PEZA: Truck ban may affect PH export industry

Posted at 02/26/14 6:12 PM

MANILA, Philippines – The truck ban imposed in Manila may adversely affect the country’s export industry, the Philippine Economic Zone Authority (PEZA) said.

PEZA director general Lilia de Lima expressed concern that the truck ban may lead to suspension of operations or closures of about 800 export companies in the Calamba, Laguna, Batangas, Rizal and Quezon (Calabarzon) region, which she said accounts for 80 percent of total shipments out of PEZA ecozones.

"The (export companies in Calabarzon) are very much affected. They are in a very difficult position. This will definitely affect our exports. If they reduce their production, they are going to reduce their people. They cannot continue producing if they do not have places to stock up their goods. The best they will do is lessen their production," de Lima said.

"I'm very, very worried because if this goes on and on for another two or three days, this could lead to suspension of operations or closures," she added.

She said the average daily exports of companies, mostly electronics, in Calabarzon ecozones that go through the Manila port is about $77 million.

De Lima said one company HRD Group, which ships about 400 40-footer containers (200 for export and 200 imports) daily, may only be able to ship about a fourth of its shipments because of the city ordinance.

Under the ordinance, trucks will only be allowed to travel between 10 in the morning to 3 in the afternoon then again from 9 in the evening to 5 in the morning.

But de Lima believes the window initially agreed to by Manila government is not enough.

"We are looking for alternative ways. The ideal (situation) is for most of the finished goods in ecozones in Calabarzon to ideally ship through the Batangas port. From 2011, we have been pushing that," she said.

"We need to convince the locators to talk to their mother companies to influence their shipping lines to call on the Batangas port,” she added.

Lack of roads

Port operator International Container Terminal Services, Inc. (ICTSI), meanwhile, said the lack of road infrastructure is to blame for the “low utilization of outports” in the country.

“What is lacking, and what has been lacking for the last few decades, is road infrastructure. Congestion on land is largely a result of lack of road infrastructure to match the growth of the economy. The low utilization of outports is likewise driven by poor road infrastructure. No shipping line or customer of a shipping line will want to use Batangas or Subic if it cannot get the majority of imports destined into the capital through the roads,” ICTSI Asia head Christian Gonzalez said.

Gonzalez believes the truck ban will also cause economic growth to slow down, saying the movement of trucks represent trade that fuel economic growth.

“Trade represents growth. Growth represents jobs and prosperity. Closing the roads to trade slows down growth, jobs and prosperity. It’s that simple,” he said.

He also disputed statements made by Batangas Rep. Raneo Abu that the Manila port is congested, explaining that the Port of Manila is the 25th largest non-transshipment port in the world, and the 37th largest container port overall in terms of capacity and volume handled.

“There are thousands of container ports around the globe. The Port handles more containerized cargo than any single port in 10 of the 20 member states of the G20 largest economies in the world. Specifically, the Port also handles more containers than any container port in Australia, France, Italy, Brazil, Canada or Russia,” he said.

He added that the Port of Manila handles about 3.8 million twenty-foot equivalent (TEU) containers while Batangas port has a theoretical maximum capacity of no more than 300,000 TEUs.