Philippines President Atty. Dennis R.

Gorecho, Board of Trustees Chairman Keith Richard M. Pioquinto, other
distinguished officers of MARLAW, guests, ladies and gentlemen

It is an honor to be invited as one of the speakers of this conference. I

consider this occasion as a welcome opportunity to touch base with our
important partners of the maritime industry and give updates on PPAs
programs that are expected to introduce significant positive changes in the
way PPA delivers its services.

The PPA recognizes the important role of MARLAW and of our media
partner, PortCalls, whose advocacy is the promotion and advancement of
various players in the Philippine maritime industry. Education and
information dissemination are potent ways of increasing awareness, most
especially now that we, in the PPA are focusing on exploring new markets
and enticing entry of foreign trade to further increase foreign and domestic
trade.

Through the ports alone, cargo throughput in 2016 posted a record high
of 249.994 mmt or some 23.322 mmt higher than the 2015 volume of 223.672
mmt. Foreign cargoes accounted for 151.669 mmt or an increase of 12.66%
versus the 134.621 mmt handled in 2015 while domestic cargoes contributed
95.326mmt from 89.051 mmt or an improvement of 7%.

Container volume, meanwhile, also posted positive figures rising 9.53%

to 6.420 million twenty-foot equivalent units (TEUs) from 5.862 million TEUs
handled in 2015. Foreign containers inch-up 7.98% to 3.760 million TEUs
while domestic boxes rose 11.79% to 2.660 million TEUs for the period in
review. Total import boxes is at 1.915 million TEUs while Export containers is
at 1.845 million TEUs wherein both posted increases of 10.19% and 5.77%,
respectively.

To keep up with the growing trade and consistent with its vision, PPA
has commenced the upgrading of the status of the ports of Iloilo, Cagayan de
Oro, Zamboanga, General Santos and Davao to world-class standards, by
replicating in these ports the facilities that are now present in Manila-based
ports and Batangas. It may interest you to know that as of the end of 2016,
civil works for the wharf to be installed with crane-rail are 65%, 50% and 32%
complete at the Ports of Iloilo, General Santos and Zamboanga, respectively.
The expansion of the back-up area and wharf extension at the Port of
Cagayan de Oro, on the other hand, are also underway.

In the case of the Davao-Sasa Port, its development through PPP as

conceived by the DOTr commissioned Transaction Advisor appears to be
admittedly ambitious when viewed from the magnitude of investment and
scale of development being proposed. Inarguably, Davao-Sasa remains as
one of the most important ports in Mindanao and PPA recognizes the
urgency to improve the existing facilities and services thereat to serve better
the ports clients. Hence, the existing direction is to review the development
requirements of the port taking into consideration the other players in the
Davao Gulf vis--vis the market being served. PPA intends to keep Davao-
Sasa as a government-operated port but it does not also rule out the
possibility of developing, operating and managing it in partnership with the
private sector.

The establishment of the ASEAN Economic Community (AEC) is

another significant development which prompted PPA to introduce
breakthrough changes in its policies particularly, among others, in the areas
of streamlining of its requirements, more intensive deployment of technology-
driven processes to improve the delivery of its services and introduce reforms
in the modality of delivering port services and exacting fees. The introduction
of reforms is imperative against the backdrop of ASEAN economic integration
for PPA to remain competitive in its facilities, processes, services and
manpower skills and be able to take advantage of the immense opportunities
that a single ASEAN Economic Community would offer. One of the major
policy reforms that PPA is introducing is the Terminal Management and
Service Policy.

Under this policy, PPA will concession out the management and
operation of terminals through transparent bidding. The scope of investment
sharing between PPA and the Port Terminal Management Operator may be a
combination of some or all the services at the ports. PPA is presently
conducting public consultation while formulating the terms of reference that
will govern the procurement of the Port Terminal Management Operator and
the delineation of responsibilities between the latter and PPA under each
investment sharing scheme. This new policy is expected to encourage the
level of investment in infrastructure, equipment and support systems that can
drive huge improvement in efficiency and productivity of Philippine ports
which, sadly, are lagging behind its neighbors in the region.

PPA continues to make significant headway in the construction,

rehabilitation and upgrading of Ro-Ro ports in support of the governments
initiative to connect the countrys many islands. We are committed to
continue building more Ro-Ro ramps in various ports where they are needed.
We are happy to note the findings of independent studies that the countrys
Ro-Ro ports have been able to reduce cargo spillage by more than 50% and
logistics cost from Luzon to Mindanao and vice versa by at least 30%.

Within the Brunei-Indonesia-Malaysia-Philippines East Asian Growth

Area (BIMP-EAGA), Indonesia and the Philippines are finalizing some details
of the Ro-Ro route, i.e. Davao/General Santos and Bitung, that is set to be
operational this April and is meant to strengthen trade relations between the
two neighboring countries and serve as the springboard for future links
among the other member nations. The ASEAN Ro-Ro is not only seen as a
means of promoting trade but cruise-tourism as well.

We are happy to note Star Cruises announcement making Manila as

one of the homeports of one of its premier cruise ships for families which is
Superstar Virgo. As home port, Manila will not only be the start and end of
Superstar Virgos Manila-Laoag-Kaohsiung-Hong Kong route. It also puts
Manila on the Asian cruising map currently dominated by Singapore,
Malaysia, and Thailand, followed by Hong Kong, China, and Taiwan.

Meanwhile, the Hong Kong Tourism Board (HKTB) has released a

cruise industry study that identifies Boracay, Manila and Puerto Princesa as
among the 21 ports within 6-7 cruise days from Hong Kong that will likely be
part of mainstream cruise itineraries in Asia. The Department of Tourism
(DOT) listed eight ports as the countrys top international hubs for cruise
liners, namely, the ports of Davao, Bohol (Tagbilaran), Boracay, Cebu, Metro
Manila, Puerto Princesa, Subic, and Zamboanga. PPA is extending the
necessary support to the DOTs cruise-tourism program.

To give flesh to the good governance thrust of the government, PPA

has embarked on the simplification of business processes mainly in the area
of reducing the documentary requirements and processing time in its frontline
transactions involving the Applications for Permit to Operate (PTO) Ancillary
Services, Entrance/Clearance of Vessels; Entry/Withdrawal of Cargo from
Government Ports; and Access Regulation for Trucks, Port Users and
Pedestrians. PPA is rationalizing the documentary requirements from an
average of eight documents to only two documents, thus, significantly
trimming down processing time and cost while at the same time reducing the
number of signatories to three (3) or less. Electronic submission of
applications for these permits has also been made available as an option.

Finally, PPA continues to support the implementation of the Truck

Appointment and Booking System (TABS) to ensure that vehicles delivering
and/or withdrawing cargoes from Manila-based ports do not contribute to
congestion along the streets of Metro Manila such as the case in 2014 during
the Manila truck ban. We continue to encourage the private sector to
establish dry ports and inland container depots to help the government and
the economy manage effectively congestion. Towards this end, PPA
supports the governments joint project with the International Container
Terminal Services, Inc. (ICTSI) for the development of the Cavite Gateway
Terminal in Tanza, Cavite designed as a common user barges and Ro-Ro
vessels. This terminal can easily cater to the needs of the Cavite Export
Processing Zone and integrate operations with other Luzon-based port
facilities. The first phase of the project can support 115,000 TEUs per annum
equivalent to about 140,000 less trucks per year plying along city roads.

The level of maritime-related activities can be a key indicator of the

countrys economic health, the Philippines being archipelagic. Hence, the
objective of MARLAW of advancing the interests of Philippine Maritime
Industry players through various fora like this is truly noteworthy. We hope
that, in more ways than one, we have contributed towards the attainment of
your goal.

Congratulations and thank you for your attention.