Bottlenecks in Manila risk becoming a drag on the Philippine economy because about two-thirds of the nation’s international trade flows through the South China Sea port. Photographer: Brent Lewin/Bloomberg
Cargo containers filled with goods from toys to electronics are piling up on Manila’s docks as a rush-hour truck ban threatens to dent growth in the Philippines, Southeast Asia’s fastest-expanding economy.
Incoming cargo boxes have lingered at International Container Terminal Services Inc. (ICT)’s 100-hectare port facility an average of 10 days -- up from the usual six -- since Mayor Joseph Estrada declared the ban in February, Christian Gonzalez, the company’s regional head, said in an interview. The port, which can’t be accessed without going through Manila’s roads, handles more than half of the nation’s overseas freight.
While the ban was intended to ease chronic gridlock in the heart of a region of almost 23 million people, the shipping backlogs have become so severe they are being called a drag on the country’s growth. The former American colony saw its debt rating raised to investment grade last year after decades of corruption, political upheaval and lackluster growth that led to it once being dubbed the “sick man of Asia.”
“You’re effectively closing the tap on growth,” Gonzalez said of the truck ban. “People need to start realizing this is a long-term issue for the economy.”
Annual Loss
Citigroup Inc. estimated in a note dated March 7 that delays could lead to an annual loss of 61 billion pesos ($1.4 billion) to 320 billion pesos, or as much as 2.9 percent of gross domestic product in Southeast Asia’s second-most populous nation. That would dwarf a potential annual gain of roughly 30 billion pesos from having less-congested roads in the capital, said Jun Trinidad, a Citigroup economist based in Manila.
Estrada enacted the truck ban on Feb. 24 in an attempt to ease traffic in a place notorious for daily commutes of five hours or more. Eight-wheeled trucks and vehicles weighing more than 4,500 kilograms (10,000 pounds) are prohibited from Manila roads from 5 a.m. to 10 a.m. and 3 p.m. to 9 p.m., Monday to Saturday.
“Some quarters are still pushing for a few more revisions to the truck ban,” said Abigail Valte, spokeswoman for President Benigno Aquino. “We leave it to the local government to act on these requests.”
Estrada and Vice Mayor Isko Moreno didn’t answer phone calls or reply to mobile-phone messages.
The city with a population of 1.7 million is part of the urban sprawl that is Greater Manila. The region, which includes the 17 cities and municipalities of Metro Manila, is projected to have a population of more than 30 million by 2025, according to data compiled by Bloomberg.
Urban Decay
The former president, who was forced from office in an anti-corruption uprising 13 years ago, has made fighting urban decay a priority since returning to politics and winning election as mayor last May. The city estimated in February that the ban would affect more than 4,000 trucks.
“The days when buses and trucks were king of the road are over,” Estrada, 77, said in a speech after the regulation took effect. “Billions of pesos are lost due to the daily gridlock.”
He has scaled back the ban since his initial announcement, which could have barred trucks from city roads from 5 a.m. to 9 p.m., or 16 hours a day. Trucks carrying fuel and perishables such as food are excluded from the rules.
The traffic-control measure faces opposition from truckers and business owners.
Growth Potential
“Despite the fact facilities are being developed to handle substantially more cargo, this truck ban is effectively reducing the country’s growth potential and is damaging the economy,” the European Chamber of Commerce of the Philippines said in a statement posted on its website May 6.
Alberto Suansing, director of the 2,000-member Confederation of Truckers Association of the Philippines, said the changes did little to alleviate delays because haulers are restricted to certain routes and prohibited from returning empty containers during daytime hours.
Daily truck trips to the port of Manila have fallen to as low as 3,500 from about 6,000 before Estrada’s order, Suansing said. One round trip -- from the garage to the port to the importer and back -- can take two days or more, he said.
Importers and exporters are bracing for higher charges from shippers, port operators and truckers.
“That’s a triple whammy for the consumer,” Suansing said.
Read More: http://www.businessweek.com/news/2014-05-11/cargo-containers-jam-manila-docks-amid-truck-ban-southeast-asia
Incoming cargo boxes have lingered at International Container Terminal Services Inc. (ICT)’s 100-hectare port facility an average of 10 days -- up from the usual six -- since Mayor Joseph Estrada declared the ban in February, Christian Gonzalez, the company’s regional head, said in an interview. The port, which can’t be accessed without going through Manila’s roads, handles more than half of the nation’s overseas freight.
While the ban was intended to ease chronic gridlock in the heart of a region of almost 23 million people, the shipping backlogs have become so severe they are being called a drag on the country’s growth. The former American colony saw its debt rating raised to investment grade last year after decades of corruption, political upheaval and lackluster growth that led to it once being dubbed the “sick man of Asia.”
“You’re effectively closing the tap on growth,” Gonzalez said of the truck ban. “People need to start realizing this is a long-term issue for the economy.”
Annual Loss
Citigroup Inc. estimated in a note dated March 7 that delays could lead to an annual loss of 61 billion pesos ($1.4 billion) to 320 billion pesos, or as much as 2.9 percent of gross domestic product in Southeast Asia’s second-most populous nation. That would dwarf a potential annual gain of roughly 30 billion pesos from having less-congested roads in the capital, said Jun Trinidad, a Citigroup economist based in Manila.
Estrada enacted the truck ban on Feb. 24 in an attempt to ease traffic in a place notorious for daily commutes of five hours or more. Eight-wheeled trucks and vehicles weighing more than 4,500 kilograms (10,000 pounds) are prohibited from Manila roads from 5 a.m. to 10 a.m. and 3 p.m. to 9 p.m., Monday to Saturday.
“Some quarters are still pushing for a few more revisions to the truck ban,” said Abigail Valte, spokeswoman for President Benigno Aquino. “We leave it to the local government to act on these requests.”
Estrada and Vice Mayor Isko Moreno didn’t answer phone calls or reply to mobile-phone messages.
The city with a population of 1.7 million is part of the urban sprawl that is Greater Manila. The region, which includes the 17 cities and municipalities of Metro Manila, is projected to have a population of more than 30 million by 2025, according to data compiled by Bloomberg.
Urban Decay
The former president, who was forced from office in an anti-corruption uprising 13 years ago, has made fighting urban decay a priority since returning to politics and winning election as mayor last May. The city estimated in February that the ban would affect more than 4,000 trucks.
“The days when buses and trucks were king of the road are over,” Estrada, 77, said in a speech after the regulation took effect. “Billions of pesos are lost due to the daily gridlock.”
He has scaled back the ban since his initial announcement, which could have barred trucks from city roads from 5 a.m. to 9 p.m., or 16 hours a day. Trucks carrying fuel and perishables such as food are excluded from the rules.
The traffic-control measure faces opposition from truckers and business owners.
Growth Potential
“Despite the fact facilities are being developed to handle substantially more cargo, this truck ban is effectively reducing the country’s growth potential and is damaging the economy,” the European Chamber of Commerce of the Philippines said in a statement posted on its website May 6.
Alberto Suansing, director of the 2,000-member Confederation of Truckers Association of the Philippines, said the changes did little to alleviate delays because haulers are restricted to certain routes and prohibited from returning empty containers during daytime hours.
Daily truck trips to the port of Manila have fallen to as low as 3,500 from about 6,000 before Estrada’s order, Suansing said. One round trip -- from the garage to the port to the importer and back -- can take two days or more, he said.
Importers and exporters are bracing for higher charges from shippers, port operators and truckers.
“That’s a triple whammy for the consumer,” Suansing said.
Read More: http://www.businessweek.com/news/2014-05-11/cargo-containers-jam-manila-docks-amid-truck-ban-southeast-asia
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