The Japan Transport and Tourism Research Institute Asean-India Regional Office (JTTRI-AIRO) has identified measures that would improve logistics in the Philippines, focused on the need to strengthen infrastructure that will establish an efficient supply chain and eventually lower transport costs.
JTRRI-AIRO, in a presentation shared Monday by Trade Undersecretary Jean Pacheco, tagged limited multimodal transport and insufficient cold chain infrastructure as among the challenges in the logistics industry in the Philippines.
“In addition to the island structure, the high cost of logistics in the Philippines is also caused by the lack of reliability of the logistics system and the function of the logistics infrastructure. Early improvement is required to strengthen international competitiveness,” JTRRI-AIRO said.
JTTRI-AIRO thus recommended the following: integration and enhancement of the functions of Manila, Batangas, and Subic ports to improve capacity and reduce bottlenecks; continuous infrastructure development such as double track railways, proper maintenance , installation and upgrading of freight station; reduce load on local roads through barge transportation; secure more backyard spaces in Manila port; establishment of a stable roll-on, roll-off network and; development of logistics hubs in key areas near the major ports and expansion of logistics networks outside metropolitan areas.
Pacheco said the Department of Trade and Industry (DTI) aims “to make goods available, accessible, and affordable by adopting the following priorities: policy and regulatory framework; public and private investments in logistics, technology upgrade and digital transformation, ease of doing business, skills and workforce development and sustainability and resiliency.”
Pacheco quoted a study in 2020 of the Organization for Economic Co-operation and Development which showed logistics costs in the Philippines accounted for about 27.5 percent of GDP.
“This is a very high level compared to Japan, the United States, and other Asean countries,” Pacheco said.
Logistics costs in the US and Japan accounted for 9 percent and 8 percent, respectively. In Indonesia, logistics costs accounted for 21 percent; Vietnam, 18 percent; Thailand, 13.8 percent and; Singapore, 7.4 percent, the study showed.
Pacheco also quoted the World Bank’s logistics performance index data of 2023 where the Philippines scored lower than major developed countries, and Asean competitors.
The Philippines scored 3.3 — 1 being the lowest and 5 the highest. This is compared to Thailand at 3.5; Malaysia, 3.6; Singapore, 4.3. China scored 3.7; US, 3.8 and Japan, 3.9.
The presentation said JTTRI-AIRO research findings were aimed at resolving issues from perspectives such as improving connectivity between transportation modes, utilizing ICT, strengthening cooperation among logistics stakeholders, and leveraging alternative ports.
Other measures recommended by the JTTRI-AIRO are: establishment of a reliable cold chain logistics system; utilization of information technology in logistics; creating and expanding the information platform connecting multi-stakeholders at the logistics hubs; promoting mixed loading, consolidation, joint delivery, and enlightening cargo owners about their efficiency among others. Japanese research group says stronger
infra to help lower PH logistics cost
