Port congestion dulls exports

By Catherine N. Pillas, BusinessMirror

Posted at Jul 14 2014 06:49 AM | Updated as of Jul 14 2014 02:49 PM

MANILA - The Department of Trade and Industry (DTI) said the impact of the port-congestion dilemma in Manila has cast doubt on the government’s target of achieving 8-percent to 10-percent growth in exports this year.

Trade Secretary Gregory L. Domingo said the disruption in the operations of importers and exporters caused by the port congestion will translate to slower growth for the year.

However, Domingo remains optimistic that the export sector will still grow faster than the 5.8 percent-to-7.2 percent growth range of both merchandise and services exports seen in 2013.

The trade secretary earlier in the year predicted that exports for 2014 will grow by 8 percent to 10 percent, from 2013’s $75.5 billion, due mainly continued from A1

to the foreseen recovery of the electronics sector.

The said sector contributes the largest share in the Philippines’s export receipts, at 40 percent as of end-April.

Domingo said in a chance interview, the congestion in Manila’s ports has had a definite impact on the export numbers and clouds the achievement of the 2014 goal.

“We are still waiting for the numbers and once those come out, we have to determine whether we can meet the target or not,” the trade chief said.

What is certain, however, is that the port congestion has certainly pulled down the export sector that exceeding the original target is no longer possible.

“We said before that exports may grow 8 [percent] to 10 percent; but it’s possible that our actual growth, without this problem, could have been 10 [percent] to 12 percent,” Domingo said.

The Cabinet official, however, was quick to assure that the exports growth this year would still be up from 2013’s 5.8-percent to 7.2-percent growth.

The estimated 2013 export tally, according to a previous estimate by Bureau of Export Trade Promotion Director Senen M. Perlada, is at P76 billion, with the growth range pegged between 5.8 percent and 7.2 percent.

Based on the projection of the Development Budget Coordinating Council set earlier this year, exports in 2014 should at least grow by 8.6 percent to $82 billion, of which $57.2 billion will be for merchandise, reflecting a 6-percent growth, with services contributing $24.8 billion, with a 15-percent growth.

The congestion of Manila ports has already been cited as the primary problem that prompted the Philippine Economic Zone Authority (Peza) last week to “review” its targets, specifically the 8-percent growth in exports coming from Peza-administered zones.

Investments and employment-growth targets projected by Peza for its zones, both at 10 percent, have been affected, as well, according to Peza officials.


Faster system to clear ports

DOMINGO said with the current pace of efforts to decongest the ports, clearing the beached cargo may take until the end of the third quarter.

“At the rate it’s going, it may take up to two months for the situation to normalize, so probably by September,” said Domingo, noting that the ports are not being utilized to their full capacity on Sunday and Monday.

Domingo urged shippers to ramp up their operations on Sunday and Mondays to speed up the clearing of the ports.

“We have all that capacity, but everyone’s just working five-and-a-half days a week when we can be 24/7, that’s a waste, that day-and-a-half,” added Domingo, saying even active shipments are not being moved fast enough through the ports.

Container yards of port operators, aside from cleared and active containers, are also plugged up by laden containers that are not yet cleared by the customs bureau, numbering around 2,000.

The trade department is also asking truckers to cut by half their hauling rates on Sunday for shippers to pull out their cargo.

“If shippers use Sundays to move cargo, it can change drastically the amount of time to decongest the ports; maybe in three weeks,” Domingo said.

The trade chief said prices of goods carried by importers and exporters have been affected; but once the situation has been normalized, he expects the costs of shippers to go down and, consequently, the prices.

In Photo: Hundreds of container vans are parked at a port in Tondo, Manila. The government and the private sector are now looking for short- and long-term solutions to address the congestion at the different ports in Manila, which is seen to pull down export growth this year.

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