A bustling and thriving sector

By Bjorn Biel M. Beltran, Special Features Writer

As a country of over 7,000 islands surrounded on all sides by waters, it’s no wonder that the Philippines is a country with bustling ports and a thriving shipping industry. According to its 2017 accomplishment report, the Philippine Ports Authority (PPA) recorded a revenue performance of P15.36 billion, growing by 7.24% from the previous year.

“Driven by the robust shipping and trade on account of the strong domestic consumption and accelerated public sector investment, revenue performance continued to sustain high rate of growth,” the report said.

The PPA made a profit of P267.18 million in 2017, posting a healthy expansion rate of 5.69% from the previous year. Cargo volume handled that same year by Philippine ports rose by 4.23% to 254.069 million metric tons (mmt) due to growth in both domestic and foreign cargo volumes.

In particular, domestic cargo improved by 8.66% (8.169 mmt), with notable cargo performance registered at PMOs NCR North, Panay/Guimaras, Davao, Negros Occidental/Bacolod/Banago/BREDCO, Misamis Oriental/Cagayan de Oro, and NCR South. Meanwhile, growth in foreign trade volume grew by 1.43% (2.143 MMTs), bolstered by an upturn in imports (4.70%, 3.998 MMTs) that negated a recorded shortfall in export goods (2.88%, 1.855 MMTs).

Volume of containerized cargoes handled at the ports as of the review period surpassed last year’s by 8.28% (539,989 20-foot equivalent units or TEUs). Domestic container traffic rose by 6.10% (160,847 TEUs), while foreign container volume expanded by 7.38% (286,424 TEUs).

At the same time, more people are traveling by sea, with passenger traffic at ports expanding by 4.57% (3,151,465) during the year. This growth was driven primarily by the strong reliance by sea-traveling public on Ro-Ro vessels, fast crafts and motorized bancas as primary mode of transportation for domestic inter-island travel.

The impact of such heavy movement is rarely publicized but immensely important, as it translates to a bulk of the country’s trade and industry. As the Philippines continues on its slow and obstacle-ridden path as a developing economy, such hectic port activity can only get heavier.

Mark Matthew F. Parco, chief operating officer for shipping at 2GO, the country’s largest ferry company, said that shipping could be seen as more of the “backbone” of the Philippines’ burgeoning economy due to its significance both for trade and transportation.

“Shipping is still the most cost-effective way of moving things from one place to another,” he told BusinessWorld in an interview. “You cannot fly everything. Even if it’s cost-effective to fly everything, you cannot carry everything [in the air]. One plane can probably carry about one or two containers worth of cargo. On a ship, there could be around 300 containers worth. So shipping is still the most effective way.”

Mr. Parco noted that the same notion of cost-effectiveness applies to regular travelers, such as those Filipinos who have homes and families in the provinces in Visayas and Mindanao but reside in Metro Manila for work.

He also pointed out that as a significant portion of the country’s economic activity is in Metro Manila, the ports see a daily haul of products like agricultural goods, like sugar and corn, and raw materials arriving to be processed in Manila and departing to be redistributed back to the provinces.

“People rely on shipping, but the Philippines is an archipelago so it’s only natural that shipping is important,” he said.

Ports are the country’s gateways to progress, and their continuous development and improvement is tantamount to the security of the country’s future. As part of the PPA’s efforts to modernize the country’s ports, the agency last year aimed for the construction of Wharf for Rail-Mounted Gantry Crane at the Ports of Iloilo, Makar (General Santos), Cagayan de Oro, and Zamboanga. PPA further committed to completing civil works for two ports.

According to the PPA, civil works for two ports, Makar (General Santos) and Zamboanga, have already been completed as of end of 2017. The two other ports — Iloilo Commercial Port Complex (ICPC) in Lapaz, Iloilo City and Cagayan de Oro — are nearing completion. Meanwhile, the construction of Ro-Ro ramps at selected ports aimed at improving trade movement and providing seamless inter-island connectivity has mostly been completed.

Additionally, the PPA programmed the development of “a database of port facilities developed and repaired consisting of inventory of port facilities nationwide which shall serve as basis in the preparation of master plan for port development, repairs, and maintenance”. The system’s implementation is expected to be rolled out this 2018.

With millions of tons of cargo being shipped in and out of the Philippines, and with millions of people depending on ships to travel from one place to another every year, the importance of the country’s ports and its shipping industry cannot be understated. As the country sustains its remarkable growth, it is all but inevitable that new challenges will arise to pose a risk to that growth. In challenging moments, the Philippine economy will only be as strong as its infrastructure.