The Philippines is an archipelago country and maritime transport plays a vital role in regional socio-economic development. Ports are very essential as these serve as gateway in towns, cities and provinces in transporting people and in trading goods and services.

The government has envisioned to implement the following:

• The Philippine Port System Strategy (PPOSS)

-Establishment of fats, economical, reliable and safe maritime transport network

-Formation of marine transport bases to support the regional society

• The Philippine Ports Authority (PPA) plans and programs

-Complete the modernization of at least ten (10) ports by 2010

-Improve the delivery of port services

-Reduce the costs of business transaction in the ports

-Put up RORO ramps module for Greater Maritime Access (GMA) ports

• The Philippine Fisheries Development Authority (PFDA) programs

-Regional Fish Ports Program – provision and operation of fish ports complexes in strategic fish landing centers nationwide

-Municipal Fish Ports Program – catering to post-harvest requirements of fishermen. Municipal fish ports will also act as satellite ports for the regional fish ports.

Market Opportunity

• 6% of logistics costs in the Philippines come form port services

• Logistics market value is expected to grow by an annual rate of 3-10% in the next 10 to 15 years

• Philippines shipping business is expanding

• Approximately 2 million TEUs in container traffic per year

Philippine Advantage

Natural Resources

• Philippines have different natural water forms such as bays, lakes, gulfs and straits where major ports can be built.

• Philippine archipelago is made up of 7,107 islands, a land area of almost 300,000 sq.kms. and around 17,500 km. coastline.

• Three prominent bodies of water surround the archipelago: the Pacific Ocean on the east, the South China Sea on the north and west and the Celebes Sea on the south.

• Blessed with excellent natural harbors for ports like Manila Bay and Subic Bay

• Excellent harbors with ports potentials are found in Ilocos, Pangasinan, Visayas and Mindanao

Support Infrastructure

• Nationwide road network projects linking the ports to production areas, markets and logistics terminals

• The Subic-Clark-Tarlac Expressway (SCTEX) – connection between the seaport in Subic and the Diosdado Macapagal International Airport (DMIA) in Clark

• The North Luzon Expressway (NLEX) – the 84 kilometers NLEX is one of the most modern infrastructure projects undertaken in the Philippines. It runs from Balintawak to Sta Ines, Pampanga with 15 exits and interchanges.

• The South-Luzon Expressway (SLEX) – the network of three expressways that connects Metro Manila with the provinces south of metropolis

• Southern Tagalog Arterial Road (also known as the STAR Tollway) – a four-lane 42km. expressway that extends from the SLEX to the province of Batangas

Human resources

• Manpower Requirements

-Senior Site Engineers (Civil/Mechanical/Electrical)

-Quay Crane Operators

-Mobile Harbor Crane / Forklift / Toploader Operators

-Heavy Duty Drivers / Electronic Technicians / Electrician (Heavy Equipment)

-Heavy Duty Mechanic / Welders / Other Skilled Workers

-Administrative Staff

• Availability

-517,427 total graduates in 2009

-63,919 graduates of various Engineering courses

• Quality

-competitive labor force (quality, cost and availability)

-world-class English language proficiency with capability for some Asian languages

-fast learning curve (needs only 6-8 weeks to learn technical skills)

-long tradition of excellence in the professions

-strong work ethics and customer orientation

-universal cultural adaptation

Other advantages

• Prevailing Port Tariffs are relatively competitive.

Contribution to the economy

• PPA’s gross revenue grew by a moderate 3.79% in 2007

• Gross revenue for 2007 reached US$ 130 million compared with US$ 125 million in 2006

Investment Opportunity

New Investments

• The Philippine government is encouraging private sector participation in port development and operations

• Implementation should be in accordance with port development plans to ensure integrated and efficient port system.

• Construction of seaports that will serve as gateways to different tourist destinations is also a priority tourism infrastructure project.

• Privatization of government-owned and operated ports is offered.

A. Projects Identified by Port Management Office (PMO):

1. Port District Office in Southern Mindanao:

Improvement /Expansion of Marco Port, Davao

Proposed Construction of the Port of Timaco, Cotabato

2. Port District Office of Southern Luzon

Development of RORO facility at Port of Pinamalayan, Oriental Mindoro

Development of RORO facility at Port of Looc, Lubang Island, Occidental Mindoro

B. For Privatization under the Road Roll-On / Roll-Off Transportation System (RRTS):

Port of Alaminos, Pangasinan

Port of Bolinao, Pangasinan

Port of Binabalian, Bolinao, Pangasinan

Pilar Wharf, Bolinao, Pangasinan

Port of Dagupan, Dagupan City

Damortis Satellite Port, Sto. Tomas, La Union

Government Support

Enabling laws/policies

• Presidential Decree No. 857 creating the Philippine ports Authority (PPA) to facilitate the implementation of an integral program for the planning, development, financing, operation and maintenance of ports or port districts for the entire country.

Financial support / guaranteed

• Built Operate Transfer (BOT) scheme through solicited or unsolicited proposal.

• Development Bank of the Philippines (DBP) Sustainable Logistics Development Program (SLDP).

• Eligible projects for funding are:

RORO port construction

investment in bulk-handling of agricultural commodities

cold chain facilities.

Philippine Ports Authority (PPA) Support Facilities

• Harbor Maintenance

• Dredging the harbors nationwide to the required depth through removal of silts is a regular function of the PPA.

• Repair and Maintenance of Port Facilities

• PPA undertakes the routine function of repairing and maintaining its ports facilities to restore them to their normal

Incentives

• Registration with BOI entitles the project to the following fiscal and non-fiscal incentives:

• 4-6 years Income Tax Holiday (ITH) for new projects

• Duty-free importation of capital equipment under E.O. 528.

• Additional deduction from taxable income for labor expense (cannot be simultaneously enjoyed with the ITH incentives).

• Additional deduction from taxable income for necessary and major infrastructure works (cannot be simultaneously enjoyed with the ITH incentives).

• Employment of foreign national

• Importation of consigned equipment for an unlimited period subject to the posting of re-export bond.

Cost of Doing Business

Salaries and Wages

• Monthly Salary Range

Engineers- US$ 833 to US$ 854

Skilled workers & Admin Staff – US$ 438 to US$ 625

Other workers – US$ 438 to US$ 458

• Taxes

30% corporate tax

All importations of capital equipment for the construction of any sea ports will be subjected to twelve percent (12%) value added tax (VAT)

Permits, Licenses and Other Requirements of PPA

• Permit to Construct Port

• Clearance to Develop a Private Port Facility