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Better infrastructure, logistics can help cut inflation: stakeholders
Better infrastructure, logistics can help cut inflation: stakeholders
ABS-CBN News
Published May 04, 2022 09:35 PM PHT
The recently inaugurated Cebu-Cordova Link Expressway (CCLEX) in Cebu. Handout
MANILA - Improving the country’s infrastructure and cutting logistical costs can help tame inflation, a logistics industry group said on Wednesday.
Pierre Carlo Curay, president of the Supply Chain Management Association of the Philippines said better infrastructure can help decongest Metro Manila and bring down the cost of transporting goods.
New infrastructure will also allow development outside of Metro Manila, he added.
Based on data gathered by SCMAP, the Philippines has a logistics cost that is 25 percent of sales, which is the highest in ASEAN.
Developed countries meanwhile only have a logistics cost of 10 percent. Worse, SCMAP data show transporters in the Philippines only average 0.5 to 1 deliveries per day. Curay said this forces transporters to buy more trucks, which adds to logistics costs.
Curay also noted that transport costs are already contributing significantly to local inflation as fuel costs rise.
“Cost of freight grew by 5 times. Can you imagine that?,” Curay said.
He noted that that fuel is one of the highest cost for transport and this adds a challenge for transporters to provide the essential goods.
Curay meanwhile lamented lamented that only 18 out of 112 projects in President Rodrigo Duterte’s flagship ‘Build Build Build’ program will be completed before the next administration is inaugurated.
Many of the projects were supposed to decongest Metro Manila and ease traffic, which has been cited as a major reason for high transport costs.
"Based on the interviews of the different candidates, infrastructure is a main component of their platform. Hopefully, the spirit of Build Build Build will continue. I pray whoever wins will continue this project,” Curay said.
Transport engineer Rene Santiago, CEO of Bellwether Advisory meanwhile said some Build Build projects were not worth the trouble.
"Many of the BBB projects are trophy projects with no viability,” Santiago said.
He added that many of the projects will end up as white elephants, and that the next administration needs to be more selective towards quality projects, not towards higher expenditures with the country’s mounting debt.
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