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Philippines Freight Transport Report Q1 2009
Market |
Logistics |
Report Type |
Market Research |
Country |
Philippines |
Published |
14 January 2009 |
Number of Pages |
55 |
Download |
|
Immediate |
|
Publisher |
Business Monitor International |
In October 2008 the National Competitiveness Council (NCC), a coalition of public and private sector groups, said it was recommending that Subic be turned into the Philippines’ ‘mother port’. The suggestion was that crane barges carrying 50 to 80 Twenty-foot Equivalent Units (TEUs) be used to tranship cargo between Subic and a range of other ports, including Batangas, Cavite, Manila, and Bataan.
Meneleo Carlos from the NCC’s Infrastructure Working Group said Subic was the closest to major nearby sea lanes. The benefit of the proposal was that transhipment work would happen within the Philippines, rather than in any other jurisdictions. At the same time it would relieve congestion and reduce reliance on road haulage through the Metro Manila area. There would be both cost savings and a reduction in pollution levels. BMI’s newly released Philippines Freight Transport Report notes that maritime cargo volume should grow by an annual average of 6.4% in 2009-2013.
Despite a global economic slowdown in the making, the outlook for the Philippines economy over the next five years is for moderate to strong growth, averaging 5.9% per annum in 2009-2013. The effect is to give freight transport a good, but not spectacular, platform for development. We expect overall freight tonnage volume to increase by an annual average of 6.2% per annum over the forecast period, ahead of overall GDP by 0.3 percentage points. While in many developing economies freight growth usually exceeds GDP growth by a significant margin, the narrower gap between the two rates in the Philippines shows the extent to which the transport sector is failing to live up to its full potential.
The air freight sector is expected to experience the most significant growth rate, averaging 7.2% year-onyear (y-o-y). This takes account of the recent negative impact of record jet fuel prices. Next in importance will be rail freight, growing by 6.7% from a low base as a result of the Northrail and Southrail projects.
One constraint facing the industry is the environment in which it operates. Comparatively speaking, the Philippines’ BMI freight rating is relatively poor in relation to regional peers, with an overall score of 45.3 (out of a potential maximum of 100.0). Under most categories, the national industry received a medium to low score. Freight and infrastructure growth rates, together with the transport intensity index (a measure of the dynamism of foreign trade) are all at the lower end of the scale.
For the 2009-2013 forecast period, we expect the transport and communications sector to outpace the economy as a whole by a small margin, as far as value of output is concerned. It will achieve average annual growth of 6.2%, versus 5.9% for overall GDP. Again, the gap between these two rates is narrower than experienced in many other emerging economies. The total value of transport and communications GDP will rise to US$15.8bn in nominal terms by 2013, representing 7.2% of the Philippines’ GDP.
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