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The Philippines’ Current Albatross

Increases in both Philippine imports and exports (5.4% and 8.3%, respectively) were seen in the first half of 2014. As the volume of trade continues to grow between the Philippines and the rest of the world, the Port of Manila—the country’s international shipping gateway—finds itself struggling to cope.

In February this year, the city of Manila implemented a ban on container trucks during certain times of the day in an attempt to alleviate traffic congestion in the already overcrowded capital city. With a license plate number coding scheme for cars already in effect, addressing the roughly 20,000 container trucks on the roadways each day probably seemed a logical next step. It is here that the problems began.

the-philippines-remains-backed-up

Initially restricting container trucks from entering the city on weekdays between the hours of 5 am–9 pm, the ban was later revised to just the peak hours of 6 am–10 am and 5 pm–10 pm.

The result has been the worst backlog the port has ever seen. A port utilization rate of 98% was reported at its peak. A port utilization rate of at or around 80% is what’s needed to maintain the proper flow of goods into and out of the country.

With container trucks limited to just these hours, shipping containers at the port’s two main terminals quickly began to stack up. The number of vessels waiting just to berth totaled as many as 30. Dwell times grew to more than a week. And other vessels have been/are being rerouted to ports in Batangas and Subic, which although well-intentioned is now overwhelming these ports as well as passing on to carriers the added burden of arranging transportation from there.

None of this clearly bodes well for commerce, and the Philippines has been feeling it.

Economic growth targets have been revised downwards. Tax revenues have seen an 11% drop. Food shortages as well as increases in the cost of goods have been reported. International companies have, whenever possible, been shifting much of their operations out of the country. And this was also a deciding factor in the furloughing of approximately 20,000 private-sector employees.

With economic pressure mounting, the ban was done away with completely in September. Efficiency at the port increased immediately, yet there remains much to be done.

Even with this turnaround, the Philippine Ports Authority states that with the seasonal increase in maritime shipping accompanying the Christmas holidays it won’t be until early 2015 that the situation at the port starts to get righted.

H/T: The Philippine Star

  • Fila

    Why not adresss the horrid public transportation system? You know why? Because it cost money, and that means the political class there would need to take a pay cut which won’t happen in my life time. Squeezing the shipping companies is easier because the guys making the money at the top are the same ones making the laws. They will squeeze but still get paid so screw everyone else!