Chief Strategy Officer / Singapore / Southeast Asia
Three choices that each gave something up
- Group revenue
- ₱6.4 billion
- Banagra Sealink, 2025
- Vessels in service
- 24
- 17 passenger RoRo ferries, 5 fast craft, 2 cargo RoRo
- Routes operated
- 27
- After two overnight exits in 2023
Decisions & consequences
01Closing two overnight routes, including the founder's first
In 2022 our two overnight routes from Cebu to northern Mindanao earned ₱540 million, about a tenth of group revenue, and lost ₱128 million at operating level after fuel. Their ships were built in 1991 and 1993 and needed major docking within two years. Passenger loads had fallen to 41% as travellers chose flights, and truck operators increasingly drove through Bohol and Leyte using short crossings, ours among them. One of the two routes was the service our founder opened in 1979.
The chairman wanted to keep the heritage route with a larger used ship costing about ₱780 million. Our commercial director feared that shippers on both routes would move their other business to a competitor. I recommended closing both in stages and putting the capital into short crossings, where we were already turning trucks away. The paper stated the trade-off: a tenth of revenue, a service no other part of the group offered, and a difficult message to a city that had relied on us for four decades.
The board approved the staged exit in November 2022. The first route closed in March 2023 and the second in October, after three months on a reduced schedule. We followed the maritime regulator's process for withdrawing service, sold one ship for ₱88 million and kept the other as a peak reserve until its retirement in 2025. Of 171 seafarers, 126 moved to other vessels and 45 accepted separation packages above the legal minimum.
The operating loss disappeared, and vehicle volumes on the two short corridors that received the redeployed capacity rose 22% by 2024. Group operating margin moved from 5.8% in 2022 to 9.1% in 2024, though lower fuel prices helped. We also lost two large shippers' Visayas business for a year, and the city had no direct overnight service for seven weeks before another operator added sailings. I would brief the city government and our largest shippers six months earlier, and I would try to hand the timetable to another operator rather than leave a gap.
Choosing a shared terminal over an exclusive berth
In early 2023 a provincial government in Eastern Visayas proposed a twenty-five-year joint venture to rebuild its main ferry port. The province would contribute land and the existing pier; we would fund ₱1.15 billion for two new roll-on/roll-off ramps, a 1,200-seat passenger terminal and a truck marshalling yard, in return for a 70% economic interest. Trucks queued there for a median of three hours and ten minutes, and only 68% of our departures left on time.
Our president and the fund's representative wanted ten years of exclusive berthing for our vessels in return for the capital. On their model, exclusivity lifted the project's return from 11.9% to 14.6%. I argued for a common-user terminal with published priority windows for our scheduled sailings. Exclusivity would invite challenge from rival operators, and an administration elected for three years could reopen any arrangement that looked like a favour. Passengers, I expected, would blame us for having no choice.
The board accepted the common-user design and the lower return in April 2023. We wrote a berth-fee schedule that any operator could read, a review formula tied to published costs, and a clause allowing either partner to call an independent review after an election. The joint venture, Sanvoro Port Terminal Corporation, opened in August 2024, and I joined its board as our nominee.
In its first full year to August 2025, the terminal handled 1.26 million passengers, 37% of them on other operators' vessels, and earned ₱58 million in berth fees from those operators. Our on-time departures there rose to 88%, and the median truck wait fell to one hour and five minutes. A new governor took office in mid-2025 and kept the agreement unchanged. We gave up roughly ₱40 million a year of modelled income. Next time I would form the joint traffic committee with rival operators before opening, not four months after, and settle the fee-review formula in weeks rather than the six months it took.
Ordering three new ferries instead of four used ones
By 2024 four of our passenger ferries averaged thirty-three years of age and faced steel renewal that our technical director estimated at ₱610 million over three years. The obvious replacement was four 20-year-old ships from overseas owners, available for about ₱2.0 billion and able to sail within months. The alternative was three 72-metre day ferries from a regional shipyard, designed for our short crossings, at ₱3.4 billion, with deliveries from early 2026.
Our chief financial officer and the fund's representative preferred used ships: less borrowing, more seats in Holy Week and December, and no delivery risk. Several chief engineers worried about unfamiliar engines and spares. I recommended the new vessels. On our model they would burn 26% less fuel per crossing, need two fewer crew per sailing and avoid another round of hull renewal in the mid-2030s. Lower fuel use was also the only practical way for us to cut emissions this decade. The cost was 12% less peak capacity on two corridors and ₱1.4 billion more capital.
The board approved the order in September 2024, financed by a ten-year loan and internal cash, and the fund agreed to defer its expected dividend for 2025. We considered a battery-hybrid design for one fifty-minute crossing but deferred it, because the far-side port, which we do not operate, had no shore power. Instead we spent ₱90 million reserving space and cable routes so that batteries could be added later. Chief engineers joined the specification in its third month.
The first ferry entered service in February 2026 and has used 24% less fuel per crossing over its first seven months. The second arrived in August, and the third is due in February 2027. In Holy Week 2026 we refused about 3,800 vehicle bookings on the two tighter corridors, a cost I had forecast but customers felt sharply. I would negotiate shore power with the far-side port alongside the order, and bring chief engineers in from the first week.