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CEBU PORT AUTHORITY

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SECOND CEBU PORT COMMISSION

VICENTE C. RIVERA, JR.Chairman

Secretary, Department of Transportation &Communication

JUAN O. PENAAlternate Chairman

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ANTONIO JOSE B. ELUMIR,JR.Vice Chairman

DR. RAUL P. ALCAREZCommissioner

ROMULO M. MANIGSACACommissioner

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MICHAEL C. MENDOZACommissioner

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PACITA G. TANCommissioner

RAMIRO V. VALENZUELA, JR.Commiss-~oner

EXECUTIVE OFFICERS

ANTONIO JOSE B. ELUMIR, JR.General Manager'

ENGR. DENNIS R. VILLAMORActing Deputy General ManagerPort Services Division Manager

ENGR. MARIO G. TANEngineering Services Division

ROSARIO G. PEGAROMResource Management Division Manager

ATTY.YUSOPJ.UCKUNGLegal Affairs Division Manager

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OSCAR J. LOPEZPort Safety, Security & Environment Division Manager

ROMEO S. ALVISOChief of Staff

Office of the General Manager

MANAGEMENT GROUPS

Office of the Cebu Port CommissionAtty. Yusop J. Uckung

Acting Corporate Board Secretary

Office of the General ManaaerJose Ramon H. Najarro

Executive Assistant

Enaineerina Services Division Port Services Division

Engr. Sofronio T. MagdadaroConstruction/MaintenanceSection

Capt. Arnoldo I. MaglangitHarbor Master

Engr. Jose Rido C. SullanoPlanning/MonitoringSection

Fernando C. TaladuaManager, Management Office 1

Engr. Romeo SevillaUtilities Section

Nilo L. RiveraManager,ManagementOffice2

Port Safety, Security & Environment Division Benjamin B. CartillaManager, Management Office 3

Rhonda Ave V. DaluzIntelligence& InvestigationSection Paterno C. Satina

Manager, Management Office 4

Edmund Leopoldo, Sr.Access/Pass Control Section Florencio B. Anib

Manager,ManagementOffice5Glenn SaradorPatrolfTrafficSection Rodrigo M. Oporto

Manager, Management Office 6Resource Management Division

Elizabeth C. SuarezFinanceOfficer

Augusto V. DuranoManager, Management Office 7

Perlita G. JumapaoSr. IndustrialRelationsMgt.Officer

Eutiquio Nunez, Jr.Manager, Management Office 8

Rosemarie S. SeguraActingSupplyOfficer

Claro R. Cagigas, Jr.Manager, Management Office 9

Bibiano JandayanOIC,GeneralServices

Leah S. GorreroActingChiefStatistician

GENERAL MANAGER'S REVIEW

In 1998, the Authority went full steam ahead towards fulfilling its mandate inspite of the ASEAN economic crisis.

The Change in the composition of the Cebu Port Commission took a littlelonger than usual but this did not slacken the level of performance' of theoffice in general.

A. ORGANIZATIONAL DEVELOPMENT

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The Authority had a personnel complement of 189 employees, 173 ofwhich were holding regular plantilla positions while 16 employeeswere on casual status.

I In deference to the issuance of Administrative Order No. 372, theorganizational restructuring originally programmed in 1998 wasdeferred and was reprogrammed for CY 1999.

On the improvement of the office system, the computerization of thebilling, collection, and the integrated accounting system had beenfully implemented at year's end.

B. OPERATIONALrI For the year reported, the total cargo throughput for the Port of Cebu

(Bulk, Breakbulk and Containerized for both domestic and foreigncargoes) increased to 15,262,134 m.t. in 1998 compared to13,523,552 m.t. in 1997 despite the decrease in foreign traffic(2,319,494 m.t. in 1997 compared to 2,029,614 m.t. in 1998).Domestic cargo traffic compensated for this decrease with itsincrease from 11,204,058 m.t. in 1997 to 13,232,520 m.t. in 1998.

Total domestic shipcalls increased to 68,234 in 1998 compared to65,751 in 1997 while foreign shipcalls decreased to 589 in 1998compared to 675 in 1997. Total passenger traffic (disembarking andembarking) also increased to 11,757, 951 in 1998 from 10,697,645 in1997.

The year also saw the completion of the RORO ramp at the Port ofSta. Fe (Management Office 7), increasing its berthing capacity tofour (4) small conventional vessels.

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In line with the Authority's policy of operating and maintaining onlyports and subports which have relevance to regional and nationaldevelopment, the operations and management of other ports wouldbe turned-over to interested concerned municipalities. The first of thisco-management endeavor with an LGU was the Port of Bantayan,which turn-over was effected last July 1, 1998.

For better delivery and to further encourage the participation of theprivate sector in public service, the Authority bid out the operationand management of its passenger terminal at the CIP Complex to aprivate contractor.

OPASCOR acquired additional yard cranes to increase cargohandlingcapacity and efficiency at the CIP.

Towards the last 2 months of the year, the Authority intensified itsefforts not only in its inherent berthing and cargohandling operationsbut also in other port-related matters like vendors' relocation, portbeautification, and sanitation.

Additional working committees were also created within and amongthe Commissioners to enable the Board to promulgate and attainmore responsive and realistic policies for management to implement.

C. ENGINEERING

At the close of the year 1998, the Engineering Services Division wasable to implement thirteen (13) RIM projects and eight (8) CapitalOutlay projects in the amount of P62,005,332.26 and P9,780,716.40,respectively, or a total of P71,786,048.66.

Due to the election ban, most of these projects were implementedduring the 2nd half of the year. Although some of the road repairprojects were affected by intermittent occurrences of rain, the projectswere nevertheless completed on time.

D. PORT SAFETY, SECURITY & ENVIRONMENT

The Port of Cebu enjoyed a peaceful environment. There had beenno major untoward incident that occurred inside the port area duringthe year.

To promote a pro-active policing system in the Port of Cebu, thePSSED adopted and implemented various crime preventionprograms, foremost of which were the creation of the port usersvolunteer groups for anti-crime activities in the Baseport of Cebu andthe active participation and coordination of the activities of theBarangay Unified Police Force operating within the port area.

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I E. FINANC IAL

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The slowing down of the economic activities in the ASEAN countrieshad reduced the volume of importation at the Port of Cebu.Consequently, the Authority's revenue generated from port chargesand from arrastre and stevedoring services went down, though not somuch below the target.

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The Cebu Port Authority for the year 1998 generated a total revenueof P295.04M, registering an increase of 4% over last year's revenueof P283.55M. This however was 7% short of the year's revenuetarget of P318M.

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Revenue from port charges accounted for 58% of the total. On theother hand, the Authority's income from arrastre and stevedoring was24%, while the non-traditional income and income from fundmanagement contributed 15% and 4%, respectively,

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On the expenditures side, the Authority after having fully compliedwith the requirement of AO No. 372 of offering not less than 25% ofnon-Personnel Services Budget of its 1998 Corporate OperatingBudget as mandatory cost saving measure, has expended a total ofP269.25M which was 2% below the 1998 Operating Budget ofP275.59M and 3% over that of 1997.I

.- Expenditures include repayment of long term foreign debt amountingto P61.54M for interest and loss in currency adjustment and P50M forprincipal repayment; capital expenditures of P10M; PersonnelServices at P44.2M; Repair and Maintenance of Port Facilities atP62.06M and Other Operating & Administrative Costs of P40.15M.

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The mandatory savings imposed by the government whichconstrained the Authority to defer some projects and programs hadcontributed much in the realization of a net income before tax ofP16.33M, posting an impressive 149.51% increase over last year'snet income of P6.5M.

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The 2nd Cebu Port Commission is optimistic that what had beenaccomplished in the past year was just the beginning of better years ahead.Though faced with a bigger and greater task ahead, management isconfident that with the cooperation of everyone, CPA shall be able to realizeits vision of being a better port with improved infrastructures and effectiveport services manned by dedicated personnel truly committed to be themodel of public service.

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'TATI'TI(Al DATA

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Shipe aIlsDomestic

Foreign

199868,234

589

Inc.l(Dec. )3.77%

(12.74%)

199765,751

675

m 1W7 m m7

I tUn Iesficl I.~

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6,200,000

6,000,000

5,800,000

5,600,000

5,400,000

5,200,000

5,000,000

4,800,000

4,600,000

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Passenger Traffic

Disembarking

Embarking

1998

6,000,356

5,757,595

Inc.l(Dec.)8.00%

11.98%

1997

5,556,079

5,141,566

1998 1997

I- Disem barking. Em barking 1

DomesticInboundOutbound

ForeignImportExport

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Cargo Throughput1998

13,232,5206,668,7596,563,7612,029,6141,378,340

651,274

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1997~~ '

1997

11,204,0585,585,2235,618,8352,319,4941,890,852

428,642

Variance

18.10%19.40%16.82%

(12.50%)(27.10%)

51.94%

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~ 19.J7

DomesticInbound

EmptiesFulls

OutboundEmptiesFulls

ForeignImport

EmptiesFulls

ExportEmptiesFulls

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Container in TEUs

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Variance28.65%12.93%39.29%6.58%55.68%181.55%25.41 %1.24%

(10.76%)(30.83%)(5.76%)8.86%9.94%8.59%

1997

BillImport(empties)

BillImport(fulls)

. Export(empties)

II export(fulls)

1998 1997

270,858 210,531150,285 133,08335,940 25,803114,345 107,281120,573 77,44742,278 15,01678,295 62,43162,425 63,20629,026 32,5254,483 6,481

24,543 26,04433,399 30,6816,722 6,114

26,677 24,567

30,000

25,000I

fillJdnnl

(oq:iKs)I 20,000

Jdnnl

(fill;) I 15,000.

(oq:iKs)I

10,000

III

(00s) .15,000

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lJJ7 1998

Revenue By Source

I- Port Charges. Arr & Stev [JJOther Income [JJFund Mgmt. Inc 1

1998 1997 Variance

Port Charges 169,900,227.86 162,656,801.74 4.45%

Arrastre and Stevedoring 69,500,633.27 69,049,225.36 0.65%

Other Income 42,503,825.29 39,911,434.59 6.50%

Fund Management Income 13,132,254.80 11,935,925.76 10.02%

Total 295,036,941.12 283,553,387.45 4.05%

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Expenditures

Personal ServicesOther Administrative CostsR & M Port FacilitiesDepreciationInterest Expense

Total

199844.2240.1562.0170.8061.54

278.71

199746.5248.3948.9567.0866.07

277.01

Variance(4.95% )

(17.03%)26.67%5.54%

(6.86% )0.61 %

16%

14%

IIIPersonal Service

IIIDepreciation

. OtheradministrativeCosts III R & M Port Facilities

IIIInterest Expense

Republi~ ofthe PhilippinesCOMMISSION ON AUDIT

Office of the AuditorCebu Port Authority

North Reclamation Area, Cebu City

STATE AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS

The General ManagerCebu Port AuthorityNorth Reclamation Area

Cebu City

Pursuant to Section 2, Article IX-D of the Philippine Constitution and pertinentprovisions of Presidential Decree No. 1445, we have audited the accompanying Balance Sheetof the Cebu Port Authority as of December 31, 1998, and the related Income and Cash FlowStatements, for the year then ended. These financial statements are the responsibility of theAuditee. Our responsibility is to express an opinion on these financial statements based on ouraudit.

We conducted our audit in accordance with generally accepted state auditing standards.Those standards require that we plan and perform the audit to obtain reasonable assurance thatthe financial statements are free of material misstatements. Our audit included examining, on atest basis, evidence supporting the amount and disclosures in the financial statements. It alsoincluded assessing the accounting principles used and significant estimates made by the Auditeeas well as evaluating the overall financial statement presentation. We believe that our auditprovides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all materialrespects, the financial position of the Cebu Port Authority as of December 31, 1998, and theresults of its operations, and its cash flows, for the year then ended in accordance with applicablelaws, rules and regulations and in conformity with generally accepted state accountingprinciples.

COMMISSION ON AUDIT

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R~~OState Auditor III

Unit Head

January 29, 1999

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ASSETS

CURRENT ASSETS

Cash on Hand & In BankReceivables - Trade

- Non-Trade

Total Receivables

Less: Allowance for Doubtful Accts.Net Receivables

Inventories - Supplies & Materials

- Sem i-Expendable Supplies (net)- In Transit

Total Current Assets

FIXE D ASS ETS

Land

Depreciable Fixed Assets

Building & Structures

Building & Structures in ProgressFurn., Fixt. & EquipmentFurn. Fixt. & Eqpt. - In TransitTotal Depreciable Assets

Less: Accumulated Dep'n.

Net Land, Buildings & EquipmentTotal Fixed Assets

INVE S TME NTS

S h0 rt-Term Inves tm e nt

Other Investm ents

Total Investm ents

OTHER ASSETS & DEFERRED CHARGESP repaid Tax

Contingent AssetsMiscellaneous

Total Other Assets & Deferred Charges

TOTAL ASSETS

CE BU PO RT AUTHORITYCOM PARA TIVE BALANCE SHEET

As 0fOe ce m be r 31 , 1998 & 1997

1998

9,418,990.70

6,652,640.60

16,071,631.30

359,200.25

1,063,718.38

2,371,689.55

3,118,097.00

1,664,186,921.21

26,072,218.01

223,998,470.94

55,500.00

1,914,313,110.16

1,132,473,981.08

130,343,866.61

36,748.80

2,265,843.37

7,241,943.05

223,63223

19,813,757.80

15,712,431.05

6,553,504.93

42,079,693.78

3,573,170,000.00

781,839,129.08

4,355,009,129.08

130,380,615.41

9,731,418.65

4,537,200,856.92

1997 "loINC(D EC)

7,639,117.48

10,026,665.46

17,665,782.94

135,521.34

1,642,929,670.16

25,987,458.89

225,287,570.73

4,575,828.55

1,898,780,528.33

1,064,838,004.00

127,594,934.22

36,748.80

880,043.00

4,595,334.51

223,632.23

28,700,313.66

17,530,261.60

1,580,513.55

47,811,088.81

3,573,170,000.00

833,942,524.33

4,407,112,524.33

127,631,683.02

5,699,009.74

4,588,254,305.90

(30.96)

23.30

(33.65)

(9.02)

165.05

(10.37)

(100.00)

(11.99)

1.29

0.33

(0.57)

(98.79)

0.82

6.35

(6.25)

2.15

2.15

157.47

57.59

70.76

(1 .11 )

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1998

LIABILITIES & RESIDUAL EQUITY

CURRENT LIABILITIES

Accounts Payable-TradeOther Current Liabilities

Total Current Liabilities

30,732,087.12

9,695,420.56

LONG-TERM LIABILITY

Loans Payable-Foreign

Accrued Interest Payable

208,579,305.67

15,110,170.26

Total Long-Term Liability

CONTINGENT LIABILITY

OTHER LlABILITTIES

& DEFERRED CREDITS

Output VAT PayableMiscellaneous

499,323.67

10,642,931.19

Total Other Liabilities & Deferred Credits

TOTAL LIABILITIES

RESIDUAL EQUITY

Equity Contribution

Retained Earnings

Surplus Reserves:

Gratuity Reserve

Appraisal Surplus

Contingent Surplus

Total Surplus Reserves

8,600,000.00

4,017,385,718.08

7,137,280.23

TOTAL RESIDUAL EQUITY

TOTAL LIABILITIES & RESIDUAL EQUITY

Prepared by: Certified Correct:

ELIZABETH ~UAREZ

Finance Officer

ROS~GAROM

RMD~~

40,427,507.68

223,689,475.93

54,000,000.00

11,142,254.86

329,259,238.47

150,862,076.32

23,956,543.82

4,033,122,998.31

4,207,941,618.45

4,537,200,856.92

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1997 %INC(DEC)

33,232,834.99

5,917,453.04

265,570,851.65

32,846,167.00

429,301.17

11,742,139.45

8,600,000.00

4,017,385,718.08

4,595,334.51

39,150,288.03

298,417,018.65

41,500,000.00

12,171,440.62

391,238,747.30

150,862,076.32

15,572,429.69

4,030,581,052.59

4,197,015,558.60

4,588,254,305.90

(7.52)

63.84

3.26

(21 .46)

(54.00)

(25.04)

30.12

16.31

(9.36)

(8.46)

(15.84)

53.84

55.32

0.06

0.26

(1 .11 )

General Manager

Prepared by:

ELIZABETHhbAREZ.Finance Officer

Certified Correct:

ROS~GAROM

~a~er

FS-98(COA)/FINREP98

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CEBUPORTAUTHORITY

INCOME STATEMENTFor the Period ending December 31, 1998

(WithComparati\eFiguresfor1997)

INC(DEC)1998 1997 ANOUNT %

REVENUE FROM OPERATIONS (Schedule1) 281,904,686.42 271,617,461.69 10,287,224.73 3.79

Less: Operating Expenses:Personal Services (Schedule2) 44,216,063.34 46,520,345.44 (2,304,282.10) (4.95)RM-Port Facilities 62,005,332.26 48,950,784.75 13,054,547.51 26.67

Maintenace & Other Operating Expenses (Schedule3) 40,151,721.99 48,390,842.48 (8,239,120.49) (17.03)

Total Operating Expenses-Cash Charges 146,373,117.59 143,861,972.67 2,511,144.92 1.75

NET REVENUE BEFORE NON-CASH CHARGES 135,531,568.83 127,755,489.02 7,776,079.81 6.09

Less: Depreciation Expense 70,798,162.18 67,080,446.63 3,717,715.55 5.54

NET INCOME FROM OPERATIONS 64,733,406.65 60,675,042.39 4,058,364.26 6.69

Add/(Deduct): Other Expense/Revenue Items:Fund Management Income 13,132,254.80 11,935,925.76 1,196,329.04 10.02

Interest on Long-Term Loans (61,536,763.42) (66,066,681.27) 4,529,917.85 (6.86)NET INCOME BEFORE INCOME TAX 16,328,898.03 6,544,286.88 9,784,611.15 149.51

Less: Provision for Income Tax 1,086,858.71 2,290,500.40 (1,203,641.69)NET INCOME BEFORE BTr DIVIDEND 15,242,039.32 4,253,786.48 10,988,252.84 258.32

Less: Provision for BTr Dividend 7,621,019.66 2,126,893.24 5,494,126.42 258.32

NET INCOME TO RETAINED EARNINGS 7,621,019.66 2,126,893.24 5,494,126.42 258.32

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SCHEDULE 1SUMMARY OF REVENUE

H arbor Fees

Berthing ChargesAn c h 0 ra g e Fee sPortUsage FeesWharfage DuesStorage ChargesArrastre/Stev. ShareOther Income

Tot a I Revenue from 0 p n s .Fund Managementlncome

TOTAL REVENUE

1 998

1 6 ,3 4 7 ,9 2 6 .1 11 6 ,4 9 9 ,4 6 1 .5 2

3 ,2 0 0 ,3 5 5 .9 52 0 ,4 5 0 ,4 8 0 .549 3 ,8 5 1 ,1 2 6 .4 61 9 ,5 5 0 ,8 7 7 .2 86 9 ,5 0 0 ,6 3 3 .2 74 2 ,5 0 3 ,8 2 5 .2 9

2 8 1 ,9 0 4 ,6 8 6 .4 2

1 3 ,1 3 2 ,2 5 4 .8 0

2 9 5 ,0 3 6 ,9 4 1 .2 2

SCHEDULE 2SUM MAR Y 0 F PER SON A L S E R V IC E S

Salaries & WagesSocialSecurity PremiumsManpower Development0 ther Staff Benefits

TOT ALP E R SON A L S E R V IC E S

SCHEDULE 3SUM MAR Y 0 F M A IN TEN AN C E

Traveling ExpensesCommunication ServicesSecurity ServicesBoard ExpensesMeetings & ConferencesInsurance Non-Staff

Printing & BindingRM-Equipment0 ffice Supplies & MaterialsWater,llum.& Power

Retirement GratuityAuditing ServicesR M -M otor Vehicles

Discretionary ExpensesTaxes & Licenses

Other Operating Expenses

TOTALMOOE

5 C H . 15 9 7

2 1 ,4 7 4 ,5 6 9 .1 63 ,0 7 8 ,2 5 1 .5 2

3 7 ,6 4 9 .0 81 9 ,6 2 5 ,5 9 3 .5 8

4 4 ,2 1 6 ,0 6 3 .3 4

& OPERATING E X PEN S E S

3 8 2 ,7 9 8 .3 68 3 1 ,5 9 1 .3 2

7 ,5 6 5 ,76 8 .1 32 ,6 8 3 ,5 6 4 .9 0

3 0 3 ,3 4 7 .2 75 6 9 ,8 1 2 .5 6

1 ,70 1 ,5 0 4 .5 6519,460.99650 ,79 5 .7 0

9 ,8 3 8 ,5 0 1 .743 0 1 ,0 6 2 .1 7

35,905.82244 ,4 3 4 .2 9

8,116.171 2 ,5 2 3 ,8 7 8 .2 6

1 ,9 9 1 ,1 7 9 .75

4 0 ,1 5 1 ,72 1 .9 9

')

1 9 9 7

1 2 ,9 8 3 ,9 6 2 .2 51 6 ,4 3 6 ,7 6 2 .1 4

2 ,2 6 6 ,5 9 5 .762 0 ,9 7 3 ,4 7 1 .2 98 5 ,2 2 1 ,4 8 2 .2 72 4 ,7 7 4 ,5 2 8 .0 36 9 ,0 4 9 ,2 2 5 .3 63 9 ,9 1 1 ,4 3 4 .5 9

2 7 1 ,6 1 7 ,4 6 1 .6 9

1 1 ,9 3 5 ,9 2 5 .76

2 8 3 ,5 5 3 ,3 8 7 .4 5

2 4 ,5 0 2 ,1 7 4 .8 52 ,7 5 1 ,71 8 .3 0

2 0 0 ,5 4 9 .2 51 9 ,0 6 5 ,9 0 3 .04

4 6 ,5 2 0 ,3 4 5 .44

6 6 3 ,8 4 8 .8 76 6 9 ,2 3 1 .79

6 ,7 3 5 ,3 2 0 .4 91 ,9 7 0 ,5 4 3 .3 7

2 3 6 ,7 2 7 .1 7412,038.71

1,625,967.082 9 8 ,5 1 3 .8 35 6 0 ,7 7 4 .3 7

8 ,4 5 3 ,8 4 8 .3 56 1 6 ,1 6 1 .6 3

1,981,402.15574,469.517 5 4 ,4 3 8 .3 2

2 1 ,5 0 9 ,8 7 8 .6 71,327,678.17

4 8 ,3 9 0 ,8 4 2 .4 8

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% INC(DEC)

2 5 .9 10 .3 8

4 1 .2 0

(2 .4 9 )1 0 .1 3

(21.08)0 .6 56 .5 0

3 .79

1 0 .0 2

4 .0 5

(12.36)1 1 .8 7

(81.23)2 .9 4

(4 .9 5 )

(42.34)2 4 .2 61 2 .3 33 6 .1 82 8 .1 43 8 .2 9

4 .6 57 4 .0 21 6 .0 51 6 .3 8

(51.14)(98.19)(57.45)(98.92)(41.78)

4 9 .9 7

(17.03)