The 109th Maritime Breakfast Forum (MBF 109) was hosted by the Cebu Ports Authority (CPA) and held at the CPA in Cebu City on 11 February 2016.

Commo. Carlos L. Agustin (Ret), President of the Maritime League, called the forum to order at 1:00pm. He announced that instead of only one presentation from the CPA, there will be two other presentations, namely, “Supply Chain Management in the Philippines: A Maritime Challenge,” and “Development Plan for Mandaue (North RORO Terminal) and Talisay (South RORO Terminal).” He also thanked the Cebu Port Authority for hosting the 109th Maritime League Forum. VADM Edmund C. Tan (Ret), Vice Chairman of the Cebu Port Commission and General Manager of the CPA, stated that it has been the third time that CPA had hosted this forum.

Shipping Issues in Central Philippines by Dir. Nanette V. Dinopol, MARINA Region 7.

Dir. Dinopol’s report was what MARINA Administrator Maximo Mejia, Jr. presented in one of the Congressional hearings at the House Committee on Transport, and was given instructions to present in this forum. Dir then proceeded with the RORO Modernization Program that was created pursuant to Executive Order 170 and 170-A Promoting Private Sector Participation and Investment in the Development and Operation of the Road Roll-on/Roll-off Terminal System, and cited its objectives.

• The JICA Study released in 2009 on the RORO Modernization Program reports:
• Only second-hand vessels were purchased;
• No private investment in newly built RORO ships;
• Inadequacy in program scheme to modernize domestic shipping;
• Dependence on supply of second hand-ROROs;
• Escalation of accidents involving second-hand ships;
• Investments at a stand still in RORO modernization. Dir. Dinopol stated there is a total of 221 RORO ships servicing 140 RORO routes in the entire country as of August 2015.

Over the years, Batangas, Calapan, and Mindoro Oriental attracted the most passengers. Next highest deployment of RORO ships is Matnog, Sorsogon and Samar. The major RORO industry players like Montenegro Shipping Lines has the highest number of ships in operation; 2Go Shipping is the largest shipping company; followed by Cokaliong Shipping Lines. MARINA Memorandum Circular 104 was also issued regarding the construction, conversion, modification, alteration of registered ships 2015-07 which policy aims to ensure that all ship construction and modification in the Philippines should be constructed accordingly, and shall verify its structural strength and integrity not only on ships locally constructed but also those constructed abroad and intended to be registered in the Philippines. Prior to the approval of the authority to import, the ship owner will submit their vessel plans. MARINA MC 2015-03 categorizes the navigational areas in the Philippines. Mostly affected by this circular are the motor bancas since their size should be operating only in the protected waters generally enclosed by land. Further, MARINA MC 2015-04 implementing EO 909 had encouraging incentives such as:

1. Protection for investment – applicants and those granted pioneering status shall be given a period of six years by imposing a moratorium of development of additional vessels, or not allowing any vessel to ply in the applied route. Region 7 already issued pioneer status to IACS ships;
2. Priorty in the issuance of Certificate of Public Convenience;
3. Payment of Fees and Charges – those granted Pioneer Status shall only be charged 50% of regular fees in all applications and renewals of ship documents;
4. Drydocking of vessels; and
5. Provision for special ramps shall be made available to IACS brand new or newly constructed ships subject to existing policies of the Port Authority.

Dir. Dinopol also discussed circulars and regulations which are ongoing and for submission to the MARINA Board. Finally, Dir Dinopol identified the issues affecting the shipping industry in the Visayas:

• Phase out of wooden hulled ships – there is opposition from the wooden hulled owners, routes served solely by said ships;
• downward adjustment of shipping rates due to decreasing fuel prices – though some shipping owners already reduced passenger rates;
• congestion resulting in the repair of the Mactan Bridge – there was a meeting with the LCT owners to address this; issue special permits to the shipping owners.

Reactions: Cdr. Neil Azcuna of PCG Central Visayas welcomed the plan of modernization of the RORO System in the Central Visayas and will be very advantageous to the PCG. Further, he added that the Vessel Traffic Monitoring System (VTMS) project by JICA, which is ongoing, would be helpful in the enhancement of the safety in navigation along the Mactan Cebu Channel.

Mr. George Cottrell of Colorado Shipyard commented that the shipbuilding industry has the capacity to build ships. Dir. Dinopol replied that capacity and capability may be there but the problem is that the supply and cost of raw materials is no longer competitive. Shipowners find it cheaper to acquire ships abroad. He also asked about the issue on incentives that can probably be afforded to the shipbuilding industry.

Dir. Dinopol suggested that Commo. Agustin request the shipyard association to present their issues in the Maritime Forum next month. On the phase-out of the wooden-hulled ships, Dir. Dinopol said that the MC is now effective. MARINA is now evaluating on the phase-out of wooden-hulled ships carrying passengers. Commo. dela Cruz asked about the shipping issues affecting Central Visayas since the report generally discussed about the MARINA as a whole. The chair answered that it was discussed in the latter part of Dir. Dinopol’s report.

Mr. Herminio Esguerra suggested that a meeting with MARINA and the domestic shipbuilding stakeholders be held to discuss the shipbuilding issues, concerns and current status. Commo Agustin answered that it will probably be calendared in the next meeting on March 18, 2016, or better yet, a week before. Cdr. Sheilon Cadaoas suggested that there is a need to update existing shipping charts and the need for upscale shipping charts of the new ports for the safety of the navigation. NAMRIA is mandated to survey the country’s archipelagic sealanes.

Cdr. Cadaoas is encouraging PPA, CPA and MARINA to identify priority ports and harbors for updating of nautical charts. In 2015, NAMRIA and PPA signed a MOA that results of pre and post dredging operations being conducted by PPA shall be used by NAMRIA.

Commo. Agustin added that proper plotting of references is very important and it should be reported to NAMRIA. A major problem of NAMRIA is the regular updating of the existing charts.

Supply Chain Management in the Philippines: A Maritime Challenge.

Capt. Rodien Paca described supply chain management in our country as an intermodal connectivity. Supply chain and movement of cargoes is dependent on ships, port and logistics, adding that cargo can never be transported from one island to another without ships. Shipping is an integral part of the whole supply chain. Shipping is just part and parcel of the whole supply chain, yet very vital. Other factors affecting the supply chain are safety, costs, and performance. Commo. Agustin appreciated his report and invited Capt. Paca to join the Maritime League.

Development Plan for Mandaue (North RORO Terminal) and Talisay (South RORO Terminal)

Mr. Paul Rodriguez presented the RORO System in the country and started with the provinces in Luzon, and later, the other provinces in the Visayas and Mindanao.

In Cebu, the RORO sector industry is also gearing towards further development. The Dept of Transportation and Communications had been making efforts to promote and upgrade the maritime transport. In 2003, the Strong Nautical Highway became a reality when EO 170 “Development of the Three Nautical Highways: Eastern, Central and Western Nautical Highways” was issued. Mr. Rodriguez also discussed the benefits of the RORO system, namely: enhanced connectivity; increased passenger and cargo volume; reduced transport cost; development of local areas; and creation of better business opportunities in the countryside.

Mr. Rodriguez also showed the list of different RORO terminals, port constructions and backup areas in Luzon, Visayas, and Mindanao.

In policy improvements, an executive order is in the final stage with the inclusion of CHARO or chassis-mounted containers, as part of the definition of RORO vessel.

In Cebu, the Philippine RORO group, headed by Mr. Rodriguez, initiated to develop a RORO Terminal in the North, which is the Ouano wharf in Mandaue, and another in the South, which is the Talisay City Port. Different views were shown on the 2 RORO terminals. Asian Marine Terminal Corp, a terminal operator in the country, also headed by Mr. Rodriguez, reported that it has the largest gross tonnage that consists mainly of RORO vessels, though not brand-new, but IACS classed vessels from Europe. He also showed images of their fleet of vessels.

Commo. Agustin commented that the plans on RORO terminal development would help decongest road traffic.

Cdr. Paculba shared that this was her first time to attend the Maritime Forum, and further stated that a part of her research was related to the maritime security of RORO ports in our country, and cited that our country having a low rank of #108 among 139 economies in the world is also a subject of her study.

Commo. Agustin believes that it will even get worse with the incidents of the “Laglag Bala” which has gotten to be very famous internationally. Commo Agustin suggested that the MBF could probably ask the Office of the Transportation Security (OTS) for an update.

Developing a National Transportation Framework

Commo. Agustin asked the maritime agencies concerned if their agencies have prepared legislation regarding the matter. Dir Dinopol said that MARINA is making plans in coordination with the PPA. AGM Hector Miole added that in the past 30 years that he has been with PPA, he had seen three National Transportation Planning Documents under different administrations. In the present administration, there are plans but due to many interventions along the way, and realignments of priorities including different changes in the transport agencies, another transport plan may be needed.

Mr. Rodriguez provided an update on the last meeting of the House Committee on Transport. Being one of the members of the Technical Working Group, he opined that the road map for the improvement of the maritime sector is affected by the integration of the stakeholders, as well as the alignment of the programs of all agencies.

Commo. Agustin asked whether it was the MARINA version of the Cabotage Law that was acceptable to the shipping and maritime sector, or the Cabotage Law approved by Congress. Mr. Rodriguez said the Cabotage Law was partially lifted and is looking forward to an expanded version. Commo. Agustin suggested that MARINA provide us an update. AGM Miole asked Mr. Rodriguez if he was aware of the ongoing IRR study on the lifting of the Cabotage Law handled by the Bureau of Customs under Commissioner Lina. He said the stakeholders should participate and be consulted in the study. AGM Miole volunteered to do the inquiry, and suggested that the national security implications of lifting the Cabotage Law should be presented. Commo. Agustin suggested the Naval Strategic Studies could do the research and the presentation.

Update on the West Philippine Sea

Cdr. Weniel Azcuna (PCG) updated that the Philippine Coast Guard is regularly submitting reports to the Department of Foreign Affairs on any activities or movements in the West Philippine Sea, as well as the deployment of coast guard assets in the area. Commo Edwin Mackay of NAVFORCEN said that on Nov 2015, together with Task Force Malampaya, they took pictures of the islands entered by the Chinese. USEC Vicente Agdamag of NSC updated that in October 2015, a destroyer of the US Navy patrolled the vicinity of Spratly Islands. In January 2016, another destroyer of the US Navy patrolled near the Paracel Islands. This shows that the US, Australia and Japan, will not allow the Chinese to control the SCS.

Hopefully, Philippine Armed Forces will be able to join in patrolling the South China Sea with the coming of the PCG ships donated by Japan, and BFAR vessels will also help in the patrol. Mr. Victor Smith, Naval Attaché of the US Embassy, said that he could only share that the US is supporting the country and affirms what the other government agencies have reported. VADM Jose Alano of the National Coast Watch Council shared that EO 197 which designates the DOTC secretary as the civil authority to address the issues and problems on ship and port security. There are different agencies holding specific mandates but are inter-related in the matter of maritime security and environmental safety, e.g., the PCG, PPA, CPA, MARINA, and the OTS as the office to assist DOTC in implementing the department orders.

Hydrographic Surveys

Cdr. Sheilon Cadaoas of the National Mapping and Resource Information Authority (NAMRIA) presented an update on the agency’s accomplished projects for 2015 and programmed projects for 2016. VADM Alano suggested that the MBF could probably invite the agency that organized the recent Philippine Summit to give an update.

Commo. Dela Cruz called out for anybody who can probably help and assist the CPA on how to further improve the port operations. Commo. Agustin further provided GM Tan’s email address to the attendees (ectan80@hotmail.com) for any suggestions. Mr. Arthur said that Colorado Shipyard’s concern is that some vessels are parking at the north end of Cebu, which has affected 5-6 shipyards and ports, and sometimes the passage of vessels that are bound for Leyte. Thirty or more vessels are at anchorage at present, and those pumpboat people are preying upon these vessels. GM Tan replied that the VTMS would help in ensuring maritime security and vessel monitoring as well as marine environment. The Authority shall call the attention of the vessel owners and will require their vessels to move out of the passage and entrances of the shipyards. Commo Agustin suggested that CPA coordinate with the PCG regarding these issues. Mr. Arthur also brought up the issue that DPWH awarded a contract on dredging but it was done inside the bay. It was suggested that Colorado Shipyard write to CPA and state their concerns, and CPA shall coordinate with DPWH. Also perhaps, we could invite DPWH in the next forum.

Commo. Agustin announced that the next issue of the Maritime Review Magazine would come out in early March 2016. Anyone who wishes to contribute to the magazine could submit to Commo. Mariano Sontillanosa.

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