AIRCARGO FORWARDERS OF THE PHILS., INC (AFPI ... - FAPAA

AIRCARGO FORWARDERS OF THE PHILS., INC
(AFPI)
Philippines
Country Report
FOR THE
34 th EXECUTIVE COUNCIL MEETING
OF
THE FEDERATION OF ASIA PACIFIC AIR CARGO
ASSOCIATION
(FAPAA)
IN
HONG KONG
30 August – 1 September 2007

AFPI Address
Aircargo Forwarders of the Philippines, Inc.
Room 225 Skyfreight Building
NAIA Avenue, Parañaque City
Philippines
Tel : 632 – 853-0549 or 852-7180
Fax : 632- 853-1745
E-mail :
AFPI Secretariat
support@afpi.org.ph
Training & Development Center training@afpi.org.ph
Secretary General
secretary_general@afpi.org.ph
Contact Person:
Marivic C. Domondon
Secretary General

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AFPI – The Only National Air Cargo Association
The AFPI was organized in 1980. The only organization that the Civil
Aeronautics Board (CAB) has endorsed to the air freight forwarders.
AFPI – Membership
At the time of formation, AFPI had 11 pioneer members. Today, AFPI has grown
to 145 members.
IATA MEMBERS
IATA - 80 Non IATA - 65
AFPI – Board of Directors and Officers
The governing body of this association consists of eleven (11) elected Directors,
and from among them, they elect the Executive Officers which are the President,
1 st Vice President, 2 nd Vice President, Secretary, Treasurer, Press Relation
Officer, Sergeant-at-Arms and four (4) other Directors. Election is held once
every two years.
The immediate past President is automatically designated as Chairman of the
Board, and he lends experience, expertise and assistance to the Board and the
Officers of the Association.
The immediate past Chairman of the Board is automatically designated as
Chairman Emeritus, and like the Chairman of the Board, lends his experience,
expertise and assistance to the Board and the Officers of the Association.
AFPI – Committees
Internal Affairs
Membership
Finance
Constitution & By-laws
Ethics and Standards

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Training
Legal Director
External Affairs
Government Affairs and Airlines Affairs
Communications
Ways & Means
Secretary General
Council of Past President
AFPI – 2006 – 2008 Elected Officers & Directors
Chairman Emeritus Mr. Eduardo representing Skyfreight Forwarders
De Guzman
Chairman Ms. Cynthia R. Tsui representing Asia Overseas
Transport Co., Inc.
President Mr. Jaime A. Roxas representing Jugro Transport
International Phils.,
Inc.
1 st Vice President Mr. Roy A. Raralio representing ABX Pan Globe
Logistics, Inc.
2 nd Vice President Ms. Rosemary N. Su representing UTI (Global
Logistics) Inc.
Treasurer
Mr. Gregg S. Sebastian representing Hankyu Int’l
Transport Phils., Inc.
Secretary Ms. Antoinette Reyes representing Eagle Express lines
Inc.
P.R.O. Ms. Mariz Regis representing Airspeed Int’l Corp.
Sergeant-at-Arms Mr. Dominador De representing Sky land Brokerage
Guzman
Inc.

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Directors Ms. Ramon De Leon representing Pac-Atlantic Lines
(Phils.), Inc.
Mr. Dexter Yu representing All Transport
Network
Mr. Joey Tongson representing Agility Int’l Logistics
Inc.
Mr. Leo Tagle representing Yusen Air & Sea
Service Phils., Inc.
Legal Director Atty. Romeo Sto Tomas
AFPI OBJECTIVES:
AFPI MISSION:
• To encourage cooperation, strengthen
camaraderie among its members.
• To provide activities that will boost Global
competitiveness.
• To promote Professional Development.
• To advocate and up hold Corporate
Governance and business ethics.
• To address promptly the issues and concerns
of the industry.
To provide the Aircargo Logistics Industry with Leadership and
Direction in enhancing its competency and Global competitiveness.
AFPI VISION:
To be the most Professional, Progressive, Purpose Driven Logistics
Association in Asia.

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Network
In pursuance of its commitment to perform a strategic role in the airfreight
industry, AFPI is working towards having a stronger voice in the nation’s
economic affairs. It is determined to achieve this through the expansion of its
organization’s membership list to include the airfreight forwarders in the major
cities of the country. One of its successful endeavors in this direction is the
organization of AFPI Cebu Chapter.
AFPI Projects / Activities
In its 27 th
industry:
years of existence, AFPI has effected positive changes in the airfreight
Helps promote and facilitate regional and international trade
Provides a chain of logistics support to its members like warehousing, customs
clearance, door-to-door delivery, chartering, statistics forecast and market
research, distribution, consolidation, conferences and exhibitions, information
technology and affiliation with international bodies and organizations involved in
air transportation.
Maintains a Training and Development Center, organized to provide the
personnel of all member companies of AFPI with training and development
programs / services
AFPI – Membership in International Organizations
Federation of Asia Pacific Aircargo Association (FAPAA)
The International Federation of Freight Forwarders Association (FIATA)
Asean Federation of Forwarders Association (AFFA)

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Membership and Alliances – National Associations
Port Users Confederation (PUC)
Philippine International Seafreight Forwarders Association, Inc. (PISFA)
Federation of Accredited Customs Brokers and Forwarders of the Phils.,
Inc. (FACFOB)
Chamber of Customs Brokers, Inc. (CCBI)
Philippine Domestic Freight Forwarders Association (Phidoffa)
Ecozone Federation of Forwarders/Brokers and Truckers, Phils. (EFFORT
Phils.)
Federation of Forwarders’ Associations in the Phils., Inc. (FEDFAP)
Representing the Airfreight Industry with various Government
Agencies
Department of Transportation and Communications
Civil Aeronautics Administration
Metro Manila Development Authority
Philippine Economic Zone Authority
Bureau of Customs
AFPI TRAINING & DEVELOPMENT CENTER
(Please see separate attached report)

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RECENT ISSUES TACKLED:
MIAA ACCREDITATION:
There were several meetings held last year with regards to the clarification on
who may be granted accreditation and thus allowed access to the premises of the
airport. Finally the Manila International Airport Authority issued a Memorandum
Circular No. 06 dated April 10, 2007.
This Memorandum defines the policy and prescribes the guidelines for the
accreditation of individual customs brokers, customs brokerage companies /
corporations and cargo/freight forwarders at the Airport. It shall apply to licensed
and duly registered Professional Customs Brokers, Customs Brokerage companies
engaged in business activities at the Airport Complex.
This Memorandum Circular shall take effect fifteen days after its publication in a
newspaper for general circulation. Memorandum signed by General Manager
Alfonso G. Cusi.
NAIA CUSTOMS BONDED WAREHOUSE OPERATORS
COUNCIL (NCBWOC) EXPORT CHARGE OF PHP
0.68/KG.:
There was a petition from NCBWOC to initially impose export warehousing
charges of Php 0.68/kg. Several meetings were held on the petition wherein
government bodies and private stakeholders such as the Semiconductors and
Electronic Industries in the Philippines Inc. (SEIPI), the Export Development
Council, and investors in the Philippine Export Processing Zones participated.
Subsequently and with the active participation of then-President Cynthia R. Tsui,
the NCBWOC agreed not to implement the export warehousing and other related
fees, and instead file a petition with the Bureau of Customs to increase the Import
Service Charges.

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CASS NEUTRAL AIRWAY BILL (NAWB):
Last March 2006, there was a notice from IATA Philippines requesting all IATA
CASS agents to use the CASS Neutral Airway Bill (NAWB) for all transactions
under CASS with a cost of Php 12.50 per Neutral Airway bill.
Opposing the Notice as imposing additional financial burden to the airfreight
forwarders, the Aircargo Forwarders of the Philippines Inc. (AFPI) filed a petition
with the Civil Aeronautics Board (CAB), requiring airlines to provide FREE
NAWB’s to Freight Forwarders with an application for temporary restraining
order and preliminary injunction compelling airlines not to implement their
requirement that only NAWB are acceptable. The Association felt that to make
the cargo agents responsible for the cost of Air Waybill forms and the printing of
said documents and other ancillary charges is not fair and proper because said
document are the airlines’ form and not the document of the cargo agents.
Currently the case is still pending with the CAB since the AFPI is still waiting for
the formal reply from IATA CASS Phils. and the Board of Airline
Representatives.
KYOTO CONVENTION:
With the participation of AFPI in the Briefing-Workshop sponsored by the
Bureau of Customs, the Bureau of Customs was able to finalize the
steps to be undertaken in the implementation in the country of the Revised Kyoto
Convention, as well as the corrective measures to be made to existing procedures
to make them compliant with the provisions of the RKC. The steps, measures, as
well as the implementation of the RKC were then submitted to President Gloria
Macapagal Arroyo for finalization and implementation.
Upon adoption of state formalities acceding to the Revised Kyoto Convention, the
Philippines will form part of the global regime standardizing Customs formalities
and processes in tune with the current demands of international trade.

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CONTAINER SECURITY FEES:
By virtue of Executive Order no. 592 dated December 15, 2006, the Bureau of
Customs imposed upon import shipments the payment of Container Security Fee
(CSF) amounting to US$ 50.00 and US$ 25.00
for every 40-footer and 20-footer container, respectively. Upon strong and united
opposition by the Port Users Confederation, of which AFPI, PISFA and other
associations are members, the Bureau of Customs acceded to the demands of the
stakeholders and reduced the CSF to US$ 10.00 and US$ 5.00 per 40’ and 20’
respectively.
The CSF is the amount charged for every container of goods being imported to
recover the fees to purchase, operate and maintain the x-ray machines installed at
the Manila ports to scan shipments before release from the BOC.
INTERCOMMERCE NETWORK SERVICES, INC.:
The Bureau of Customs has issued an Administrative Order requiring the
electronic submission of advanced manifests prior to the arrival of shipment, In
line with the requirement, InterCommerce Network Services Inc., an eCommerce
Service company providing EDI, value added network services, application
development and systems integration solutions and services, proposed with the
AFPI to serve as its partner in the implementation of the BOC-required advanced
manifest when airfreight shipments are made to submit the said manifests. Under
the proposed arrangement, all airfreight forwarders needing to connect with the
BOC through InterCommerce, a Value Added Service Provider (VASP) which is
presently the only accredited VASP by the BOC, will first have to be endorsed by
AFPI, which in turn will serve as the payment center for the service charges in the
manifest submission.
Without AFPI’s endorsement, InterCommerce will not accept the lodging of
advanced manifest by an airfreight forwarder. For AFPI’s endorsement and
collection efforts, the Association will earn a share of the service fees.

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InterCommerce has also indicated to look into other collaborative arrangements
with AFPI or its members in identifying and developing value added services for
members or for its client shippers or consignees, such as advance manifest copy to
consignee, on-demand retrieval of manifest data per consignee, automated
validation of consignee’s import declaration against AWB/manifest reference
number, electronic billing and payment for shipping and other charges.
REPUBLIC ACT 9280 (The Customs Broker Act of 2004):
This law was passed in February of 2004, to professionalize Customs Brokerage,
but some provisions were inserted by unknown persons before signing into law by
the President of the Philippines. The inserted provisions contained, among others,
one which prohibited customs brokerage corporations from engaging in the
business of customs clearance, which has long been allowed as explicitly
contained in the Tariff and Customs Code of the Philippines.
Upon knowing that such provisions were included in the signed law, the Port
Users Confederation, which counts on AFPI as an active member, left no stone
unturned to prevent the implementation of the questioned provisions, among
which is to thwart the efforts of the individual customs brokers to prevent the
customs brokerage companies from being recognized by the Bureau of Customs
and transacting business with it. The success of the efforts resulted in the BOC
issuing a Customs Administrative Order explicitly allowing customs brokerage
companies to register with the BOC and to be allowed to transact business with
the Bureau.
The law was almost amended last June but for the failure by the House of
Representatives to muster a quorum in their last three (3) session days after the
amendments were passed in the Bicameral Hearing of the joint Senate and House
panels.
The effort to amend the law will be continued this August as the new Congress
and Senate continue their legislative work. Presently, two (2) House and one (1)
Senate Bills have been introduced.

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REVENUE MEMORANDUM CIRCULAR (RMC) NO. 35-
2006 OTHERWISE KNOWN AS RMC FOR FREIGHT
FORWARDERS:
The approval of the Bureau of Internal Revenue of Revenue Memorandum
Circular (RMC) No. 35-2006 otherwise known as the RMC for Freight
Forwarders last June 25, 2006 by then BIR Commissioner Jose Mario Buñag,
Freight Forwarders are allowed to declare a presumptive 5% commission for
VAT & EWT purposes. This protects the Freight Forwarder in declaring its actual
income earned per shipment which will give way to forum shopping on the part of
the client if the ACTUAL income will be shown on its billings. The Freight
Forwarders are just required to submit a reconciliation report to the Bureau of
Internal Revenue declaring its actual income earned and will only be liable for
taxes due thereon. Documentation requirements were also clarified on the said
RMC for the protection of the Freight Forwarders and the clients.
This RMC greatly helped the Freight Forwarding Industry in the Philippines as
the cost of exporting/importing goods in the Philippines is now competitive in the
world market. With this new ruling, the Freight Forwarders and the
Shippers/Consignees are now properly guided thereby avoiding multiple taxation,
tax exposure & harassment and created an open business atmosphere that
encourages correct tax reporting & efficient tax collection.