Foreign investors still wary of port mess
April 6, 2015 at 14:07
by Catherine Pillas -
THE Philippine Economic Zone Authority (Peza) said further improvement is needed to ease congestion at the country’s ports, no matter that Malacañang claimed that the problem has effectively been solved. As a consequence, various investors are wary of introducing new or expanded projects.
“There have been some improvements, but [they have] been quite low. [They’re] not at the level that will give confidence to new projects, or even expansion projects, for our companies now,” Peza Promotions and Public Relations Head Elmer San Pascual said in an interview.
Businesses have been wary of Malacañang’s declaration that the congestion in the country’s main gateways has been solved, given that the influx of goods into the country is at season low. The upcoming peak season, from May to June, should help validate the claim, business-sector personalities have said.
Currently, export-oriented enterprises in the special zones remain hard-pressed to justify to their principals abroad slowed production and decreased exports. These developments helped extinguish any notion of further expansion plans in the Philippines for now.
Efforts to optimize port use in Batangas, San Pascual said, have bettered the situation only minimally, as infrastructure at the port is unsophisticated and less able to accommodate large volumes of cargo.
Considering the hesitance of foreign investors, San Pascual said Peza Director General Lilia B. de Lima anticipates single-digit export growth this year of only 8 percent, effectively a downgrade from the assumed growth of 10 percent.
Peza is not alone in taking a cautious stand of assuming optimal port operations. Local and foreign business associations have also taken the Malacañang assurance with a grain of salt.
“Hundreds of millions of dollars have been lost due to port congestion and we’re a bit cautious in saying it’s over. Productivity is still low and costs from operations have gone up three to four times since the congestion. We have to see [for ourselves optimal port operations] in the second half of the year,” the Joint Foreign Chambers said, at the fourth anniversary of the Arangkada Forum held at the beginning of March.
PhilExport President Sergio R. Ortiz-Luis Jr., in a recent interview, said persistent port congestion slowed down January’s export activities, made even worse by the peso’s strong rally.
“It has eased somewhat, but to say it’s solved is far from reality,” Ortiz-Luis said of the situation at the ports in question.
The American Chamber of Commerce in the Philippines echoed the same sentiment, saying that the increased trade flow at the ports from May to June should reveal if operations have truly been normalized.
In a statement released early in March, Malacañang said that from a port-utilization rate of a high 105 percent in May 2014, rates were now at 79 percent to 84 percent for both the International Containter Terminal Services Inc. and Asian Terminals Inc.
The city government of Manila imposed a daytime truck ban in February last year, triggering congestion and causing a chain reaction of increased costs to truckers, shipping lines, and exporting and importing businesses. The ban was lifted last November.
