Assessing PH’s logistics sector

THE Department of Trade and Industry-Supply Chain and Logistics Management Division (DTI-SCLMD) has partnered with the World Bank to publish the country’s first logistics performance report this June.

DTI-SCLMD conducted surveys with manufacturers and logistics service providers in Cebu yesterday to obtain quantitative data related to the current logistics capabilities of manufacturers and logistics service providers in the country.

Jonathan Cabaltera, assistant chief at DTI-SCLMD, said the results of the survey would be helpful in crafting national logistics policies and programs that will make the country’s logistics services efficient and competitive in Southeast Asia.

The survey measures critical factors like time efficiency, reliability of transporting goods and the logistics costs.


The DTI-SCLMD and World Bank aim to survey 300 respondents in Manila, Cebu, Davao, Iloilo and Cagayan de Oro cities. Initially, the DTI has surveyed 20 respondents, mostly heads of industry associations in Manila.

World Bank International Finance Corp. consultant Roberto Galang, in a statement, said the joint report will be used “to find the pain points of the sector for the regulators to start looking into” and monitor the industry’s growth.

The team has tapped WB consultant Ruth Banomyong, who conducted similar assessment projects in other Asian countries such as Indonesia and Vietnam, to lead the project. She noted a lack of empirical data in the country’s logistics industry.

High cost

In the Philippines, logistics costs account for 24 to 53 percent of wholesale prices, with shipping and port handling costs making up eight to 30 percent, depending on the goods and routes, and five percent of retail price of goods.

According to the 2016 World Bank’s Logistics Performance Index (LPI), the Philippines ranked 71 among 160 countries. It scored 2.86 in the latest World Bank’s logistics report.

The LPI ranks countries on their trade logistics performance, looking at indicators such as customs, infrastructure, international shipments, logistics quality and competence, tracking and tracing, and timeliness.

In Asean, Singapore ranked fifth in the global LPI. Malaysia ranked 32; Thailand, 46; Indonesia, 63; Vietnam, 64; Cambodia, 73; Myanmar, 113; and Laos, 152.

Aside from making logistics services in the country efficient and competitive, participants of yesterday’s focus group discussion also pointed out the need to eliminate red tape in the Bureau of Customs.

Alexander Hey, vice president of furniture manufacturer Sarah Woodcraft, said red tape in government prevents businesses from growing. It also discourages potential investors from coming to the country.

Hey noted it is not shipping companies that burden them but the red tape in the government. Hey suggested the industry craft a position paper calling for business procedures to be streamlined.

“We need to address this immediately, otherwise we will be eaten up alive. It has happened already with Vietnam and Indonesia already cutting prices. It wouldn’t help if we won’t move,” said Hey, citing the current situation of the furniture industry.
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