Investment pledges in the transportation and storage sector grew almost nine-fold to P37.5 billion in 2020 following the surge in demand from the warehousing and logistics industry, according to KMC Savills.
In a report, the real estate and brokerage firm said opportunities are not just limited onshore as the country is also expected to benefit from relocating manufacturing companies which are eyeing cheaper lease rates in Southeast Asian countries.
However, attracting these companies will be a challenge due to non-competitive cost and ease of doing business in the Philippines.
“Despite the country’s healthy workforce filled with able and highly skilled individuals, ease and cost of doing business in the Philippines has been a challenge compared to its Asean neighbors,”” KMC Savills said.
The report said the warehousing and logistics industry, considered the saving grace of the economy, is seen to continue to grow to support demand for online retail and the country’s vaccination rollout.
KMC forecasts the booming e-commerce industry will continue to drive logistics leasing demand throughout the year as the pandemic accelerates the shift to omnichannel retailing. Sales are expected to hit $4 billion this year.
“The pandemic will continue to drive a shift towards omni-channel retailing. Last-mile delivery facilities is in line with the expansion of e-commerce and the expectations of an increasingly sophisticated market. Demand for warehousing will continue to grow even in the provincial areas as e-commerce expand in untapped markets.” the report said.
Here, another challenge has emerged,
“Growth of the sector might be slow due to absence of quality supply options that meet the strict specification requirements of e-commerce companies,” KMC Savills said.
