Public, private sectors commit to improve PH logistics sector

By Kris Crismundo

December 7, 2018, 9:29 am

MANILA -- Both the public and private sectors have made commitments to improve the logistics sector in the country, aiming to make the logistics services more efficient and to contribute more to job creation and to the economy.

During the first Logistics Services Philippines Conference in Pasay City Thursday, stakeholders of the logistics services sector, including cargo handlers, storage and warehousing, and freight transport and brokerage services - as well as the Department of Trade and Industry (DTI) and Department of Transportation (DOTr) - signed the Ten Commitments of the Philippines Logistics Services Sector.

Among the commitments of the stakeholders include prioritizing initiatives to make the Philippines’ logistics globally competitive; finding long-term solutions to address the sector’s issues such as high shipping costs, unnecessary fees and charges, management of empty containers, among others; establishing a Logistics Observatory; and developing a competitive and future-ready logistics workforce.

Government-related pledges include ease of doing business; cutting red tape; investments in supply chain and logistics sector; investments in infrastructure; adopting high standard regulatory practices; and conducting dialogues between public and private sectors.

These commitments target to make the country’s logistics cost competitive with its neighboring countries in the ASEAN.

In a policy brief on logistics performance of the manufacturing sector, a study done by DTI and World Bank Group’s private sector arm International Finance Corporation (IFC) shows that logistics cost in the Philippines is at 27.16 percent -- higher than Indonesia at 21.4 percent, Vietnam at 16.3 percent, and Thailand at 11.11 percent.

The study was done in 2017 with 159 respondents from Clark, Batangas, Cebu, Iloilo, Davao, Tagaytay, Cagayan de Oro, General Santos, and Metro Manila.

About 42 percent of the respondents are food manufacturers, 12 percent are from construction materials sector, 11 percent from furniture and decor sector, and the rest are from other industries.

World Bank Consultant Ruth Banomyong said logistics cost in the Philippines is the highest in the region.

Philippine Multimodal Transport and Logistics Association, Inc. (PMTLAI) President Marilyn Alberto mentioned some of the challenges that “ail the industry”, which include underdeveloped transport infrastructure, inconsistent and outdated government regulations, corruption, absence of skills training, government’s non-compliance on international agreements, and absence of masterplan for the industry.

Moreover, DTI Secretary Ramon Lopez said his agency has been implementing initiatives to help in the improvement of the logistics sector.

“DTI, through the Competitiveness Bureau, initiated a program called TRACK. TRACK stands for transforming logistics services through regulatory reform, assurance of quality, communication and capacity building, and knowledge management,” Lopez said.

He added that as part of this program, DTI has acted on complaints of traders regarding excessive fees imposed by foreign carriers, discussed solutions on the issue of empty container management, and drafting the national standard for Road Freight Transport.

“We are confident that we can achieve our mission of developing a globally-competitive logistics services by institutionalizing reforms to provide a conducive business environment for logistics services providers,” Lopez said.

“These efforts will result to an efficient and reliable logistics sector that will be beneficial to all stakeholders: the logistics services providers, the businesses, and consumers,” the DTI chief said. (PNA)