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ALI inches up after first-half earnings, AirSWIFT sale plans

AYALA Land, Inc. (ALI) was one of the most actively traded stocks last week, following the release of its first-half earnings and the plans to sell its boutique airline AirSWIFT.

Data from the Philippine Stock Exchange showed that ALI ranked sixth in value turnover, with P1.12 billion worth of 38.31 million shares exchanging hands from Aug. 5 to 9.

The property developer’s shares closed at P30 each on Friday, 3.8% higher than their Aug. 2 close of P28.90. However, the stock has dropped by 12.9% since its P34.35 finish on Dec. 29, 2023.

Toby Allan C. Arce, head of Sales Trading at Globalinks Securities and Stocks, Inc., said that Ayala Land became one of the most active stocks traded last week due to the increase in its earnings for the first half of 2024 and strategic moves to optimize its portfolio with the sale of its boutique airline AirSWIFT.

“By divesting from Air-SWIFT, Ayala Land can reallocate capital towards higher-growth areas within its real estate portfolio,” Mr. Arce said.

He added that the decision has been positively received by investors who view it as a “prudent move” to enhance ALI’s operational efficiency and financial health.

Last week, ALI said it hopes to complete the sale of Air-SWIFT this year, as it is considering offers from several buyers, aside from the Gokongwei-led Cebu Pacific.

According to Ayala Land Head of Leasing and Hospitality Mariana Zobel de Ayala, the company is also in talks with other airlines for its planned sale of AirSWIFT.

Meanwhile, Regina Capital Development Corp. Equity Research Analyst Jemimah Ryla R. Alfonso said that ALI’s residential sales have held up strong on the back of high demand for its premium brand.

“Investors seem pleased with the company’s direction, hence making ALI one of the most active stocks [last] week,” she said in a Viber message.

In a disclosure to the local bourse, ALI’s net income grew by 15% year on year to P13.1 billion in the first semester, following an increase in consolidated revenues to P84.3 billion.

Its residential revenues rose by 40% to P43.7 billion, and commercial and industrial lot sales increased by 19% to P6.3 billion.

“This performance is attributed to a recovering economy and increased consumer spending, which have driven demand for real estate products and services,” Mr. Arce said.

Its second-quarter financial statements were not yet available.

For the third quarter, Mr. Arce expects ALI’s bottom line to hit P6.9 billion and its full-year net income to reach P28.1 billion.

Ms. Alfonso, for her part, sees ALI’s attributable net income growing by 27% to “north of P30 billion” this year.

“Given the current technical setup, Ayala Land’s stock is expected to show stability around the pivot point of P29.85, with potential upside towards the resistance levels of P31 and above if bullish momentum increases,” Mr. Arce added.

Ms. Alfonso pegged ALI’s support and resistance levels at P29.25 and P30.25, respectively. — C.W.E. Laureta

Gov’t debt yields climb

By Abigail Marie P. Yraola, Deputy Research Head

YIELDS on government securities (GS) traded in the secondary market climbed across the board last week following the release of data showing better-than-expected Philippine economic growth in the second quarter and quicker inflation in July.

GS yields, which move opposite to prices, went up by 2.11 basis points (bps) on average week on week, based on PHP Bloomberg Valuation Service Reference Rates data as of Aug. 8, published on the Philippine Dealing System’s website.

Rates of the 91-, 182-, and 364-day Treasury bills (T-bills) rose by 5.58 bps, 4.13 bps, and 3.46 bps week on week to 5.8429%, 6.1056%, and 6.1977%, respectively.

At the belly, yields on the two- three-, four-, five- and seven-year Treasury bonds (T-bonds) went up by 3.43 bps (to 6.0261%), 2.15 bps (6.0385%), 0.94 bp (6.0594%), 0.16 bp (6.0825%), and 0.01 bp (6.1163%), respectively.

Likewise, at the long end, the 10-, 20-, and 25-year debt papers saw their rates increase by 2.07 bps (to 6.1535%), 0.67 bp (6.3206%), and 0.62 bp (6.3194%).

GS volume traded was at P23.13 billion on Friday, lower than the P31.8 billion recorded a week earlier.

“Local yields broadly moved higher as market participants anticipated a stronger Philippine inflation reading for July, which surpassed market consensus… Market participants focused more on local economic releases during the week despite weak US economic data. The higher inflation reading and the stronger second-quarter Philippine economic growth both supported the upward move in domestic yields,” a bond trader said in an e-mail.

The recent rise in domestic rates boosted demand for government securities with longer tenors, as seen in last week’s auctions, the trader said, adding that “less dovish” remarks from Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona, Jr. following the July inflation uptick also supported yields.

Headline inflation accelerated to a nine-month high of 4.4% in July from 3.7% in June, the Philippine Statistics Authority (PSA) reported last week.

This was slower than the 4.7% print in the same month a year ago and was within the BSP’s 4%-4.8% forecast for the month. However, this was higher than the 4% median estimate in a BusinessWorld poll of 15 analysts and was the fastest in nine months or since the 4.9% clip in October 2023.

The July print marked the first time since November that inflation exceeded the BSP’s 2-4% annual target.

The Monetary Board is now “a little bit less likely” to cut rates at its Aug. 15 policy meeting following the worse-than-expected July inflation print, Mr. Remolona said following the data release.

The Monetary Board in June kept its policy rate at an over 17-year high of 6.5% for a sixth straight meeting following cumulative hikes worth 450 bps from May 2022 to October 2023.

Meanwhile, Philippine gross domestic product (GDP) expanded by an annual 6.3% in the second quarter, the PSA reported separately last week. It was stronger than the revised 5.8% growth in the first quarter and 4.3% in the second quarter of 2023.

For the first semester, GDP growth averaged 6%, hitting the low end of the government’s 6%-7% target.

“The market initially reacted adversely to the poor jobs data from the US and the potential implication of a recession and some geopolitical news out of the Middle East,” a second bond trader said in a Viber message.

“This was coupled with higher-than-expected inflation for July coupled with statements from Mr. Remolona that a rate cut was less likely to happen [this] week. As such, there was a bit of a sell-off, but it quickly dissipated as markets eventually stabilized prior to the release of the GDP data,” the second trader said.

For this week, GS yields may continue to climb as the market awaits the Monetary Board’s rate-setting meeting on Thursday, both traders said.

“Local yields are expected to move higher amid less dovish expectations ahead of the BSP policy meeting and potentially strong US consumer and producer inflation reports,” the first trader said.

July US producer and consumer inflation data will be released on Aug. 13 (Tuesday) and 14 (Wednesday), respectively.

“The market will likely be focused on the timing of the rate cut — if it will begin [this] week or at some off-cycle date,” the second trader said.

Mr. Remolona last week said they are open to an off-cycle policy move.

After Aug. 15, the Monetary Board’s remaining policy-setting meetings this year are on Oct. 17 and Dec. 19.

ISIS-inspired suspect in Taylor Swift show plot planned suicide attack

VIENNA — An Austrian teenager arrested over an alleged plot to strike a Taylor Swift concert in Vienna planned to carry out a suicide attack that would have caused a “bloodbath” and had vowed loyalty to Islamic State (IS), authorities said on Thursday.

The 19-year-old man, who has North Macedonian roots, made a full confession in custody, Austria’s general director for public security Franz Ruf told a news conference.

He swore allegiance to the IS group’s leader on the internet and had chemicals, machetes, and technical devices at his home in the town of Ternitz in preparation for an attack, Mr. Ruf added.

The suspect was planning a lethal assault among the estimated 20,000 “Swiftie” fans set to gather outside Vienna’s Ernst Happel Stadium, said national intelligence head Omar Haijawi-Pirchner. Two other Austrian youths aged 17 and 15 were detained on Wednesday over the reported plot.

“The main perpetrator has confessed that he was supposed to carry out a suicide attack with two accomplices,” said Austrian Chancellor Karl Nehammer.

“The suspects actually had very specific and detailed plans … to leave a bloodbath in their wake.” Authorities painted a picture of the main suspect having self-radicalized, transforming his appearance and sharing Islamist propaganda online. He quit his job on July 25, telling people he had “big plans,” Mr. Ruf said.

One neighbor told Austrian broadcaster Puls24 that the suspect had kept himself to himself and had grown a “Taliban beard.”

The 17-year-old suspect had been given a job with a company a few days ago that was providing services at the stadium, according to security officials.

Event organizer Barracuda Music said it had canceled Ms. Swift’s three concerts in Vienna, due to start on Thursday for a sold-out 65,000 audience each, in coordination with the singer’s management team.

Fans, many of whom had travelled a long way to Vienna, expressed both dismay and understanding.

“It’s just heartbreaking, just frustrating. But at the end of the day I guess it’s for everyone’s safety,” said Mark del Rosario, who had flown from the Philippines to see the wildly popular US singer.

MUSIC WORLD ROCKED
US broadcaster ABC cited law enforcement and intelligence sources as saying Austrian authorities had received information about the Swift concert threat from US intelligence.

It quoted the sources as saying that at least one of the suspects had pledged allegiance to ISIS-K, a resurgent wing of IS, on Telegram in June, though the plot was IS-inspired rather than directed by the group’s operatives.

Austrian Interior Minister Gerhard Karner said foreign intelligence agencies had helped with the investigation, as Austrian law does not allow monitoring of messenger apps.

Event organizer Live Nation urged fans of Coldplay, which is due to play at the same stadium on Aug. 21, to stay calm and said it was in contact with authorities.

It did not comment on whether the show would take place.

British police said on Thursday there was nothing to indicate that the planned attack in Vienna would have an impact on Swift’s shows at Wembley Stadium in London next week.

“Concerts are often a preferred target of Islamist attackers, large concerts,” said Karner, listing the 2015 attack on the Bataclan venue in Paris and the 2017 bombing at England’s Manchester Arena where US pop star Ariana Grande had played.

The plot in Austria also brought to mind a foiled plan by three IS-linked suspects to attack Vienna’s gay pride parade last year.

Islamic State was largely crushed by a US-led coalition several years ago after establishing a “caliphate” in large areas of Iraq and Syria, but has still managed some major attacks while seeking to rebuild and reinvent itself.

Last week’s shows were to be part of the record-breaking Eras Tour by American singer-songwriter Ms. Swift which started on March 17, 2023, in Glendale, Arizona, and is set to conclude on Dec. 8, 2024, in Vancouver, Canada.

Ms. Swift, 34, has not yet commented on the cancellations on her official Instagram account, which has 283 million followers.

Her fans were horrified at the threat, with some begging organizers to postpone the concert instead of canceling it outright. Promoters have said they will pay back tickets. — Reuters

Bosch Car Service Philippines breaks ground on pioneer outlet

PHOTO FROM BOSCH CAR SERVICE PHILIPPINES

Officials of Bosch Car Service Philippines, under ACMobility, recently held groundbreaking ceremonies for the company’s first outlet. Bosch Car Service Bacoor is located along Molino Boulevard, and is set to open in early September. In photo are (from left) Bosch MA Project Manager Yukselen Cenk, BCS-MF General Manager Geronimo Campilan, BCS-MF CFO Vanessa Joy Tan, Bosch MA Product Manager Jose Ligot, and BCS-MF Service and Training Manager Christopher Paul Ofilada. Once completed, the Bosch flagship outlet will showcase state-of-the-art servicing facilities, with seven work bays within a 1,464-sq.m. lot.

Childhood overweight and obesity in the Philippines

JCOMP-FREEPIK

More and more Filipino children are getting fatter, and this puts them at risk for serious health problems. The prevalence of overweight and obesity among Filipino adolescents has more than doubled, from 4.9% in 2003 to 11.6% in 2018, which further increased to 13% in 2021, according to the latest Expanded National Nutrition Survey (ENNS) of the Department of Science and Technology-Food and Nutrition Research Institute (DoST-FNRI).

Addressing the increasing number of overweight and obese Filipino children takes on added significance as the country observes Linggo ng Kabataan on Aug. 12, coinciding with the annual celebration of International Youth Day (IYD). This year’s IYD theme is “Transforming Food Systems: Youth Innovation for Human and Planetary Health.”

Overweight is a condition of excessive fat deposits. Obesity is a chronic complex disease defined by excessive fat deposits that can impair health. Overweight and obesity are diagnosed by measuring people’s weight and height and calculating the body mass index (BMI) with the formula: weight (kg)/height(m). BMI is a surrogate marker of fatness and additional measurements, such as waist circumference, which can help the diagnosis of obesity. The BMI categories for defining obesity vary by age and gender in infants, children, and adolescents.

The World Health Organization (WHO) warns that being overweight in childhood and adolescence is associated with greater risk and earlier onset of various noncommunicable diseases (NCDs), such as type 2 diabetes and cardiovascular disease.

Obesity can lead to increased risk of type 2 diabetes and heart disease, can affect bone health and reproduction, and increases the risk of certain cancers. It also influences the quality of living, such as sleeping or moving. Childhood and adolescent obesity have adverse psychosocial consequences as well; it affects school performance and quality of life, compounded by stigma, discrimination, and bullying. Children with obesity are very likely to become adults with obesity and are also at a higher risk of developing NCDs in adulthood, said the WHO.

A study by Desnacido et al published on August 2022 in the Philippine Journal of Science identified several factors associated with overweight and obesity in the country, particularly among adolescents. These are higher socioeconomic status, residence in urban areas, higher educational status of household head, physical inactivity (a sedentary lifestyle), and food intake exceeding requirement (excessive eating).

The study utilized data collected in the 2018 ENNS, which was a cross-sectional household-based survey. It is believed to be the first local study to investigate the factors associated with overweight and obesity among adolescents using a nationally representative sample.

A study by Abueg et al published in January 2024 in the online journal Sage Open found that parents’ nutritional knowledge on diet, disease, and weight management; permissive parenting style; and dietary behavior on emotional undereating (eating less in response to stress or negative emotions) are significantly associated with adolescent overweight and obesity.

The study involved 200 students of three high schools and two universities in the City of Manila, which was identified in the ENNS as one of the top five cities in the country with the highest prevalence of overweight and obese Filipino adolescents.

At the individual level, Abueg et al recommended the implementation in schools and social media of interventions that promote nutrition guidelines for healthy diets, limit the intake of total fats and sugars, and increase consumption of fruit and vegetables. At the societal level, they echoed the WHO recommendations calling on the food industry to reduce the salt content of processed food; ensure healthy and nutritious choices; restrict the marketing of foods high in sugars, salts, and fats, especially those foods aimed at children and teenagers; and ensure the availability of healthy food choices. They also recommended that children and adolescents engage in moderate to vigorous physical activity for at least 60 minutes daily, as well as create more open or designated spaces for recreational and physical activities.

Abueg et al underscored the importance of parent-based interventions aimed at improving parents’ nutrition knowledge, parenting style with regard to children’s nutrition, and eating behavior. This could positively influence children’s behavior and help prevent childhood and adolescent overweight and obesity.

The Department of Health stressed that interventions that address the social determinants of health, highlighting the need to integrate health in all public policies, to enable behavior change and create supportive environments must be put in place. Healthier food options in communities, schools, and workplaces should be made more available, affordable, and accessible to all Filipinos. Moreover, concrete steps must be taken to make the country’s public infrastructure such as parks, roads, and pathways more conducive to physical activity and active mobility.

The DoST-FNRI recommends that National Government agencies develop standard protocols for physical activity programs and routines, and provide parents and caregivers with the latest health information and other resource materials. National Government agencies should also fund and regularly organize seminars or courses on nutrition and physical activity, increase surveillance, and support and fund research focusing on symptoms, prevention, and cure of genetic factors of obesity such as metabolic syndrome.

The DoST and the biopharmaceutical industry have oftentimes similar research objectives. The biopharmaceutical industry continues to conduct research to find clues about how to treat diseases and ways to zero in on symptoms or underlying causes. Once the industry has an understanding of the disease or condition, the process of developing a new medicine begins.

 

Teodoro B. Padilla is the executive director of Pharmaceutical and Healthcare Association of the Philippines (PHAP).  PHAP represents the biopharmaceutical medicines and vaccines industry in the country. Its members are in the forefront of research and development efforts for COVID-19 and other diseases that affect Filipinos.

France extends bluetongue vaccination for ruminants

REUTERS

PARIS — France detected two new outbreaks of a new variant of bluetongue virus circulating in ruminants in northern Europe, prompting it to speed up and extend a vaccination campaign in the region, the farm ministry said.

France reported a first outbreak of the BTV3 bluetongue disease on a sheep farm near the Belgian border earlier this week. The virus, spread by insects and which can be deadly for sheep, cattle and goats, has been circulating in the Netherlands, northern Belgium and western Germany since late last year.

France increased the number of vaccines that will be given for free to farmers to 6.4 million doses, including 1.1 million for sheep and 5.3 million doses for cattle, from a total of 4.6 million doses previously.

The ministry had initially mentioned Wednesday as the start of the campaign, which has since been brought forward to Monday. — Reuters

How PSEi member stocks performed — August 9, 2024

Here’s a quick glance at how PSEi stocks fared on Friday, August 9, 2024.

Analysts’ Expectations on Policy Rates (August 2024)

THE BANGKO SENTRAL ng Pilipinas (BSP) may cut rates for the first time in nearly four years at its policy-setting meeting this week, according to a majority of analysts polled by BusinessWorld. Read the full story.

Analysts’ Expectations on Policy Rates (August 2024)

Peso may be range-bound before BSP meeting

BW FILE PHOTO

THE PESO may be range-bound against the dollar this week as the market awaits the Philippine central bank’s policy meeting.

The local unit closed at P57.28 per dollar on Friday, strengthening by 3.6 centavos from its P57.316 finish on Thursday, Bankers Association of the Philippines data showed.

This was the peso’s best finish in more than three months or since its P57.221-a-dollar close on May 7.

Week on week, the peso surged by 80 centavos from its P58.08 close on Aug. 2.

The peso continued to strengthen against the dollar on Friday following stronger-than-expected gross domestic product (GDP) growth in the second quarter, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“Rallies continued to attract good selling interest post-GDP release,” Security Bank Corp. Chief Economist Robert Dan J. Roces likewise said in a Viber message.

Philippine GDP expanded by 6.3% in the second quarter, the government reported on Thursday. This was faster than the revised 5.8% growth in the first quarter and the 4.3% clip a year ago.

This was also above the 6% median estimate in a BusinessWorld poll of 19 economists.

In the first semester, economic growth averaged 6%. The government is targeting 6-7% GDP growth this year.

For this week, peso-dollar trading will largely depend on the Bangko Sentral ng Pilipinas’ (BSP) policy review on Aug. 15 (Thursday), Mr. Ricafort said.

Analysts are divided on the Monetary Board’s rate decision this week as faster headline inflation in July caused BSP Governor Eli M. Remolona, Jr. to take a less dovish policy stance.

A BusinessWorld poll conducted last week showed that nine out of 16 analysts surveyed expect the central bank to deliver a 25-basis-point (bp) rate cut at Thursday’s review.

This would bring the target reverse repurchase rate to 6.25% and would be the first reduction in benchmark borrowing costs since November 2020, or during the coronavirus pandemic.

The BSP has kept its policy rate at an over 17-year high of 6.5% since October 2023 following increases worth 450 bps.

The Monetary Board is now “a little bit less likely” to cut rates at this week’s policy meeting following the elevated July inflation print, Mr. Remolona said last week.

Headline inflation picked up to a nine-month high of 4.4% in July from 3.7% in June, the Philippine Statistics Authority reported last week. This was slower than the 4.7% print in the same month a year ago and was within the BSP’s 4%-4.8% forecast for the month.

However, this was the fastest print in nine months or since the 4.9% clip in October 2023. It also marked the first time since November that inflation exceeded the central bank’s 2-4% annual target.

Mr. Ricafort sees the peso moving between P57 and P57.50 per dollar this week. — A.M.C. Sy

Stocks to move sideways before BSP rate decision

BW FILE PHOTO

PHILIPPINE STOCKS may move sideways this week as the market awaits the Bangko Sentral ng Pilipinas’ (BSP) policy meeting on Thursday, with a rate cut seen to boost sentiment. 

On Friday, the bellwether Philippine Stock Exchange index (PSEi) increased by 1.5% or 98.53 points to end at 6,647.80, while the broader all shares index rose by 1.01% or 36.10 points to finish at 3,608.24.

Week on week, the PSEi went up by 0.64% or 42.5 points from its 6,605.30 finish on Aug. 2.

“The local bourse recovered after an early week slump as attention moves to the BSP’s meeting,” online brokerage firm 2TradeAsia.com said in a market note.

“The local market bounced back last week after hitting its 6,400 support level, eventually ending the week with a 0.64% gain… However, trading has remained anemic, as seen in the thin value turnovers,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.

For this week, the Philippine central bank’s rate-setting meeting on Aug. 15 (Thursday) will take the spotlight, Mr. Tantiangco said.

“A policy rate cut is expected to sustain the local market’s upward momentum, while an unchanged policy rate might lead to a market decline,” he added.

Analysts are divided on the Monetary Board’s rate decision this week as faster headline inflation in July caused BSP Governor Eli M. Remolona, Jr. to take a less dovish policy stance.

A BusinessWorld poll showed that nine out of 16 analysts surveyed expect the Monetary Board to deliver a 25-basis-point (bp) rate cut at Thursday’s review.

This would bring the target reverse repurchase rate to 6.25% and would be the first reduction in benchmark borrowing costs since November 2020, or during the coronavirus pandemic.

The BSP has kept its policy rate at an over 17-year high of 6.5% since October 2023 following cumulative hikes worth 450 bps.

Headline inflation accelerated to a nine-month high of 4.4% in July from 3.7% in June, the Philippine Statistics Authority reported last week. This was slower than the 4.7% print in the same month a year ago and was within the BSP’s 4%-4.8% forecast.

However, this was the fastest in nine months or since the 4.9% clip in October 2023 and also marked the first time since November that inflation exceeded the BSP’s 2-4% annual target.

The Monetary Board is now “a little bit less likely” to cut rates at this week’s policy meeting following the worse-than-expected July inflation print, Mr. Remolona said after the data release.

“Investors are also expected to monitor the developments at Wall Street. A further easing of recession concerns is seen to help in lifting market sentiment while a worsening of the said concerns is expected to weigh on the market,” Mr. Tantiangco added.

He put the PSEi’s support at 6,400 and resistance at 6,700.

Meanwhile, 2TradeAsia.com placed the market’s immediate support at 6,400-6,500 and resistance at 6,800. — R.M.D. Ochave

Sugar imports intended to offset cane crop losses caused by El Niño

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THE government’s decision to import sugar during the milling offseason is intended to keep supply stable after El Niño damaged the sugarcane crop, sugar producers said.

United Sugar Producers Federation of the Philippines President Manuel R. Lamata said dry conditions during El Niño inflicted significant damage to the cane.

The Sugar Regulatory Administration (SRA) said the most affected producing areas were Batangas, Southern Negros, and Mindanao.

During the second quarter sugar cane production dropped 42.3% year on year to 1.63 million metric tons (MMT), according to the Philippine Statistics Authority, making sugar the most affected single crop during the period.

Last week, the SRA approved imports of 240,000 metric tons (MT) of refined sugar via Sugar Order (SO) No. 5.

“Despite the relatively stable supply and prices of sugar as of end of June, the finite supply of sugar and the effect of El Niño on sugar farming necessitates pre-emptive and decisive action on the part of the government in order to ensure a reasonable and stable supply and price,” the regulator said.

As of July 21, the refined sugar inventory was 396,339 MT, down 18% from a year earlier, according to the SRA.

The volume of the proposed imports “seems right to tide us over coming harvest season this Sept. 15,” Mr. Lamata said via Viber.

SO 5 is open to importers who participated in SOs 2 and 3 who are Licensed SRA International Sugar Traders in good standing.

Mr. Lamata has said that the sugarcane harvest during the upcoming crop year will likely be delayed due to El Niño.

The government weather service, known as PAGASA (Philippine Atmospheric, Geophysical and Astronomical Services Administration), declared the start of El Niño weather event in June 2023, bringing below-normal rainfall conditions, dry spells and droughts.

El Niño ended in early June 2024, according to PAGASA, but dry conditions are expected to continue. 

The US Department of Agriculture projected that Philippine raw sugar production will be flat this year at 1.85 million MT due to the effects of El Niño. — Adrian H. Halili

PHL seen as potential logistics growth market

BW FILE PHOTO

By Justine Irish D. Tabile, Reporter

THE PHILIPPINES is deemed a potential growth market for logistics companies looking to expand in response to growth in international trade, US supply chain services company C.H. Robinson said.

C.H. Robinson Vice-President for Southeast Asia Stephen Ly told BusinessWorld that the Philippines remains a vibrant growth market for companies in the industry.

“The increased demand for freight and logistics services continues to escalate due to higher levels of international trade and exports, with the Philippine logistics industry expected to reach a market size of P1.16 trillion by 2027,” Mr. Ly said via e-mail.

“This presents a valuable opportunity for logistics companies, such as C.H. Robinson, looking to expand its operations,” he added.

C.H. Robinson recently opened a Philippine office focused on serving the Southeast Asian trade.

“C.H. Robinson has also selected the Philippines for its strategic location in Southeast Asia, which allows it to serve a wider customer base and enhance its global supply chain connectivity,” Mr. Ly said.

“With seamless connections with key trading partners like the US, Singapore, South Korea, and China, the Philippines is an ideal hub for regional and international trade,” he added.

Aside from increased trade, Mr. Ly noted that traditional trade routes are now being diverted to focus on Southeast Asia, putting the Philippines in prime position to capture growth.

“With recent geopolitical tensions across the world as well as spillover effects from the COVID-19 pandemic, companies are increasingly diversifying their production bases to Southeast Asian countries,” he said.

“This diversification strengthens the region’s role in global supply chains but also enhances its attractiveness as a manufacturing hub. As a result, these countries, including the Philippines, are experiencing a surge in foreign direct investment,” he added.

However, Mr. Ly said that the logistics industry still faces challenges such as infrastructure limitations, regulatory hurdles, and fluctuating shipping costs.

“These challenges can impact the efficiency and cost-effectiveness of logistics operations, thereby affecting the overall economy,” he said.

He described Philippine ports as inadequate, the road network congested, and inter-island connectivity limited, leading to delays and increased costs.

“These limitations not only hinder the efficient movement of goods within the country but also impact its competitiveness in the global market,” he added.

On the topic of regulatory hurdles and bureaucratic processes, he said complex customs procedures, the absence of harmonized local regulations, and tedious documentation requirements can delay cargo clearance and increase operating costs. 

“These inefficiencies can deter potential investors and limit the growth of the logistics sector, ultimately affecting the country’s economic development and its ability to fully participate in regional and global supply chains,” he said.

He also noted volatile shipping costs, the result of global disruptions, as among the hurdles for logistics companies.

“With the suspension of shipping routes through the Red Sea, for instance, shipping fees are 15% more expensive for the Philippines, inflating the overall cost of goods and services in the country,” he said.

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