Businesses want BI to review immigration fee

Even the business sector is worried over the proposed new immigration fee of P480 per passenger.

That’s saying something, especially now that the cost of just about everything is on the rise.

In a position paper sent to The STAR, the Philippine Chamber of Commerce and Industry (PCCI) said that while it supports modernizing the country’s borders, the proposed fee should be assessed before implementation.

PCCI said the review should take into consideration the existing passenger and travel-related charges already imposed in the Philippines as well as the charges imposed in comparable ASEAN countries, as we may lose more tourists to our neighbors.

The project

The so-called Civil Aviation and Immigration Security Services (CAISS) Project is a major PPP aimed at modernizing the country’s border management infrastructure across 11 international airports, one major international seaport and six mobile border crossing stations.

The project proponent is US-headquartered Securiport LLC, which submitted an unsolicited proposal through the PPP Center of the Philippines in May 2023. The Department of Justice approved this.

According to documents on the project, the proposed system has an approved cost of approximately P10.744 billion, with a proposed 20-year term. Supposedly, this would be at no cost to the government.

However, the BI and the proponent would charge a user fee of $4 or P240 one-way per international passenger, totaling P480 for a round trip.

The case for modernization

The PCCI, the largest umbrella organization of business organizations in the country, has made it clear that it recognizes the importance of strengthening the country’s immigration and border-management systems.

After all, it said, efficient and secure border processes are essential to facilitating international travel, tourism, business mobility and trade.

ASEAN comparison

The Bureau of Immigration has cited passenger-related security or border charges in other jurisdictions to demonstrate that the proposed Philippine fee is “comparatively modest.”

However, PCCI compared passenger charges across the 11 ASEAN countries and found that the Philippines ranks second highest in total departure charges for outbound resident passengers, next only to Singapore.

More importantly, it pointed out that the Philippines is the only country in the region imposing three separate fees remitted to three different entities for different purposes: P950 for terminal fees, built into the ticket; P1,620 in travel tax paid to TIEZA for government tourism development and the proposed P240 immigration fee. That means a total of P2,810 for outbound citizens and P1,190 for foreign tourists.

According to PCCI, other Southeast Asian countries generally collect a consolidated passenger charge that helps pay for airport maintenance, operations and security.

In other words, border and airport-related services are already incorporated into the broader passenger charges in several neighboring countries.
For instance, Singapore charges S$65 or P2,850 for passenger service, security fee, aviation levy and airport development fee.

This is built into the ticket and collected by Changi Airport Group to fund terminal operations, security and civil aviation expansion.

This is why PCCI believes that simply comparing the proposed $4 fee with the charges in other countries misses the bigger picture.

The question is not whether P240 is a relatively small amount. The question is whether passengers should be made to pay yet another fee for services that may already be covered, at least in part, by existing charges and government funding.

“While the proposed border security fee itself is nominally lower than total departure fees in neighboring countries, this is because border security operations in other ASEAN nations are already integrated into their single outbound airport charge,” PCCI said.

Value for money and financing structure

The Department of Justice-approved project cost is P10.74 billion, to be financed by the private partner and recovered through user fees over a proposed 20-year term. This financing model allows the government to avoid an immediate direct capital outlay, an advantage that PCCI recognizes.

However, the PCCI said that while this arrangement may reduce the government’s need for an immediate capital outlay, the absence of an upfront government expenditure does not by itself establish that the proposed financing structure is the most cost-effective option.

Thus, the PCCI is asking:

Before implementation, government should disclose and assess:

• the basis for the proposed $4 fee;

• projected passenger volumes and resulting collections;

• the project’s capital and operating costs;

• the expected revenue of the private partner over the concession period;

• government and private-sector revenue-sharing arrangements, if any;

• provisions governing future fee adjustments and

• alternative financing arrangements, including government funding or the use of existing passenger-related charges.

The proposed fee should ultimately be proportionate to the actual cost of the services delivered and the measurable benefits to passengers and government, PCCI said.

PCCI therefore recommends that any additional passenger charge be supported by a clear demonstration of its necessity, cost and corresponding improvement in border services.

It also said that the BI must first undertake an ASEAN benchmarking study and compare passenger, airport, security, immigration and border-related charges in ASEAN countries.

It should also consider alternative financing arrangements. The project, it said, may be financed through existing passenger or airport charges, or other financing mechanisms before imposing a separate border-security fee.

The PCCI also sought sufficient disclosure of the project’s financial model, including the basis for the user fee and the respective obligations of the government and the private partner, Securiport.

For sure modernization should not become another convenient excuse to burden passengers with another fee, especially in these increasingly challenging times.

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