New road map to enhance logistics sector, develop infra
The US-funded Advancing Philippines Competitiveness (COMPETE) project has submitted a study for the crafting of a master development plan for the logistics industry.
“The master plan, when completed, shall become a strategic document for enhancing the Philippine logistics sector. Likewise it will contain key actions for implementation in the short and medium term (2016-2022),” Department of Trade and Industry (DTI) Assistant Secretary Rafaelita M. Aldaba said in a statement.
DTI met with industry stakeholders in a consultation on the master plan early this month. COMPETE is funded by the United States Agency for International Development, the lead US agency working to end global poverty.
Aldaba said the master plan will identify strategies and programs designed to further develop the country’s transport infrastructure, particularly roads and ports outside Manila.
In the same statement, DTI Secretary Adrian S. Cristobal cited the urgent need to upgrade infrastructure and logistics in the country to expedite the development of various industries and facilitate trade.
“DTI is working with various stakeholders, particularly the United Portusers Confederation and Procurement and Supply Institute of Asia, to put together a comprehensive national multimodal transport and logistics development plan,” he said.
Logistical costs account for 24 percent to 53 percent of wholesale prices while shipping and port handling costs cover eight to 30 percent, depending on the goods’ route, and roughly five percent of the retail price of goods, the DTI statement read.
Cristobal said the Philippines has the highest logistics cost among Asean (Association of Southeast Asian Nations) countries.
He said in Cambodia, the cost of transporting 15 metric tons of containerized auto parts from domestic ports to warehouses, in cost per kilometer, is the lowest at $0.89. It is followed by Thailand at $1.14. The Philippines, he said, has the highest at US$21.10.
Citing a study published by World Bank, Cristobal said the Philippines lags behind its Asean neighbors in terms of the “ease of doing business” based on the time and cost, excluding tariffs. Domestic transport was one of the three critical factors in measuring the performance of each country.
“While the numbers do not seem favorable nor encouraging, industry together with government remains focused and determined to address challenges and gaps in the various functions of the logistics chain by effecting reforms and establishing mechanisms to further build the logistics industry,” he said.
DTI recently set up the Supply Chain and Logistics Management Division (SCLMD) under the Competitiveness Bureau.
“This division is mandated to lower logistics cost and streamline the process of transporting goods from point of origin to point of destination. This includes formulation of policies and measures relative to supply chain, trade facilitation, and logistics to support exporters, importers and traders by helping secure competitive rates and equitable terms and conditions,” Cristobal added.
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