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PH logistics ‘needs its reinvention’

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by April 24, 2017 General

The Philippines has “to reinvent its logistics sector” to raise its visibility as a favored business destination in Asia, or increasingly lose out to neighboring countries, according to analysts.

Owing to regulatory burdens, the country’s logistics industry is faring poorly compared to that of its peers in the Association of Southeast Asian Nations (ASEAN), Aida Velasco and Salie Siao said in a recent briefing.

Logistics performance surveys indicate that the Philippines has been slowly backsliding, they added, speaking during a public consultation organized by the Development Academy of the Philippines.

“Given the low competitiveness standing of the country in comparison with its ASEAN neighbors as regards logistics, the country has to reinvent its logistics sector to have a better chance in its bid to be a choice business destination in the Asia-Pacific region,” they said.

“Given that the transportation sector and infrastructure that supports it are highly regulated by the government, a review of regulations that burden the players in the logistics industry should be reviewed to better support the ease of doing business in the country,” they further stated.

In terms of global ranking, the Philippines’ standing has been fluctuating, they noted.

In the World Bank’s Logistics Performance Index (LPI), the Philippines placed 65th out of 160 countries in 2007. In 2010, the rank improved to 44th place, only to go down to 52nd, in 2012. And in 2016, the Philippines’ ranking has worsened at 71st.

The overall score of the Philippines’ logistics industry is further subdivided into six key dimensions, ranging from efficiency of the clearance process by customs and quality of trade- and transport-related infrastructure to the ease of arranging competitively priced shipments.

“From 2007-2016, the country’s LPI has shown a decreasing trend in these six dimensions,” Velasco and Siao said.

Compared with its ASEAN neighbors, the Philippines is ranked sixth next to Singapore, Malaysia, Thailand, Indonesia, and Vietnam.

Challenges ahead

“It is notable that in 2010, our country has improved its overall ranking, where we came in 4th (Vietnam came in as 5th and Indonesia came in as 6th) but in 2012, our performance slowly regressed to 7th place after Brunei, who recently joined the LPI ranking.”

The presenters cited the challenges industry stakeholders said they are up against, which include red tape, unclear and poorly thought-out government regulations, informal payments, poor infrastructure, non-compliance with international agreements such as the ASEAN Framework Agreement on Multimodal Transport, and lack of skills development.

Velasco and Siao enumerated a number of recommendations designed to invigorate the logistics sector.

On policymaking, they cited the need to develop an integrated and long-term national master plan for supply chain and logistics; create an administrative agency for supply chain and logistics; and review, streamline, and standardize logistics-related policies to promote efficiency.

To improve efficiency, they pushed for automation of relevant government agencies.

For infrastructure, it is crucial to promote the following: continuous development of transport infrastructure, capacity expansion of air and sea gateways, and improved efficiency of road freight transport. Also suggested is the use of rail for freight transport. / PHILEXPORT NEWS AND FEATURES

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