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On logistics in the Philippines

August 2014
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I am not a logistics expert and will not pretend to be one. I have, however, been involved in several projects that included logistics as a major study component. These include a nationwide study on inter-regional passenger and freight flow and another for freight forwarders affected by vehicle restraint policies in Metro Manila.  A more recent engagement has allowed me to take a look at logistics in the country from other perspectives including that of national agencies seeking to improve goods movement in the country and development agencies that have committed to help the country to do just that. There are local issues and there are regional ones. The regional ones often involve the need for infrastructure such as maritime ports and airports, highways and bridges, and other facilities such as those for storage and refrigeration.

For an archipelago like the Philippines, logistics is a bit more challenging than in countries whose territories are not separated by bodies of water. There is no lack for good practices though as there are other archipelagos that could provide good examples for connecting the islands such as Japan and the United Kingdom. Nearby, we share similar challenges with Indonesia and to a certain extent Malaysia. Of course, availability of resources is always an issue and particularly for the prioritization of infrastructure to be constructed aside from those that need to be maintained. The DOTC along with its attached agencies like the Philippine Ports Authority (PPA) and the Civil Aviation Authority of the Philippines (CAAP) are in the frontline when it comes to airports and ports planning, development, and maintenance are concerned. However, the DPWH plays a vital role for highways and bridges and the connections for these ports and airports including what is termed as “last-mile” connectivity that is often passed on as a responsibility of local governments. This is likely due to local roads often providing the connection between national roads (under the DPWH) and ports and airports. It is a good thing that the current DPWH has committed to a convergence program regarding national and local roads that has benefited a lot of sectors and industries like tourism and agriculture.

Rail transport is not mentioned here because there is practically none even for what remains of the once relatively extensive PNR main lines. The local issues are not simpler and can be a bit more complicated than the regional ones. The complications are usually due to more petty circumstances that may involve politics and local power plays. The basic ingredients though are related to traffic congestion and the damage to roads and bridges attributed to trucks.

Many cities and municipalities have implemented truck bans along their major roads. These are usually one or two routes in the smaller cities and towns, usually passing through the “bayan,” “poblacion” or central business district (CBD). These roads are usually national roads (e.g., McArthur Highway and the Pan Philippine Highway pass through many towns). As such, there are cases where bypass roads are constructed to alleviate congestion along these roads as well as to try to preserve the pavements in the town proper. Such traffic schemes targeting heavy vehicles are not new and are also a way to address the issue on overloading that is common in trucking in the Philippines. The bypass roads, however, generally invite development and unplanned development have often made these alternate routes more congested than the original ones.

Manila did a “power play” recently by implementing a more aggressive truck ban. This led to more severe congestion around the Port of Manila and a lot of delays that have cost a lot of money in part due to the limited alternative routes in the city and most roads are already constricted. The costs have repercussions on the economy in general as the movement of goods are affected by the impasse in Manila. Whether this was for more political or practical reasons is difficult to say because the mayor and vice mayor have invoked the very common issues of traffic congestion, road safety and pavement maintenance that got the attention, sentiment and agreement of a lot of people. Many of these people though do not understand the impacts of inefficient goods movement and likely are concerned only about passenger transportation.

More recently, a lot of containers were shipped from the Port of Manila to Subic. These are supposedly “overstaying” shipments or those that have not been claimed for a long time or have some issues regarding their release. This should ease congestion somehow but there remain the problems of shipping or logistics companies regarding freight transport in general that needs to be addressed. Both Subic and Batangas ports have been mentioned in many formal studies over the past few years including a more recent one supported by JICA. Still, there is a lot of hesitation if not confusion or uncertainty on how to go about with shifting goods movement to these ports, which are regarded to be underutilized. There are good roads connecting these ports with cities and towns but these might not be enough in the long run.

Perhaps there is a need to reconsider regional rail transport again especially for the islands of Luzon and Mindanao where long distance rail may have a tremendous impact for transporting goods over long distances. Of course, there are also issues pertaining to other ports and airports in the country including those in Mindanao (e.g., Davao, Cagayan de Oro, Phividec, Gen. Santos, etc.) and Visayas (e.g., Cebu, Iloilo, Tacloban, etc.). The RORO ports are among those that need attention as they are directly involve road transport aside from the ferries that carry them over the waters. These nautical highways are vital for goods movement around the country and require both national agencies and local governments cooperating for these facilities and services to function efficiently.

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