The National Economic and Development Authority (NEDA) said reforms in the logistics sector and pro-competition regulations are needed to bring the Philippine economy towards recovery.
“The pandemic restricted the flow of goods in the domestic and global supply chains and exacerbated the issues in the Philippine logistics industry, which was already lagging behind its Asean neighbors even before the coronavirus disease 2019 (COVID-19) pandemic,” Karl Kendrick Chua, acting socioeconomic planning secretary, said in a statement Tuesday evening.
“Despite the country’s improved ranking in the World Bank Logistics Performance Index from 71st place in 2016 to 60th place in 2018, more work is needed to upgrade our logistics system to approach that of our neighbors – for instance, Hong Kong and Singapore,” he added.
NEDA also cited the latest available data from the Department of Trade and Industry and the World Bank, which showed that logistics costs in the Philippines accounted for 27.2 percent of sales of manufacturing firms in 2017.
Meanwhile, foreign direct investment (FDI) data from the Bangko Sentral ng Pilipinas shows that the share of FDI in transport and storage averaged only 0.6 percent of total FDI recorded for the period 2014-2019.
Chua said the National Logistics Master Plan 2017-2022 will be updated to further improve efficiency of the national logistics system.
The master plan highlights the regulations needed to boost the performance of logistics components such as customs procedures, port operations and transportation connectivity.
The NEDA chief also highlighted the pending measures that are immediately doable to attract more investments in the logistics sector.
“We urge our legislators to swiftly pass the amendments to the Public Service Act, the Retail Trade Liberalization Act, and the Foreign Investment Act. All these are crucial in enhancing competition and creating more and better jobs in the country, especially the logistics sector, and crucial for the economic recovery from COVID-19,” Chua said.
To address the issues in the logistics sector, NEDA said the government enacted significant landmark measures, including the Ease of Doing Business and Efficient Government Service Delivery Act of 2018, and the National Competition Policy through a joint memorandum circular issued by NEDA and Philippine Competition Commission that is pending the President’s signature.
The administration is also investing in more infrastructure by continuing the Build, Build, Build program.
The 2021 budget of P4.5 trillion includes P1.1 trillion allocated for infrastructure spending.